Seema Verma hints at the end of 'upside-only' ACOs

As the healthcare industry continues the march toward value-based care, CMS has turned a critical eye on one-sided ACO contracts for driving up costs and making little progress toward value.

"These ACOs are actually increasing Medicare spending, and the presence of these 'upside-only' tracks may be encouraging consolidation in the marketplace, reducing competition and choice for our beneficiaries," CMS Administrator Seema Verma said at the AHA's Annual Membership Meeting May 7.

The majority of ACOs are in upside-only risk contracts, meaning they are not financially accountable if they fail to meet financial and clinical benchmarks. This year, 460 of 561 Medicare Shared Savings Program ACOs — CMS' most popular alternative payment model — remain in Track 1, which is upside-only risk.

The first cohort of ACOs to participate in the program is in its final year of eligibility for one-sided risk. CMS has capped Track 1 participation at two three-year contracts, so 82 ACOs will be required to move to a two-sided risk contract in 2019. However, 71 percent of ACOs in this position said they will leave the program if they are forced to take on risk, according to a survey conducted by the National Association of ACOs. Lawmakers are also pressing Ms. Verma to lift the cap on Track 1 contracts, saying the ACOs are not ready for risk, and if they revert to fee-for-service care, they will lose investments in value-based care infrastructure.

However, MSSP ACOs have increased federal spending by $384 million, blowing by initial projections that the program would generate $1.7 billion in net savings from 2013 to 2016, according to Avalere. The increase in spending has been driven entirely by Track 1 ACOs. Avalere found upside risk-only ACOs increased federal spending by $444 million, while downside-risk ACOs reduced spending by $60 million.

Ms. Verma did not definitively comment on the future of the program, but said, "While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results."

CMS plans to launch new value-based care models this year, she said.  

 

More articles on ACOs:

Cape Fear Valley, UnitedHealthcare launch Medicare Advantage ACO
71% of ACOs would likely leave MSSP if required to assume risk
560-member New York medical group joins Next Generation ACO

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