The Centers for Medicare & Medicaid Services’ (CMS) overhaul of the Medicare Shared Savings Program is paying off in the form of greater accountability and more risk-taking, CMS administrator Seema Verma wrote in a blog post published Wednesday in Health Affairs.
The post came as part of an announcement about accountable care organization (ACO) participation data for the July 1, 2019 start date of the Pathways to Success overhaul. This was a redesign of the rules for ACOs, groups of health care providers that take responsibility for total cost and quality of care in exchange for receiving a portion of the savings.
The data includes a full list of ACO participants and SNF affiliates as of July 1.
The overhaul, which was finalized in December of last year, allows most new ACOs just two years to operate without assuming financial risk, while expanding access to waivers for the three-day stay rule for skilled nursing coverage under traditional Medicare.
“When CMS launched Pathways to Success, some industry stakeholders suggested that ACOs may not enroll in the new participation options, since they require ACOs to take on accountability for cost increases more quickly,” Verma wrote. “However, today’s results show that American providers are ready for the value-based transformation and are willing to accept greater accountability in exchange for more flexibility.”
Specifically, CMS approved a total of 206 ACO applications for the July 1 start date, 41 of which are entirely new and 25 of which are re-entering after a period of time where they did not participate as an ACO, she noted. The remainder of ACOs are renewing their agreements.
Of the ACOs starting on July 1, 48% are taking on risk for spending increases above their cost target, meaning they will have to pay CMS either 2% of their revenue or 1% of their cost target, Verma said. In addition, 29% of Shared Savings Program (SSP) ACOs are taking on risk for spending increases, a 10-percentage-point increase in the number of risk-based ACOs in the program, she said.
“Moreover, nearly all of the ACOs taking on risk — 45 percent of all ACOs starting on July 1, 2019 — are taking on risk at a level of at least 8 percent of their revenue or 4 percent of their cost target, which is a sufficient level of risk to qualify as an Advanced Alternative Payment Model (Advanced APM),” she wrote. “This is a much higher percentage than has been the case in past application cycles.”
For some SNFs, working with ACOs has led to shorter lengths of stay, while some ACOs have shifted funds away from SNFs entirely. One operator, speaking anonymously, went so far as to describe them — for SNFs, at least — as “a disaster.”
The results and outcomes of ACOs, meanwhile, have been the subject of occasionally heated debate over the last few years; a study from the consulting firm Avalere Health found that the Medicare SSP increased federal spending by $384 million between 2013 and 2016, while a more recent report from the Medicare Payment Advisory Commission (MedPAC) determined that ACOs led to a 1 to 2 percentage-point drop in Medicare outlays between 2013 and 2016.