"If everyone were at risk, it would have been a profitable year (for the CMS)," Muhlestein said. A $39 million loss is quite low for Medicare—just 0.05% of total costs, he added, so the results from the program are more like a "wash" for the agency.
ACOs continue to shy away from downside because it's difficult to prepare for. To participate in Tracks 2 or 3, the ACO must show the CMS it has extra capital on hand to pay losses if it misses performance targets.
Acquiring the extra capital is no easy feat, said Allison Brennan, vice president of policy at the National Association of ACOs. Typically, organizations spend millions of dollars to establish an ACO. The organizations usually have to build data analytics tools, enhance information technology and hire care coordinators and additional staff to oversee the venture.
These investments make it challenging for ACOs to free up any extra capital to take on downside risk, Brennan said. "It takes a long time to be ready," she added.
Indeed, the ACOs with the most experience in the program are the ones that have ventured into Tracks 2 and 3, the CMS data show. Of the six ACOs that participated in Track 2 last year, one was established in 2012 and the other five were established in 2013. Furthermore, of the 16 ACOs that participated in Track 3, 10 were established in 2012 and four were established in 2013.
The most veteran ACOs also generated the most savings. The 73 ACOs that have participated since 2012 — the first year of the program — generated $299 million in savings last year. And the 74 ACOs that began participation in 2013 generated $204 million in savings. By comparison, the 85 ACOs that joined the program in 2015 saved just $50 million and the 100 ACOs that joined in 2016 generated $5 million in savings.