The CMS offered more flexibility to Medicare accountable care organizations under a final rule published last week.
The revisions are intended to maintain the program's rigor while retaining providers. Hospitals and physicians have been able to choose between two tracks under the Medicare Shared Savings Program for ACOs.
The CMS will finalize a third option in December. The first shared-savings track for ACOs, considered the safest, originally called for providers to receive rewards for hitting cost and quality targets for three years. The program now will allow ACOs to take on more financial risk while sharing in potentially higher savings. The CMS said the upside and downside risk for this model will be 75%—meaning an ACO's bonus or penalty would be 75% of its savings or loss. It also will allow Medicare ACOs to avoid penalties beyond the initial three-year term.
The Affordable Care Act catalyzed the creation of Medicare ACOs, which are networks of hospitals and physicians that aim to improve the quality and lower the cost of care for Medicare beneficiaries in a defined area. More than 400 ACOs participate in Medicare accountable care contracts, and they care for more than 7 million beneficiaries. The CMS, perhaps too optimistically, expects 90% of Shared Savings ACOs will stay with the program because of the rule changes.
“I am concerned there will be a substantial number of ACOs that will choose not to renew,” said Clif Gaus, CEO of the National Association of ACOs.
“Some people may leave, but on the commercial side of the market they are also moving to value-based payment systems,” said Stephen Shortell, a health policy expert at the University of California at Berkeley. “So it's like, where are they going to run to?”
HHS wants to tie an increasing percentage of traditional Medicare payments to alternative payment models like ACOs.