ACOs' Real Test Will Come with Two-Sided Risk
Of the 89 who were approved, only five took risk on both sides of the equation. That means 84 of the groups will face no risk of loss through the ACO demonstration. Let that sink in for a moment. They can benefit from any cost savings they achieve over traditional fee-for-service reimbursement, but they can't lose. In short, for providers, what's not to like? The majority of these ACOs are physician-oriented organizations, and much of the savings they are expected to generate for CMS will come from decreased hospital utilization. Therefore, most of these organizations won't be goring their own oxen.
The five that chose to accept risk of losses are taking on true risk, but the others are not. They're smart not to do so.
Here's why, according to a sentence buried in a release from CMS: "Because the Shared Savings Program is part of the original Medicare fee-for-service program, beneficiaries served by these ACOs will continue to have free choice about the care they receive and from whom they seek care, without regard to whether a particular provider or supplier is participating in an ACO."
That's the rub. You can hope patients will seek all their care from your ACO, but you can't make them, and therefore you have little control over the costs they will incur for their care.
CMS says this and other Medicare Shared Savings programs (including the 32 organizations in Pioneer ACO program and the six Physician Group Practice Transition Demonstrations) could save up to $940 million over four years.
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