ACOs in the MSSP model head into future risk

January 1 marked the second start date for Accountable Care Organizations participating in newly redesigned model of the Medicare Shared Savings Program requiring them to take financial risk.

For the January 1, 2020 start date, CMS approved 53 applications for new ACOs and 100 applications for renewing ACOs, according to Centers for Medicare and Medicaid Services Administrator Seema Verma, in a blog posted on Health Affairs.

"I'm especially proud to report that the number of ACOs taking on risk for cost increases has grown significantly -- from 93 ACOs at the start of 2019 to 192 at the start of 2020," Verma said.

But the National Association of Accountable Care Organizations countered that overall participation in the Medicare Shared Savings Program remains flat following landmark changes CMS enacted in 2018. Today's data show 517 ACOs are participating in the program in 2020, down from a high of 561 two years ago and 518 last year. Just 35 Shared Savings Program ACOs will enter into their first contract with CMS. Between 2012 and 2018, the program averaged 107 new ACOs annually.

The numbers for MSSP are important, because to stay in what has been called the most successful of CMS's value-based programs, ACOs are being required to take downside risk.

CMS released its mandate for the organizations to share financial risk, as well as reward, in its final rule, Pathways to Success, in December 2018.

In July 2019, the initial start date for the new program, about 40 new ACOs entered MSSP, which is less than the 100 new ACOs the program averaged in the first seven years, according to NAACOS.

CMS said 90% of the eligible ACOs with participation agreements that expired on December 31, 2018, elected to extend their agreement for six months.

Those ACOs already in the program will have to take on downside risk starting in 2021, according to Kanav Hasija, cofounder and chief product officer at Innovaccer. ACOs new to the program will have until 2022.

An estimated quarter of ACOs in MSSP are already taking downside risk, he said. This is expected to increase to two in five, he said.

WHY THIS MATTERS

MSSP, established in 2012, is credited with summoning the real start to value-based care.

Research from MedPAC has shown that MSSP generates around 1% in savings. While this might not seem to be much, 1 to 2% in savings translates into an estimated $1.7 billion saved in 2018. The total came to $739 million after shared savings bonuses and shared loss payments were taken into account.

Compare this to Medicare Advantage plans. While MSSP saves roughly 1%, while Medicare Advantage spending is between 2 and 5.5% higher than that of traditional Medicare, according to MedPAC.

Only traditional Medicare can be part of the MSSP program.

The ACO model spurs coordinated care for physicians and hospitals to work together to improve outcomes and to lower costs. Providers can earn back part of the savings they generate for Medicare by hitting predetermined spending goals. Now they are being required to also take risk.

The ultimate success of MSSP will hinge on voluntary provider participation, according to Health Affairs.

Where CMS goes, private insurers follow, is the thinking.

A drop in MSSP numbers could represent a setback to value-based care efforts.

CMS rationalized that in analyzing MSSP data since the program's inception, ACOs improve quality and lower costs when they participate in two-sided models, according to the Health Affairs report. More than 80% of ACOs in MSSP were still participating in the upside-only model, saving CMS less per beneficiary than organizations in the average two-sided model.

THE SAVINGS

Before the new mandate, ACOs could stay in the MSSP program without taking financial risk, only share in the savings, if there were any.

In 2018, 37% of accountable care organizations saved enough money to earn shared savings bonuses. Also, 66% of ACOs saved Medicare money compared to set spending targets or benchmarks. Both of these numbers were increases from previous years, according to data from the Centers for Medicare and Medicaid Services that was released by NAACOs.

However, a report published in July 2019 in the Annals of Internal Medicine claims MSSP is associated only with modest savings.

High-cost patients and high-cost doctors were much more likely to exit ACOs than low-cost patients and doctors, the report said. After adjustment for clinicians' nonrandom exit, the MSSP was not associated with improvements in spending or quality, the report said.

PATHWAYS TO SUCCESS

In the final rule, CMS replaced MSSP's existing Track 1, 1+, 2 with a new basic track; and Track 3 with a new enhanced track.

The basic track contains five participation levels and offers ACOs a path to higher risk and reward during the five-year agreement period.

The enhanced track is the model of highest risk and reward. CMS advances the ACOs in the basic track each year to the next level and expects all ACOs to eventually participate in the enhanced track.

Basic track ACOs can earn up to 40% shared savings for one-sided models and enhanced ACOs can earn up to 75% shared savings but could also face up to 75% losses.

HOW TO SUCCEED

Ranking among the largest ACOs in the nation, Advocate Aurora Health, an early participant in the program, achieved $61 million in savings in 2018 through its three affiliated ACOs, according to Advocate Aurora Health Chief Medical Officer Dr. Gary Stuck.

Over 200,000 Medicare beneficiaries were part of Advocate Aurora's MSSP in 2018. 

The ACOs achieved the highest taxpayer savings in Illinois and the second highest in Wisconsin, he said.

The three ACOs received $28 million back from the program, money that was re-invested in quality improvement programs.

"We focused on a different business model and becoming more efficient," Stuck said.

The health system focused its efforts in many areas, but one that made a big difference was in redirecting patients to the best care setting, which helped prevent readmissions and unnecessary visits to the ER.

"We look at patients with congestive heart failure and COPD," Stuck said. "We provided more focus and attention, so there might be a follow up to a congestive heart failure clinic."

A patient might get a phone call about medications.

A post acute network helps coordinate care upon discharge. When it's not possible for a patient to go home, the network's partnership with skilled facilities kicks in. This started in Illinois and the partnership has been extended across facilities in Wisconsin.

"We aligned incentives to provide the infrastructure," Stuck said. "It does take an investment in these programs: an investment in people, analytics, care coordination across the continuum and care coordinators imbedded in primary care offices."

The health system takes downside risk, not just in MSSP but in other contracts, which means the entire system is on the same page.

"Taking risk we were able to be innovative," he said.

WHY ACOs WORK

The adoption of value-based care models is expected to account for 59% of healthcare payments by 2020, Hasija of Innovaccer said.

There are some apprehensions in the market, but the key reason why ACOs work is because healthcare in the U.S. is a maze and patients don't know how to navigate the maze.

The ACOs taking on more downside risk will have a population they're comfortable with, he said.

To make money in the CMS model, health systems need technology, data and narrow networks.

"The only way to get that back, if you're able to build a narrow network, you're increasing your revenue," Hasija said. "If you make that care more efficient, you make money both ways. You get a share of the savings. That's the ACO construct."

The trend is increasing for ACOs to save money, he said.

One of the biggest challenges is interoperability and for health systems to have a full record of the patient, in real time.

Innovaccer is in the business of the whole team concept and in using algorithms to identify the top measures for overall value in risk-adjusted expenditures. The company recently released its State of the Union report analyzing Medicare ACOs' performance and problematic areas state-by-state.

ON THE RECORD

"ACOs are the present and the future of U.S. healthcare," said Dr. David Nace, chief medical officer at Innovaccer and a former CMO for UnitedHealth and Aetna. "They are the big brains, and they sit in the driver's seat of value-based care, which is becoming the new face of the entire healthcare space."

"If interest in ACOs dwindles, then doctors and hospitals will fall back into a fragmented, fee-for-service system, and any momentum to transform our health system will be lost," said Clif Gaus, president and CEO of the National Association of Accountable Care Organizations. "NAACOS feared that changes CMS made under Pathways would throw off the careful balance of risk and reward for too many ACOs. Sadly, those fears may be coming true."  

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com