National Association of ACOs, Press Release, May 2, 2018

Today, the National Association of ACOs (NAACOS) released results from a survey about assuming risk and future participation plans for Medicare Shared Savings Program (MSSP) Track 1 ACOs. The web-based survey was conducted in April 2018 and survey links were emailed to Track 1 ACOs entering their third agreement periods in 2019. NAACOS specifically reached out to the 82 ACOs that began the MSSP in 2012 or 2013 and remain in Track 1 in 2018, thus they are required to move to a two-sided ACO model in their third agreement period beginning in 2019. The goal of the survey was to better understand what ACOs are planning in the face of these requirements and how they feel about risk. While we are pleased that 43 percent of these Track 1 ACOs responded to the survey, we are troubled by the results which illustrate NAACOS’s long-standing concerns about forcing ACOs into risk-based contracts.

Results from a key survey question show that 71 percent of ACO respondents indicated they are likely to leave the MSSP as a result of having to assume risk.

NAACOS encourages ACOs to prepare to move to risk and strongly supports ACOs that are ready to do so, but we do not support forcing ACOs to assume risk if they are not ready. Clif Gaus, President and CEO of NAACOS, comments on the survey results, “These results paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk. It’s naïve to think ACOs that aren’t ready will be forced into risk in what is ultimately a voluntary program. The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value. This would be a real setback for Medicare payment reform efforts.”

https://www.naacos.com…

Accountable care organizations (ACOs) are the mainstay of CMS’s strategy to move health care financing away from paying for volume to paying for value instead. ACOs enter the Medicare Shared Savings Program (MSSP) through Track 1 in which they have the upside of being rewarded with a portion of any savings they can generate. But ACOs are required to move into a two-sided model in which they must also bear the downside risk of losses. In this survey, 71 percent of the ACO respondents indicated that they are likely to leave the MSSP if they are required to assume that downside risk.

Although the concept is that ACOs must demonstrate accountability for improving quality and reducing costs, the actual application of the concept demonstrates that it is really primarily about the latter – reducing costs. That is why CMS requires transition to the two-sided model with downside risk. They want to reduce federal spending. Yet the ACOs recognize that the model is so flawed because of their potential exposure to losses that they would rather abandon the program than to risk those losses.

This really should make the policy community and bureaucrats think about whether the ACO experiment should even be continued. If policy changes are made to give greater assurance to the ACOs that they will be profitable, then the whole idea of cost accountability tanks.

In fact, the concept that you can assign value to care while ignoring volume is fundamentally flawed. The delivery of health care requires a certain volume of services that have overhead costs. Paying based on a paucity of quality measurements and on patient satisfaction surveys ignores the cost of the resources that are required to deliver care.

It would be far better to design a system that improves allocation of those resources. Of course, that is what a well designed single payer national health program does. Let’s quit wasting our efforts and funds on the failed ACO model and move on with providing what we really need – an improved Medicare for all. That’s where the real value is.

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