Many Medicare ACOs would quit rather than face risk next year

Most accountable care organizations say they will disband if the CMS forces them to take on financial risk next year.

ACOs that started in the Medicare Shared Savings Program (MSSP) Track 1 in either 2012 and 2013 are supposed to move to a risk-based model by their third contract periods which begin next year, according to Obama-era regulations.

The National Association of ACOs surveyed 82 ACOs that began in those years and 71% of them said they are likely to leave the MSSP if they must assume risk, according to a report released Wednesday.

"These results paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk," Clif Gaus, president and CEO of the NAACOS, said in a statement.

In February, the NAACOS asked the CMS to allow these ACOs to continue an additional three years without facing financial risk saying the models required more time to mature and generate the continuity and cost-savings that were intended of the program. Policy insiders oppose the CMS granting the request. They say the ACO program would continue to produce only meager savings. ACOs say they need more time without risk because MSSP regulation has changed considerably since the early years and ACOs are just now operating successfully.

The majority or 76% respondents said they would likely continue on as an ACO if the CMS agreed to the change.

"The challenges to assuming risk are not surprising and highlight that the CMS needs to face the reality about how the majority of ACOs view risk," Claus said. "ACOs need to gain confidence through successful performance in a one-sided model in order to be prepared to assume risk."

The CMS appeared to deny the request in an April 24 letter.

"Our results to date show that ACOs in performance-based risk tracks perform better than shared savings only ACOs," CMS Administrator said in the letter.

Instead, the agency suggested ACOs consider the recently established the Medicare ACO Track 1+, which began on January 1.

Under that initiative, ACOs face limited downside risk than is currently available in Tracks 2 or 3 of the MSSP.

Last year, HHS' Office of Inspector General said MSSP ACOs reduced Medicare spending by about $1 billion in three years. Every year, Medicare spends more than $500 billion.

There are 561 Medicare ACOs in the program this year and 82% of them remain in Track 1.