Written Statement for the Record
Of
The National Association of ACOs
For the
Senate Committee on the Budget
Hearing on
"How Primary Care Improves Health Care efficiency"
March 6, 2024 

The National Association of ACOs (NAACOS) appreciates the opportunity to submit a statement to the Senate Committee on the Budget in response to the hearing “How Primary Care Improves Health Care Efficiency.” NAACOS represents more than 430 accountable care organizations (ACOs) in Medicare, Medicaid, and commercial insurance working on behalf of health systems and physician provider organizations across the nation to improve quality of care for patients and reduce health care cost. NAACOS members serve over 9 million beneficiaries in Medicare value-based payment models, including the Medicare Shared Savings Program (MSSP) and the ACO Realizing Equity, Access, and Community Health (REACH) Model, among other alternative payment models (APMs). NAACOS appreciates the committee’s leadership and commitment to improving primary care and driving the transition to value-based payment models. Our comments reflect the views of our members and our shared goals.

APMS ARE A PLATFORM FOR INNOVATION AND COST SAVINGS

A major pathway for improving access to health care and lowering costs is through advancing APMs. Over the last two decades, APMs have demonstrated that when providers are accountable for costs and quality and provided flexibility from fee-for-service (FFS) constraints, they are able to generate savings for taxpayers and improve beneficiary care. This emphasis on outcomes allows physicians and other clinicians to improve care coordination and prioritize primary and preventive care, keep patients healthy, and coordinate care across the continuum.

APMs have allowed physicians and other clinicians to change care delivery and improve care coordination while reducing costs. Given the focus on outcomes and prevention, APMs encourage more investment of resources into primary care, which the current FFS payment model has historically undervalued. APMs are becoming more rooted in our health care system but growth has been slower than Congress’ original goal. It is essential to remove barriers to participation and give additional flexibility and tools to innovate care.

Extend Medicare’s Advanced APM Incentive Payments 

The Medicare Access and CHIP Reauthorization Act (MACRA) included advanced APM incentive payments to encourage providers to move into risk-based payment models while also providing funds that allow them to cover services not reimbursed by traditional Medicare (e.g., meals programs and transportation). These are the types of services that help address patients’ social needs, keep patients healthier, and lower costs. 

Develop Solutions to Improve Physician Payment 

Stabilizing Medicare's payment system and ensuring payment adequacy is necessary to help physicians and allow them to continue investing in the infrastructure and staffing necessary to transition into value-based models. The current physician payment system does not account for inflation and results in inadequately paying providers as costs rise. We encourage the committee to continue holding hearings on this important issue and consider developing a new payment system that accounts for inflation in payment updates and maintains stronger financial incentives for physicians that move into APMs.

ACOs Are the Largest and Most Successful Model Leading Medicare's APM Transformation

The MSSP is the largest and most successful value-based care program in Medicare and as such should be utilized as an innovation platform. In 2024, there are 602 ACOs coordinating care for 13.4 million Medicare beneficiaries. ACOs are a voluntary alternative to the fragmented FFS system that gives doctors, hospitals, and other health care providers the flexibility to innovate care and holds them accountable for the clinical outcomes and cost of treating an entire population of patients. 

With primary care as the backbone, ACOs employ a team-based approach that allows clinicians to ensure patients receive high quality care in the right setting at the right time. ACOs improve quality while controlling costs through primary care-focused initiatives such as expanded primary care teams, care coordination strategies, and enhanced data and analytics tools for primary care practices.[1] The ACO model also provides an opportunity for providers to work collaboratively along the continuum while remaining independent. Importantly, ACOs provide shared savings opportunities and enhanced regulatory flexibility that allows clinicians to maintain financial security while practicing medicine more freely. For example, many primary care practices were financially harmed by the effects of the COVID-19 pandemic, and evidence showed that independent primary care practices participating in ACOs were better-equipped to respond to the crisis, supported by alternative revenue sources and workflow tools made available through ACO participation. 

It’s clear these payment system reforms have been a good financial investment for the government. In the last decade, ACOs have generated more than $22.4 billion in savings with $8.8 billion being returned to the Medicare Trust Fund while maintaining high quality scores for their patients. The growth of APMs has also produced a “spill-over” effect on care delivery across the nation, slowing the overall rate of growth of health care spending. Providers in APMs also help make the Medicare program stronger by reducing improper payments. Using enhanced data and analytics, ACOs regularly identify and report instances of fraud, waste, and abuse.

Build on the Innovation Center’s Successes

As the Center for Medicare and Medicaid Innovation (CMMI) tests new payment models, successful models, or key aspects of those models, should be embedded as permanent parts of Medicare via the MSSP. While the MSSP currently includes various participation options with increasing levels of risk and reward, there is currently no full-risk option for ACOs participating in MSSP. Congress should direct CMS to create a separate full-risk option within MSSP to serve as a better bridge between it and ACO REACH. This “Enhanced Plus” track should include greater flexibility in payment design and available waivers. As the only permanent total cost of care model in Medicare, the MSSP should be adapted to remain a viable option for more advanced ACOs and further advance value-based care.

Population-Based Payments for Primary Care

More flexible payment mechanisms can support care delivery transformation, strengthen primary care, and increase participation in ACO initiatives. At a minimum, Congress should direct CMS to create an option for MSSP ACOs to elect partial or full capitated payments for primary care. Hybrid payment systems that include both FFS payments and capitated/population-based payments (PBPs) have gained traction, particularly among the primary care community. Additionally, the National Academies of Sciences, Engineering, and Medicine’s (NASEM) 2021 report recommended a shift to a hybrid payment model to better support robust primary care.[2] Such PBPs would allow ACOs to reallocate resources to advance primary care innovation and transformation. This voluntary payment option should include flexibility for providers to select capitation levels that meet their needs. Given the critical role of primary care in improving quality and controlling costs, implementing a hybrid payment option within the MSSP could be an effective strategy in furthering the transition to value. 

Expand Waivers for APMs 

Current law allows CMS to waive certain Medicare FFS requirements in MSSP and other APMs. This is a critical component of APMs as it allows providers to operate with fewer restrictions leading to a reduction in provider burden and increased care innovation. However, the waivers to date have been limited and can also be burdensome for providers. For example, MSSP only has waivers for telehealth and the 3-day rule for skilled nursing facility stays. Yet the ACO REACH model has access to many more waivers. We believe all APMs should have access to all available waivers and that those waivers shouldn’t be limited to certain models. Congress should direct CMS to establish a common set of waivers for APMs.

Improve Approaches to Test and Scale Innovation

CMMI has been successful in testing innovative payment arrangements and increasing adoption of APMs. The successes of CMMI are not captured within current evaluation approaches. Congress should work with CMS to ensure that promising models have a more predictable pathway for being implemented and becoming permanent and are not cut short due to overly stringent criteria. This includes broadening the criteria by which CMMI models qualify for Phase 2 expansion and directing CMMI to engage stakeholder perspectives during APM development.

Establish Parity Between APMs and Medicare Advantage Program Requirements

Recognizing ACOs’ and MA’s shared goals of improving the quality of care and cost savings to patients, it’s imperative to build parity between the two programs. Misaligned incentives are harmful to advancing value as they increase provider burden, create confusion and disincentives for patients, and generate market distortions that favor one entity over another. Parity can be better provided in the programs’ benchmark and risk adjustment policies, quality measurement, and marketing requirements. ACOs should be allowed to provide comparable benefits to those offered to Medicare Advantage (MA) patients, such as telehealth visits, transportation benefits, home visits, etc. Without parity, providers are forced to spend time managing the various program requirements rather than managing patient care. Congress should direct the Government Accountability Office (GAO) to evaluate how to create more parity between APMs and MA. Additionally, Congress should explore opportunities to incentivize MA plans to enter risk-bearing arrangements with providers.

We thank the committee for this opportunity to provide feedback on this important hearing. NAACOS and its members are committed to providing the highest quality care for patients while advancing population health goals for the communities they serve. We look forward to our continued engagement on improving health care access and lowering costs. If you have any questions, please contact Aisha Pittman, senior vice president, government affairs at [email protected]

[1] https://journals.lww.com/hcmrjournal/Fulltext/2019/04000/Clinical_coordination_in_accountable_care.5.aspx

[2] https://nap.nationalacademies.org/resource/25983/High%20Quality%20Primary%20Care%20Policy%20Brief%201%20Payment.pdf