CMS ends ACO track in rural pay transformation model

The Centers for Medicare and Medicaid Services eliminated a program meant to increase the adoption of Accountable Care Organizations in rural areas, the agency announced Tuesday afternoon.

On the agency’s website, CMS cites “broader efforts underway” as its reasoning for removing the ACO Transformation Track, which was part of an alternative payment demonstration for rural health system transformation, known as the Community Health and Rural Transformation Model. The Trump administration’s Center for Medicare and Medicaid Innovation announced the model in 2020.

CMS said in an emailed update on the program that it remains invested in creating opportunities to spur ACO adoption in rural communities. According to the email, the agency is developing a vision and strategy for accountable care, as it will look at lessons from the previous ACO Investment Model to inform future policies. It also expects to announce additional proposals soon.

CMS did not respond by publication to questions about the end of the program.

The next ACO proposals from CMS will likely focus on broader health equity, rather than geography, said David Pittman, senior policy advisor at the National Association of ACOs.

CMS originally slated the ACO Transformation Track to begin January 2022, but regulators delayed applications in March 2021, after the Biden team took over the agency. The agency has moved forward with the model’s separate Community Transformation Track.

The ACO Transformation Track would have given rural ACOs upfront payments of at least $200,000 per beneficiary, along with monthly prospective payments for each beneficiary, for two years if they took part in the Medicare Shared Savings Program and CHART Model. CMS had planned to allow up to 20 rural ACOs to join the track.

ACO adoption has lagged in rural areas, according to Health Affairs. The ACO Investment Model experimented with using pre-paid shared savings to incentivize ACO formation in rural and underserved areas and encourage current participants to take on more financial risk. Researchers estimated the model saved Medicare about $381.5 million over three years, but noted that most participants exited the program when the time came to assume downside financial risk.

Participation in the Medicare Shared Savings Program has been tepid over the past couple years in general, with participation growing slightly in 2022, compared to last year, but still not reaching 2020’s levels.