(Story updated at 6:30 p.m. ET)
The CMS plans to enlist states in a new experiment allowing Medicare accountable care organizations to also manage Medicaid costs for patients who are enrolled in both programs.
The new model builds on the Medicare Shared Savings Program, in which Medicare ACOs that hit spending and quality targets are able to share in savings with the CMS. But those ACOs often don't consider Medicaid savings, even when beneficiaries are enrolled in both Medicare and Medicaid programs. Such “dual eligible” patients often are higher risk and have higher health costs.
The CMS intends to enter agreements with as many as six states, with preference given to states with low saturation of providers already participating in a Medicare ACO program. Participating states will be able to design certain parts of how they implement the model.
As of April, there were 433 ACOs in the program covering 7.7 million patients. Only a few of the participating ACOs are in tracks that carry the risk of losing money if they fail to control costs.
Next year, the program's cost benchmarks will take into account regional spending factors. The change was a response to complaints that highly efficient providers were at a disadvantage because their performance was measured against their own past results.
On Thursday the CMS also announced more opportunities for clinicians to join advanced alternative payment models to earn incentives under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA.
In January and February, the CMS will begin accepting applications for new practices and payers in the Comprehensive Primary Care Plus model and new participants in the Next Generation ACO model for 2018.
The agency expects that by 2018, a quarter of clinicians subject to MACRA's quality incentive program will participate in these advanced payment models, which require participants to take on substantial downside financial risk.
Physicians who choose to participate in advanced alternative payment models will earn annual bonuses of 5% beginning in 2019 and are exempt from the reporting and performance requirements under the law's Merit-based Incentive Payment System.
Earlier this year, the CMS said it was considering adding another advanced alternative payment model in 2018, called ACO Track 1+. It would incorporate less downside risk than what's currently required in the program, thus allowing more physicians to participate and earn bonuses under MACRA.
A group of 10 healthcare organizations, including the American Hospital Association, American Medical Association and group purchasing organization Premier, sent a letter Thursday urging the CMS to develop the ACO Track 1+ as an advanced alternative payment model and quickly finalize it so ACOs can begin participating as soon as 2018.
The organizations also recommended that the CMS allow ACOs of all sizes and structures to participate in Track 1+ and allow ACOs to remain in the model for an unlimited amount of time, noting that many ACOs will likely never be able to take on the high levels of risk required in the other models.
“With growing calls for ACOs to take on risk, it's important to recognize that 90% of Medicare ACOs remain in Track 1 due to the very high levels of risk in the current two-sided models… which require significantly more risk than what the vast majority of ACOs can bear,” said Clif Gaus, president and CEO of the National Association of ACOs and one of the cosigners of the letter. “Track 1+ would provide a much-needed choice for ACOs and create a glide path to assuming risk.”