News Release
May 30, 2019 


David Pittman
Health Policy and Communications Advisor
National Association of ACOs
202-640-2689 or [email protected]


NAACOS Offers Feedback on New Direct Contracting Options
Innovation Center Urged Not to Interfere with ACO’s Groundwork 

WASHINGTON – Responding to a request for information, the National Association of Accountable Care Organizations (NAACOS) today submitted feedback on the Geographic Population-Based Payment (PBP) Option, one of three options within the new Direct Contracting Model announced by the Center for Medicare and Medicaid Innovation (Innovation Center) last month. NAACOS supports introducing new alternative payment models that emphasize quality and accountability for total cost of care. 

In its letter, NAACOS urged the Innovation Center to be mindful that the Geographic PBP Option doesn’t undermine the efforts of other, now well-established, Medicare ACO models. Specifically, NAACOS is asking the Centers for Medicare & Medicaid Services (CMS) to launch the Geographic PBP Option in areas with low, if any, ACO penetration. Furthermore, ACO-assigned beneficiaries should be excluded from the populations for which Geographic Direct Contracting Entities would be responsible, so not to interfere with ACO participation. 

“NAACOS appreciates the work of CMS to introduce more opportunities that move Medicare away from a fee-for-service payment system to one that rewards quality, value, and efficiency,” said Clif Gaus, Sc.D., NAACOS president and CEO. “But CMS must recognize the tremendous growth of ACOs in Medicare and the groundwork they’ve laid for future success in this area. That work must not be disrupted, or we risk taking a step backward from the bipartisan goal of changing the way health care is delivered and paid for in this country.” 

Now in its seventh year, ACOs in the Medicare Shared Savings Program (MSSP) assume responsibility for almost 20 percent of all Medicare beneficiaries and a third of those in traditional or fee-for-service Medicare. Data show Medicare ACOs are limiting the growth of healthcare spending at a time when spending continues to grow at a pace that’s faster than inflation of the overall economy. An independent analysis released in December showed the MSSP saved Medicare $2.7 billion between 2013 and 2016. The Next Generation ACO Model also had savings, reflected in the program’s first-year evaluation report which showed 18 ACOs there reduced Medicare spending by $62 million after accounting for shared savings and losses. Initial analysis of second-year results show the program netted at least $165 million to Medicare in 2017.  

Meanwhile, ACOs continue to show they deliver high-quality care. In 2017, MSSP ACOs subject to pay-for-performance measures earned an average quality score of 90.5 percent out of 100 percent. 

“Results are now showing ACOs’ work is translating into billions of dollars in savings to Medicare, extending the life of its Trust Fund, and improving the quality of care seniors receive,” Gaus added. “While we applaud the possibility of new entrants and broader participation in value-based care arrangements, CMS must implement future models mindfully.” 

In a separate letter, NAACOS expresses strong support for the Professional and Global Model Options of the new Direct Contracting Model. Notably, these options build off of ACO programs and principles. NAACOS also offers several recommendations to improve these options, including providing necessary fraud and abuse waivers and expanded utilization management tools to allow entities to better manage their assigned populations. The Innovation Center should also make claims payment optional for Direct Contracting Entities and apply lessons learned from existing ACO programs and Medicare Advantage when crafting risk adjustment and benchmarking policies. 

“These Direct Contracting Model Options represent an important next step in the Innovation Center’s work on accountable care models,” Gaus said. “Especially if CMS adopts NAACOS’s recommendations, we believe these options can improve Medicare’s work to advance value-based care.” 

CLICK HERE to read the letter on the Geographic Option.

CLICK HERE to read the letter on the Professional and Global Options.