ACP Objects to Proposed Changes to ACO Regulations

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Added risk and less shared savings could spur many physicians to drop out, College fears

Nov. 2, 2018 (ACP) – The American College of Physicians has an urgent message for federal officials: Revise proposed regulations regarding Accountable Care Organization (ACO) pathways or face the risk of a physician exodus from a program that's proven to be valuable.

Though ACP has several concerns, it's especially worried about the proposed hikes in the level of risk that physicians will face when they join ACOs and cuts to shared savings rates.

“ACP's message is pretty simple: By slicing the shared savings rates in half and cutting the time allowed in one-sided risk by two-thirds, there's no question that participation rates are going to drop, and significantly so,” said Suzanne Falk, an ACP senior associate in regulatory affairs. “That not only hurts individual ACOs. It means CMS may actually lose money by finalizing these changes.”

At issue is the Medicare Shared Savings Program (MSSP), the largest by far of any of the Advanced Alternative Payment Models. More than 377,000 participating clinicians in 561 ACOs collectively care for 10.5 million Medicare beneficiaries.

ACP strongly supports the MSSP, which it considers a crucial component of the move toward value-based care. Indeed, a report by the Centers for Medicare and Medicaid Services, released at the end of August, found that ACOs in the MSSP saved Medicare a net $314 million in 2017. About 60 percent of ACOs saved money in 2017, and more than a third earned shared savings, CMS reported.

However, ACP has deep concerns about proposed changed to regulations governing ACO pathways that CMS released in mid-August. The College responded to the agency's request for public comment in a 24-page letter sent Oct. 16 to the CMS administrator, Seema Verma.

In regard to the level of risk, ACP noted that it strongly supports the need to create a “glide path” of incremental increases in risk. However, ACP “firmly opposes strict limits on the length of time ACOs may remain at each level of risk provided they are meeting quality and financial performance standards,” Dr. Jacqueline Fincher, chair of ACP's Medical Practice and Quality Committee, wrote in the letter.

ACP cautioned that imposing both-sided risk on ACOs via a two-year limit – instead of a six-year limit – would spur physicians to leave because many would not be able to tolerate the risk.

“MSSP is a voluntary program, which means ACOs that are forced into risk before they are ready will simply drop out,” Falk explained. “Two years is not enough time in one-sided risk, plain and simple. Data show most ACOs don't start achieving modest savings until their third performance year, and more substantial savings until their fourth performance year.”

“One of CMS's primary justifications for moving ACOs into two-sided risk is that one-sided ACOs don't perform as well, but 2017 performance data actually proves just the opposite,” she said.

How many ACOs might decide to fold? Potentially, the number could be high.

“More than 8 of every 10 ACOs is currently in a one-sided model,” Falk said, “so the impact on participation could be huge if CMS does move forward with slashing sharing rates in half and only allowing ACOs two years in one-sided risk.”

ACP also opposes CMS's proposal to cut the one-sided shared savings rate by half.

On average, starting an ACO costs about $1.5 million, Falk said. “That means an ACO understandably needs a reasonable prospect of recouping that investment in order to warrant their participation in the program,” she said. “As it stands, one-sided ACOs are able to keep half of every dollar they earn.”

But, CMS has proposed cutting the shared savings rate by 50 percent for shared-savings-only ACOs. “These ACOs would only be able to keep twenty-five cents on the dollar – half of what they get currently,” Falk said. “This would have a big impact on return-on-investment and would cause a substantial number of ACOs to reconsider whether it was financially viable to stay in the program.”

ACP's advocacy efforts on this issue extend beyond its letter to CMS.

“There's strength in numbers,” Falk said. “In addition to submitting our own comments, ACP has been actively engaged in a coalition with other key stakeholder groups who all signed onto a joint letter highlighting shared concerns over the reduced sharing rate and limited time in one-sided risk. And, a group of bipartisan lawmakers wrote to Administrator Verma echoing those same concerns.”

“CMS certainly is hearing a lot of consistent pushback, particularly on those two proposals, and we're hoping they are receptive to these concerns,” she said.

More Information

ACP's letter to CMS on its proposed changes in the Medicare Shared Savings Program is available on the College's website.

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