Value-Based Care News

Orgs Push for MSSP Track 1 Extension for Non-Risk-Bearing ACOs

Forcing MSSP Track 1 accountable care organizations (ACOs) to assume downside financial risk after two agreement periods will jeopardize the program, industry groups argued.

Medicare Shared Savings Program (MSSP) Track 1 and accountable care organizations (ACOs)

Source: Thinkstock

By Jacqueline LaPointe

- Six healthcare industry groups are urging CMS to extend participation in the Medicare Shared Savings Program (MSSP) Track 1 beyond two agreement periods to allow accountable care organizations (ACOs) more time to assume downside financial risk.

“Many ACOs remain in Track 1 because they are unprepared to assume risk requiring them to potentially pay millions of dollars to Medicare, which is simply not practical or feasible for most of these organizations,” the National Association of ACOs, American Medical Association (AMA), Premier Healthcare Alliance, and three other associations wrote to CMS Administrator Seema Verma.

Currently, about 82 percent of MSSP ACOs are in a non-risk-bearing track, according to recent CMS data. The federal agency requires that Track 1 ACOs assume downside financial risk in other MSSP tracks after two agreement periods.

Track 1 ACOs that started in 2012 or 2013 are slated to end their second agreement period in 2019. Starting next year, the organizations must transition to a risk-bearing track.

However, some of these non-risk-bearing organizations are unprepared to assume downside financial risk, the letter stated. The organizations would have to base their decision to assume downside financial risk on limited data from 2012 or 2013 to 2016.

READ MORE: Exploring Two-Sided Financial Risk in Alternative Payment Models

“These ACOs need more time to prepare for two-sided risk,” the industry groups wrote. “While six years may sound sufficient, given the programmatic changes and considerable learning curve for these ACOs, this is not enough time. Further, when they have to make their decision about 2019 participation these ACOs will only have performance data available for four performance years, 2012/2013 through 2016.”

The organizations must also consider local market dynamics, culture, leadership, financial position, and resources available to address social determinants of health, which impact patient outcomes and costs, the associations stated.

Safety-net and rural participants, in particular, may not have the capital or financial backing to enter risk-bearing tracks of the MSSP, which require potential repayments to CMS if the ACO incurs shared losses.

Therefore, the groups urged CMS to allow MSSP ACOs that meet at least one of the following criteria to continue as Track 1 organizations for a third agreement period:

• Realized net savings across four performance years relative to their benchmark even if the organizations did not earn shared savings payments

READ MORE: The Future of Accountable Care Organizations Involves Risk

• Scored at least the 50th percentile in quality for two of the three pay-for-performance years

• Improved overall quality score by at least 10 percentage points across the pay-for-performance years

The federal agency should also consider allowing cost-efficient Track 1 ACOs to qualify for an additional non-risk-bearing agreement period. ACOs with spending lower than that of their region already face lower starting benchmarks than their peers. Despite already investing in care delivery capabilities to bring down costs, these MSSP ACOs are at a disadvantage because of lower benchmarks, which make it harder to continuously earn shared savings.

While CMS intends to phase in regional spending in the benchmarking methodology, cost-efficient MSSP ACOs in Track 1 should not be forced to assume downside financial risk until regional spending is incorporated into the program. Therefore, CMS should permit these organizations to extend their Track 1 participation.

The industry groups pointed out that non-risk-bearing ACOs are already taking on a form of financial risk – investments in care delivery improvement. Organizations invest $1.6 million annually, on average, to operate their ACO, including care management, health IT implementation, population health management, and ACO management and administration, the 2016 NAACOS survey showed.

READ MORE: Accountable Care Organizations Grow, But Face New Challenges

“These investments put ACOs at jeopardy of financial losses that have a considerable impact on their organizations, providers and beneficiaries,” the letter stated. “Congress recognized the principle from the ACO authorizing statute that one of the purposes of creating ACOs is to ‘encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery.’ That investment—the cost of switching to a fundamentally different approach to patient care—constitutes in and of itself a substantial financial risk.”

Some Track 1 ACOs have yet to see a return on investment with their care delivery transformations. But this could take time as evident from MSSP performance year results.

MSSP ACOs are more likely to earn shared savings payment over time, according to recent research. A 2017 Health Affairs report showed that the rate of MSSP ACOs realizing shared savings payments was 20 percent of organizations in their first performance year and almost 40 percent of those in their fourth performance year.

Experienced ACOs also generated net savings per beneficiary, with the most mature ACOs realizing net savings of $140 per beneficiary.

Forcing non-risk-bearing MSSP ACOs to enter downside risk contracts would not only jeopardize a participant’s clinical and financial position, but the Medicare program’s sustainability, the letter stated.

“It’s important to recognize that Track 1 ACOs that are not ready for risk will not move forward; they will quit the program altogether,” the associations explained. “Using a government mandate for risk is not the solution to increasing participation and achieving successful results for two-sided ACOs.”

ACOs may also channel their investments into other value-based contracts, shifting care coordination and improved care delivery away from Medicare patients.

“Our recommendations reflect our unified expectation and desire to see the MSSP achieve the long-term sustainability necessary to enhance care coordination for Medicare beneficiaries, lower the growth rate of healthcare spending and improve quality in the Medicare program,” the groups wrote. “Specifically, our key goals for the MSSP include encouraging increased participation, enabling ACOs to continue in the program and creating a successful, long-term ACO model for Medicare.”

“It is in Medicare’s interest for ACOs to continue in order to provide high-quality care for beneficiaries and to reduce the growth rate of Medicare spending,” the letter stated.