Just 53 new accountable care organizations joined the Medicare Shared Savings program for the Jan. 1 start date, which is significantly less new entrants compared to previous years.
There are now 517 ACOs in the Medicare program versus in 2018 when there were 561 ACOs. The drop in new participants follows a recent trend from six months ago when only 66 new ACOs joined. By comparison, in 2018, 124 new ACOs entered the program and in 2017, 99 new ACOs joined.
The National Association of ACOs blames the changes to the Medicare ACO program for the recent drops in participation. In late 2018, the CMS finalized an overhaul of the program that requires ACOs to take on downside financial risk sooner after years where most organizations were risk averse.
"If interest in ACOs dwindles, then doctors and hospitals will fall back into a fragmented, fee-for-service system, and any momentum to transform our health system will be lost," said Clif Gaus, president and CEO of the National Association of ACOs, in a news release.
Although 16% of ACOs left the program in 2019, more than 40% of those participants will be in a different ACO this year, according to CMS Administrator Seema Verma in a Health Affairs blog post. About 11.2 million Medicare beneficiaries are assigned to an ACO, which is higher than last year when 10.4 million were covered.
Additionally, more ACOs joining the program are choosing to take on downside financial risk, Verma said.
Of the 517 ACOs, 63% are in tracks that don't require them to take on financial risk sharing. The remaining 37% of ACOs are in tracks that require them to take on two-sided risk. By comparison, in 2018, 82.6% of ACOs were in Track 1.
The growth of ACOs in risk-sharing tracks this year likely shows that the participants who decided to stay in the program are serious about taking on down-side risk, which is ultimately a good thing for the program, said David Muhlestein, chief research officer at Leavitt Partners. There were likely ACOs in the program that didn't belong there because they had no intention of moving to downside risk. By forcing ACOs to take on risk eventually, the CMS is likely getting a stronger pool of participants ready and willing to do so.
"Just looking at the (lack of growth) doesn't tell the whole story about what's going on with the ACOs," he added.