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January 10, 2019

NAACOS Calls for Later Application Deadline for Medicare ACOs 

WASHINGTON – The Centers for Medicare & Medicaid Services (CMS) late Wednesday announced applications to participate in the new Pathways to Success accountable care organization (ACO) program will be due February 19, two months after the agency published a nearly 267-page rule overhauling the Medicare Shared Savings Program. In response, the National Association of ACOs (NAACOS) is calling on CMS to give ACOs till later in March to understand the complex changes and determine participation options with affiliated doctors, hospitals, and other providers before committing to high-stakes decisions. 

“ACOs barely have time to understand the new rules, and organizing an application is very complicated and for some it is now a high-risk decision,” said Clif Gaus, Sc.D., NAACOS president and CEO. “There are too many difficult decisions to rush.” 

CMS on December 21 published the final Pathways to Success rule that dramatically shortens the time ACOs have before being put at risk for repaying losses for not hitting pre-set spending targets. The changes also lowered the financial incentive to participate in no-risk models by cutting the shared savings rate to 40 percent. CMS also established a distinction between so-called “high revenue” and “low revenue” ACOs, forcing high revenue ACOs into risk-bearing models faster. 

NAACOS, while grateful to the concessions CMS made in the final rule, remains concerned the changes will limit interest in the voluntary program, possibly compel existing ACOs to drop out and overhaul harm Medicare’s largest value-based care program. The MSSP accounts for 561 ACOs, caring for 10.5 million Medicare patients, roughly 20 percent of Medicare.  

The February 19 deadline applies to new ACOs, ACOs whose agreements expired Dec. 31, 2018, and ACOs who want to end their current agreements and start under the new Pathways structure. ACOs with three-year agreements that expire at the end of 2019 or 2020 are allowed to finish those contracts before starting in the new Pathways structure. 

After interpreting the effects of the changes, ACOs face several critical decisions, including what groups of doctors and providers to include in their ACOs, signing agreements with those groups (which can number into the dozens), electing levels of risk or track participation, establishing repayment options, making choices about what waivers to apply for, among other choices. On top of those decisions, the deadline to apply for CMS’s Bundled Payments for Care Improvement Advanced Model is March 1. Quality reporting for various Medicare programs is also done in January and February. 

"Setting an application deadline two months after publishing the final rule does not give ACOs that have expiring agreements the necessary time to vet the decision internally or the time to process the many elements of the application,” said Jennifer Moore, NAACOS board member and chief operating officer at MaineHealth ACO in Portland, Maine. “Given the significant changes, ACOs need to engage actuaries to understand how we would fare in downside risk. Such an analysis takes time. Without that time, we would have to enter an upside track out of the gate. 

“Further, our ACO has more than 125 tax IDs that need to sign new agreements. On top of that, we must secure a letter of credit (banks indicate that is a six-to-eight week process), evaluate the new waivers, and vet provider and supplier lists,” Moore continued. “I am hopeful that CMS will reconsider this aggressive timeline and balance the need to get started with the understanding that the application process takes planning time." 

NAACOS in its comments to the August proposed rule recommended CMS allow ACOs with agreements expiring in 2018 to extend through December 31, 2019. NAACOS last June urged CMS to provide information regarding the expected timeline for 2019 applications so that organizations may begin to prepare for a condensed application period.  

The ACO model is a market-based solution to fragmented and costly care that empowers local physicians, hospitals, and other providers to work together and take financial responsibility for improving quality, enhancing patient experience, and reducing waste. Providers can earn back part of the savings they generate for Medicare by hitting pre-determined spending goals. Importantly, the ACO model also maintains patient choice of clinicians and other providers.  

Origins of Medicare ACOs date back to the George W. Bush administration, and ACOs have been instrumental in the bipartisan goal to shift the health system to value-based care. A central part of the ACO concept is to transform health care through meaningful clinical and operational changes to put patients first by improving their care and reducing unnecessary expenditures.