Physician-led ACOs leaving Medicare program in greater numbers

Les Masterson

March 18, 2019

Dive Brief:

• Smaller, physician-led accountable care organizations are more likely than hospital-led ACOs to drop out of the Medicare Shared Savings Program, a concern exacerbated by recent rules requiring the groups to take on more risk faster, according to a new Health Affairs blog post.
• The vast majority of ACOs have stayed with MSSP despite concerns about taking on more risk. Only 13% of them dropped out of the program in 2018, which was before the regulations pushing more risk, called Pathways to Success, were implemented.
• CMS dubbed Pathways to Success a "new direction" for the Medicare program that added some new flexibilities for participants, including new beneficiary incentives and telehealth services. Still, the agency may need to make more modifications to MSSP and provide additional support for physician-led and smaller ACOs in the program, the blog post authors said.

Dive Insight:

ACOs are here to stay, with more than 1,000 of them currently covering about 33 million people. CMS has found success with MSSP, which saved $314 million for Medicare after bonuses paid to participating organizations in 2017. ACOs saved $1.1 billion total and CMS shared $780 million in savings with providers. The agency found that 60% of ACOs saved money while 34% earned shared savings.

However, the Health Affairs report showed that CMS may still need to offer additional support to physician-led ACOs, who are leaving MSSP in greater numbers.

CMS views downside risk as a driver for success, but recent research shows that's not necessarily the case.  An Avalere study found that experience — and not risk — is what can drive an ACO's success in MSSP. John Feore, director at Avalere, told Healthcare Dive recently that operational changes, changing physician behavior, infrastructure investments, care redesign and physician buy-in requirements take time. Also, upfront costs and ongoing expenses may temporarily limit financial success. Feore said ACOs with four years of MSSP experience enjoy the best financial performance.

"By the fourth year, ACOs have gone through beneficiary assignment, benchmark projection, financial reconciliation and quality performance review processes more than once and are likely more comfortable operating under the program's requirements," he said. "You can't just flip a switch and expect every ACO to be successful in year one."

There's also another issue with demanding ACOs take on risk sooner. A recent survey that found ACOs will abandon programs if forced to do so. The National Association of ACOs found that nearly three-fourths of surveyed groups said they would leave the MSSP if they are forced to assume risk. The group predicted that pushing for more risk would lead to an "exodus" from the Medicare program.

It's still unknown whether that will happen with MSSP, but the 2018 numbers won't likely get better with CMS demanding providers take on risk sooner. So, the program might wind up with a larger portion of hospital-led ACOs. That isn't ideal as it wouldn't provide a good gauge of whether the payment model can work for physician-led practices.

https://www.healthcaredive.com/news/physician-led-acos-leaving-medicare-program-in-greater-numbers/550671/