Healthmonix Advisor

CMS Proposes New Changes to ACOs Under MSSP

Posted by Christina Zink on August 17, 2018
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In a new proposal titled “Pathways to Success,” the Centers for Medicare & Medicaid Services (CMS) has laid out a modified set of participation options for ACOs (accountable care organizations) in the Medicare Shared Savings Program (MSSP). The proposed participation options would no longer include an “upside-only” risk model; instead, ACOs would be required to select one of two tracks, both of which ultimately include some downside risk.

The proposal would limit contract agreements for upside-only ACOs to two years, as opposed to the six currently allowed. Additionally, CMS would reduce the savings potential during these two years from 50% to 25%. For ACOs whose contracts expire in December, CMS is granting a one-time only six-month extension to July 2019. ACOs in this position can choose to apply for a new agreement beginning on July 1, 2019. CMS would them resume the usual annual application cycle starting in January 2020.



Eligible ACOs would be able to choose either the BASIC track, which begins under a one-sided model but incrementally increases both risk and potential reward over the course of five levels; or the ENHANCED track, which involves higher levels of risk and reward. ACOs identified as “low revenue” would be allowed to participate in the BASIC track for up to two agreement periods, while “high revenue” ACOs would need to transition to the ENHANCED track after only one agreement period in the BASIC track.


Why the change?

The current three-track model was designed to allow ACOs to gain experience with the program before taking on risk. Participation has remained limited in the downside-risk tracks, however, with 82% of all MSSP ACOs taking on upside risk only. CMS Administrator Seema Verma has criticized the effectiveness of upside-only models, saying in a press call:

“[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended. Thus, the program has not lived up to the accountability part of their name.”

On the other hand, CMS has said that ACOs in two-sided risk models “have shown significant savings to the Medicare program and are improving quality.”


An Exodus of ACOs

A recent National Association of ACOs (NAACOS) survey of Track 1 ACOs entering their third agreement period found that 71% are likely to leave the MSSP if they will be required to assume downside risk. CMS itself estimates that over 100 ACOs will leave the program in the next ten years.

As a result, the NAACOS has come out against the CMS proposal, arguing that the initial successes of the MSSP will be walked back as ACOs abandon their current payment models and return to models that emphasize volume. Verma was asked about this on a press call, and responded that this exodus is not necessarily a bad thing, since two-sided risk ACOs are the ones generating savings. She further commented:

“The other change we’re making is that for six years we’ve been allowing [ACOs] to only take upside risk while also take in 50% of the savings. Now, we’re saying you can only do this for two years and only get 25% of the savings. So, that’s why we’re mitigating the losses that we’re having in the program.”


Topics: CMS, ACO, Policy, APMs