Medicare Shared Savings Program ACO key to value-based care

A crucial deadline has arrived that could help determine whether the federal government’s ambitious long-term plan to promote value-based care in Medicare will come to fruition.

Healthcare providers had to submit applications by Thursday to participate in fee-for-service Medicare Shared Savings Program accountable care organizations next year, an initiative central to the Centers for Medicare and Medicaid Services’ aspiration that every Medicare enrollee be treated under value-based care by 2030.

The Affordable Care Act of 2010 created the Medicare Shared Savings Program, which attracted many hospitals, physician offices and other providers that serve traditional Medicare beneficiaries. But participation has plateaued since 2019, prompting CMS to modify the program’s incentives last year to lure more providers. According to CMS, 10.9 million people are under the care of 480,000 providers that are part of 456 Medicare Shared Savings Program ACOs.

“These policies are expected to drive growth in participation, particularly in rural and underserved areas, promote equity, and advance alignment across the accountable care initiatives, and increase the number of beneficiaries served by ACOs participating in the program by up to 4 million over the next several years,” a CMS spokesperson wrote in an email.

As it remade the Medicare Shared Savings Program, CMS addressed, but did not entirely revamp, the benchmarking methodology that discouraged participation over the past several years, said Sean Cavanaugh, chief policy officer at Aledade, a Bethesda, Maryland-based primary care organization.

ACOs dropped out of the program because the financial arrangement wasn’t sustainable, Cavanaugh said. The chief complaint was that CMS would rebase benchmarks at the end of Medicare Shared Savings Program contracts, effectively eliminating the savings ACOs accumulated, he said.

CMS also changed the benchmarks to curb what is known as ratcheting, which is when an ACO cannot accrue savings over time when the benchmark falls because of successful cost-cutting efforts in its market. Under the modified Medicare Shared Savings Program, those benchmarks also reflect national trends, which mitigates the penalties that high-cost providers would owe under the old system.

The new adjustable benchmarks that factor in national trends are a step toward correcting this issue, said Aisha Pittman, senior vice president of government affairs for the National Association of ACOs. Ratcheting is part of why provider participation stalled, she said.

The National Association of ACOs would like CMS to incorporate regional trends when it publishes the physician fee schedule proposed rule this year, Pittman said. The association also contends that CMS should update the Medicare Shared Savings Program to incorporate switchable payment structures such as those that are part of the ACO Realizing Equity, Access and Community Health Model (known as ACO REACH) and the discontinued Next Generation ACO Model, she said.

Aledade, the largest network of independent primary care practices, launched its first two ACOs in 2015 and participates in 44 ACOs that cover more than 1 million Medicare beneficiaries, which equates to 10% of the Share Savings Program total, Cavanaugh said. Aledade expects the number of patients treated under its ACOs to significantly increase next year, he said.

Providers see the value of and rewards for providing better primary care at lower cost, Cavanaugh said. From a primary care perspective, the program is the best value-based initiative with the most recognition among and financial investment in primary care providers, he said. “The ACO program will give a greater reward to the work that they do,” he said.

Despite the appeal of upfront per-patient, per-month payments that other value-based programs such Comprehensive Primary Care offer, primary care practices can earn more money by participating in successful ACOs, Cavanaugh said.