Spotlight on ACOs

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.

A key house panel is poised to mark up this week legislation that slaps a tax on nicotine concentrates used for vaping, and another that lets consumers use tax-free health savings accounts to pay for direct pay primary care arrangements.

While many industry attorneys praise the administration’s proposed Stark Law and anti-kickback statute reforms, some provider groups are skeptical the changes would help make much difference for those navigating the regulations, particularly for those in rural areas, and suggest Congress needs to step in.

Days after CMS unveiled a tool to help employers who are thinking about funding a health reimbursement account that workers can use to buy individual coverage (ICHRA), a private company launched a similar, interactive affordability calculator and administrative platform that can facilitate the new coverage option finalized in July.