The Centers for Medicare and Medicaid Services has a plan to kickstart provider participation in one of its largest alternative payment models, but providers say they're leery that recent changes to the Medicare Shared Savings Program will prove sufficiently enticing to holdouts.
CMS' goal is that all fee-for-service Medicare enrollees will be under accountable care organizations or other valued-based care arrangements by 2030, and the agency is relying on potential cost savings to shore up the Medicare trust fund, which is projected to run dry by 2031.
Yet provider participation in Medicare Shared Savings Program ACOs has diminished amid COVID-19 and doubts about the financial benefits of joining the system, jeopardizing those aspirations.
To get the initiative back on track, CMS proposed changes to the Shared Savings Program last month that it argues would increase the number of beneficiaries in ACOs by 20% next year. For example, the agency would modify quality reporting and financial benchmarking requirements and phase in a new risk-adjustment model. CMS announced similar updates to the ACO Realizing Equity, Access, and Community Health, or ACO REACH, program on Monday.
“It’s ambitious to get every patient into that type of arrangement,” said Mara McDermott, CEO of Accountable for Health, which represents healthcare providers such as UnitedHealth Group's Optum subsidiary and Amazon subsidiary One Medical. “We’ve been steadily making progress towards this goal, but not as quickly as anyone wants. The real question is: How do you use policy to accelerate that transformation?”
With seven years to go, CMS has not revealed its progress toward the 2030 goal, which includes ACOs and alternative payment systems such as the Oncology Care Model. According to the agency, 13.3 million traditional Medicare beneficiaries are covered under the Shared Savings Program, ACO REACH and Kidney Care Choices models.
Among those three, the Medicare Shared Savings Program is the largest. At the beginning of the year, it had 456 participants, down 5.6% from 2022, according to CMS data.
The 10-year-old program is often described as an entry point for providers looking to take on risk because they have little to lose under its upside-only track, which rewards ACOs for cost savings. The Shared Savings Program is also the only alternative payment model codified in federal law, which makes it relatively more stable than other models.
To boost the patient population of existing Shared Savings Program ACOs, CMS proposed expanding the number of Medicare enrollees that can be counted in provider groups. ACOs would be able to include patients who have seen nurse practitioners, physician assistants or clinical nurse specialists in the year prior to the beginning of a contract, and a primary care physician during the previous two contract years.
When CMS developed the Shared Savings Program, the agency capped ACOs' annual risk score growth at 3% to discourage upcoding. But CMS did not limit how much county benchmark risk scores could rise, causing a mismatch that penalizes ACOs operating in areas with rapid cost growth. CMS now proposes limiting county risk score growth to that 3% limit. The agency additionally seeks to eliminate a negative regional adjustment that penalizes providers that spend more than their county benchmark.
The agency also requested information about developing an additional track for providers interested in assuming more responsibility for managing costs.
These technical updates set the program up for short-term success, said Sean Cavanaugh, chief policy officer at Aledade, a physician enablement company. Aledade, one of the largest Shared Savings Program participants, is involved with more than three dozen ACOs that manage care for 714,000 patients.
But CMS did not address long-term issues that have dissuaded providers from participating in the payment model, said Cavanaugh, a former director of CMS' Center for Medicare.
For example, the agency did not satisfy provider complaints that rebasing benchmarks at the end of each contract period essentially eliminates the savings achieved in previous years, Cavanaugh said.
CMS also did not propose any solutions to the so-called rural glitch, Cavanaugh said. That describes when an ACO with a large market share achieves savings that have an outsized impact on an entire county, which then depresses the benchmark and makes it difficult for dominant providers to accumulate savings in future years, he said. This occurs most often among Shared Savings Program ACOs operating in rural locations because they tend to care for larger shares of the local population than ACOs in more populous regions do.
“They're trying to find a balance,” Cavanaugh said. “The program is supposed to save the government money, so you can't just give it all to the providers. But how do you make this a model that all providers can be in and say, ‘This will work for me 10 to 15 years down the line?’”
And limiting the proposed changes to new ACOs while existing ACOs must wait until the beginning of a new, five-year contract would blunt their impact, Cavanaugh said. "Just pull the Band-Aid off and do it for everybody,” he said. “If it’s a good idea, why phase it in?”
Shifting the bonus threshold risk requirements from the ACO level to the provider level, as CMS proposed, would discourage medical specialists from participating the Shared Savings Program by making bonuses more difficult to earn because they see fewer patients than primary care providers do, McDermott said.
The policy proposal also is unclear on whether participants that don't meet two-sided risk requirements need to report Merit-based Payment Incentive System quality metrics, McDermott said. CMS awards bonuses and lifts MIPS reporting requirements for providers in ACOs that assume two-sided risk for 35% of their patient populations or process 50% of payments through these models.
“If you're a doctor, and you think you're in an enhanced ACO, and then they run the threshold tests at your individual clinician level and they determine that you're not, what happens to you?” McDermott said.
Complicating matters is that, by 2025, CMS will require Shared Savings Program ACOs to electronically report quality metrics from participants' entire patient populations, including those who are commercially insured or enrolled in Medicaid or Medicare Advantage. ACOs currently report quality metrics for a sample group of Medicare enrollees. The proposed changes lack clarity about the reporting format and the patient population that Shared Savings Program ACOs must disclose, said Aisha Pittman, senior vice president of government affairs at the National Association of Accountable Care Organizations.
Providers are concerned the reporting process and the technology standards are onerous, she said. “We have been talking to CMS about this endlessly because it's such a significant burden, and it's so costly that doing this has been a deterrent for folks to come in,” she said. “It just reiterates the need to do the long-term work.”