Spotlight on ACOs

The National Association of Accountable Care Organizations is urging CMS to extend the Next Generation ACO demo for at least a year -- especially given issues stakeholders have run into with the Direct Contracting model that CMS said could act as the next step for Next Generation ACOs -- and to protect those in the demo from negative side effects of COVID-19.

CMS will mitigate losses by accountable care organizations from January until the end of the COVID-19 public health emergency, the agency says in broad interim final rule released Thursday (April 30), and the agency also says it will exclude beneficiaries’ COVID-19 inpatient care episodes from ACO spending, give ACOs the option not to take on increased risk in 2021, allow ACOs with expiring contracts to extend them through 2021 and use telehealth claims to help assign beneficiaries to the correct ACOs.

Sens. Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA) are pressing CMS to go further with relief for accountable care organizations as a result of the COVID-19 pandemic and waive the providers’ losses they might otherwise have to repay -- a step that the National Association of ACOs has urged both Congress and CMS to consider.

The National Association of Accountable Care Organizations estimates the COVID-19 pandemic could cost Medicare up to $115.4 billion over the next year, and derail Medicare ACOs.

Stakeholders are urging CMS and lawmakers to make sure the COVID-19 pandemic doesn’t derail providers in value-based pay arrangements, including in accountable care organizations, with some warning of potential mass exits from such arrangements due spending spikes driven by coronavirus care and treatment.

CMS says the revamped Medicare Shared Savings Program Accountable Care Organizations are on track to save $2.9 billion over 10 years, as the agency’s actuary projected when the regulatory overhaul was finalized, but the National Association of ACOs raises concerns about the program’s lack of growth because it says fewer new ACOs are joining the program than in past years.

CMS on Monday (Jan. 6) touted that about 98% of providers in the Merit-based Incentive Payment System received a bonus or avoided a pay cut for the program’s second performance year, 2018, but some stakeholders say that a budget-neutral system where everyone does well doesn’t provide the necessary incentives to move providers to value-based pay and the program is becoming more of a compliance exercise than motivation for providers to move away from fee-for-service.

Accountable Care Organizations view CMS’ new Direct Contracting demonstration as laying the groundwork for the next generation of ACOs -- particularly with the Next Generation ACO demo set to sunset soon -- and PACE organizations view the Direct Contracting demo as a way to reach new patients who could benefit from the Program of All-Inclusive Care for the Elderly care model.

CMS opened applications for two of its new Medicare alternative payment models on Thursday (Oct. 24) as the Health Care Payment Learning and Action Network (LAN) officially laid out its goals to move all Medicare beneficiaries to value-based pay models by 2025.