White House officials call for ACO rule changes

Accountable care organizations are failing to meet their promise to save Medicare money, and regulations governing the model need to change, according to senior White House officials.

"There are a lot of broken promises and failed estimates in the Affordable Care Act, and the hope and promise of this complicated value design is one of them," Joseph Grogan, associate director of health programs at the White House's Office of Management and Budget, said Wednesday at the National ACO, Bundled Payment and MACRA Summit.

Grogan based his comments on recent findings from Avalere that Medicare Shared Savings Program ACOs cost the agency $384 million from 2013 to 2016, despite a 2010 Congressional Budget Office prediction that the models would save $4.9 billion through 2019.

Policy changes are coming to Medicare Shared Savings Program ACOs via a proposed rule posted on OMB's website. The rule will aim to facilitate ACOs' transition to downside risk, according to a HHS summary of the rule.

Clinicians working within ACOs have heard the rule will slash how long they can stay in the Medicare Shared Savings Program without taking on downside risk. Grogan did not provide details about the rule on Wednesday. HHS submitted it for review on May 1 and OMB has up to 90 days to review the regulation.

Under Obama-era regulations, ACOs have the option to stay in Track 1, which only involves upside risk, for up to six years or two contract periods. Sources in the provider community said the agency will cut that period to three years or one contract period.

There are 561 Medicare ACOs this year, 82% of which are in Track 1.

Grogan did not confirm the report in his remarks. However, he said that one of the barriers to ACOs' success is their resistance to face penalties if they miss savings goals.

"ACOs need to accept risk sooner rather than later," Grogan said.

ACOs have pushed back against taking on risk because the CMS doesn't provide enough information ahead of time on the patients they'll be judged on, or goals they must meet to avoid financial penalties.

Grogan agreed that the CMS must be more transparent in its ACO evaluations before they can take on more risk. It's unclear if the proposed rule will offer these assurances.