Shared savings 'wipe out': 5 notes on how coronavirus will affect ACO finances

ACOs and healthcare organizations that use global payment models will be particularly burdened by financial challenges related to COVID-19, according to an analysis from the National Association of ACOs.

Five things to know:

1. The financial challenges will grow as more Medicare beneficiaries require COVID-19-related hospitalizations, intensive care treatment and post-acute care.

2. NAACOS estimates COVID-19 could cost Medicare $38.5 billion to $115.4 billion over the next 12 months. The organization said those are gross spending estimates largely based on what other countries experienced and could fluctuate.

3. As about 20 percent of Medicare beneficiaries are in Medicare Shared Savings Program or Next Generation ACOs, potential new COVID-19-related costs for Medicare ACO beneficiaries could range from $7.7 billion to $23.1 billion.

4. That would be a spending increase of 6 to 18 percent compared to 2018, according to NAACOS.

5. "Even under the lower-bound estimate, new spending of this magnitude would wipe out shared savings for the current performance year and create major losses for ACOs in models with downside risk," NAACOS said.

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