ACO industry requests more time to apply for CMS program changes

The accountable care organization industry is asking for a later deadline to apply for CMS’ revamped Medicare Shared Savings Program.

CMS overhauled the ACO program, reframing as "Pathways to Success," late last year by narrowing the number of tracks for ACOs to participate and forcing them to take on full financial risk sooner. The new rules were met with some backlash from the industry, particularly over the push to take on downside risk and a reduction in the amount ACOs can share in potential savings.

The vast majority of the 561 ACOs that participate in the program have been on upside-only risk tracks in the past, with the ability to share in savings without taking on downside financial risk. Downside risk requires ACOs to pay CMS any losses and overspending.

The changes to the ACO program, which is voluntary, could prompt a “mass exodus” of participants, according to one prediction. With the new Pathways set in stone, ACOs have until February 19 to apply to participate––just two months after the final rule was published Dec. 31.

“ACOs barely have time to understand the new rules, and organizing an application is very complicated and for some it is now a high-risk decision,” Clif Gaus, ScD, National Association of ACOS (NAACOS) president and CEO, said in a statement. “There are too many difficult decisions to rush.”

The final rule cuts the shared savings rate to 40 percent, lowering the incentive for ACOs to participate in no-risk models, according to NAACOs. The association also voiced concern that the changes will reduce interest in the program, which saved Medicare $542 million from 2013 to 2015, accounting for shared savings payments, according to one industry report

"Setting an application deadline two months after publishing the final rule does not give ACOs that have expiring agreements the necessary time to vet the decision internally or the time to process the many elements of the application,” Jennifer Moore, NAACOS board member and chief operating officer at MaineHealth ACO in Portland, Maine, said in a statement. “Given the significant changes, ACOs need to engage actuaries to understand how we would fare in downside risk. Such an analysis takes time. Without that time, we would have to enter an upside track out of the gate.”

CMS has argued the program has not resulted in enough savings and that the organizations need to take on downside risk to encourage further innovations and savings. The agency reported ACOs saved Medicare $314 million in 2017. Estimates on savings have been mixed over the past few years, with one report revealing upside-only ACOs cost medicare $384 million from 2013 to 2016. 

HHS Secretary Alex Azar didn’t see the potential loss of ACO participation as much of a factor in finalizing the new rule.

“If this ends up meaning somewhat fewer ACOs, so be it,” Azar said Sept. 7.

The deadline for the new program applies to ACOs with agreements that expired Dec. 31, new ACOs and those that wish to switch from their current agreements to the new Pathways for Success. The deadline also borders another crucial timeline for healthcare organizations––a March 1 application deadline for CMS’ Bundled Payments for Care Improvement (BPCI) Advanced Model.