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July 22, 2019

Fewer ACOs are joining MSSP (but those that do are taking on more risk)

Daily Briefing

    Fewer accountable care organizations (ACOs) joined the Medicare Shared Savings Program (MSSP) in 2019 than in 2018—but more ACOs are taking on financial risk than in previous years, CMS Administrator Seema Verma announced in a Health Affairs blog published Wednesday.

    Just updated: How the Medicare ACO models stack up

    About MSSP

    MSSP encourages ACOs to cut health care costs and improve care coordination by enabling participating ACOs to receive bonus payments if they maintain high-quality care while decreasing Medicare spending compared with their individual benchmarks.

    CMS in December 2018 issued a final rule to reduce to two years the amount of time ACOs can stay in MSSP without assuming risk. The rule replaced MSSP's original three participation tracks with two new tracks under MSSP's Pathways to Success model:

    • The BASIC Track, which moves participants to a two-sided risk model after two years; and
    • The ENHANCED Track, which requires participants to take on downside risk in year one.

    Both tracks have five-year contract terms and require participants to take on downside risk, effectively eliminating CMS' upside-only Track 1 option. CMS is providing two application cycles for the Pathways to Success model in 2019, which is the model's first performance year. The agency offered a special one-time new ACO agreement period that began July 1, allowing existing ACOs with expiring contracts the opportunity the renew their agreements under the new MSSP tracks.

    CMS approved 206 ACO applications for MSSP, Verma says

    Verma in the blog post wrote that CMS in total approved 206 ACO applications under the new Pathways to Success model's July 1 start date. Those newly approved applicants bring the total number of MSSP participants to 518. That total is down by 43 ACOs when compared with 2018.

    Verma wrote that, among the 206 applicants CMS approved to start on July 1:

    • 140 were provider groups that renewed their MSSP agreements—including 18 that chose to renew their agreements early;
    • 41 were new provider groups joining MSSP for the first time in 2019; and
    • 25 were provider groups re-entering MSSP after not participating in the program for a period of time.

    Verma wrote the figures "show that American providers are ready for the value-based transformation and are willing to accept greater accountability in exchange for more flexibility." She added, "The participation rates for July 1, 2019, are in line with what the agency projected when Pathways to Success was launched, putting CMS on track to generate the $2.9 billion in savings over ten years that were projected."

    Fewer new ACOS are participating in MSSP, but more are taking on financial risk

    However, according to data from the National Association of ACOs, fewer new ACOs enrolled in MSSP in 2019 when compared with 2017 and 2018. The data show 124 new provider groups joined MSSP in 2018 and 99 new provider groups joined MSSP in 2017, compared with 66 ACOs that newly joined or re-joined MSSP for the July 1 start date.

    Though new enrollment in the program declined, Verma noted that more ACOs have agreed to take on financial risk than in previous years. In particular, Verma wrote that 48% of ACOs starting July 1, agreed to take on downside risks in 2019—up from 18% in 2018. According to Verma, 45% of those ACOs are assuming a level of financial risk that qualifies them as an Advanced Alternative Payment Model (APM) under MACRA, which means they are eligible for a larger Medicare bonus payment.

    Overall, Verma wrote 29% of all MSSP ACOs as of July 1 are taking on risk for spending increases, which she noted marks a 10 percentage-point increase in the number of risk-based ACOs in the program.

    But an analysis of the data suggest most of those risk-sharing gains are from existing ACOs, not those new to or re-entering the program after time away. Forty-three of the new ACOs are in Level A or B of the basic track, which do not require downside risk. Further, just 20 of the 113 ACOs in tracks with a level of downside risk that qualifies as an Advanced APM are new ACOs.

    Clif Gaus, president and CEO of the National Association of ACOs, said the decline in new ACOs joining the program "will shrink the pool of future, risk-taking ACOs, which CMS should concern itself with." He added, "We hope this smaller class is only a reflection of an off-cycle start date and not an indication that the program and transition to value are slowing down" (Castellucci, Modern Healthcare, 7/17; Haefner, Becker's Hospital CFO Report, 7/18; LaPointe, RevCycleIntelligence, 7/18; Castellucci, Modern Healthcare, 12/21/18; CMS release, 12/21/18).

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