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Analysis

Senators Urge CMS to Hold Harmless Medicare Shared Savings ACOs

By John Commins  
   April 22, 2020

Lawmakers say at-risk ACOs are being held responsible "for the enormous costs that we expect to result from the COVID-19 pandemic, which are outside their control."

Senate leaders are asking the federal government to "waive the shared loss repayment" for Medicare at-risked accountable care organizations that are grappling with "costs beyond their control due to the COVID-19 pandemic."

In a letter sent Tuesday to Centers for Medicare & Medicaid Services Administrator Seema Verma, Senate Finance Committee members Bill Cassidy, MD, (R-LA), and Sheldon Whitehouse, (D-RI), said that the methodologies for at-risk ACOs in the Medicare Shared Savings Program and other Alternative Payment Models hold responsible physicians and hospitals "for the enormous costs that we expect to result from the COVID-19 pandemic, which are outside their control."

"Some stakeholders estimate that the ongoing COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year, depending on factors such as severity of disease and hospitalization rates," the two senators said.

"Healthcare providers in value-based arrangements will feel the impact of these costs twice: once at the onset and again when their spending is evaluated in the context of their performance in MSSP or another APM," the letter said.

A poll released this month by the National Association of ACOs found that more than half of ACOs in MSSP said they'll "likely" leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic. This year's application deadline for MSSP and APM is May 31, but ACOs can withdraw from the program before that with no penalty.

In their letter, Cassidy and Whitehouse thanked Verma for activating CMS's "extreme and uncontrollable circumstance policy," under which ACOs can get some relief during the pandemic. However, the senators said policy would only "partially address the costs associated with the COVID-19 pandemic and the total financial impact to ACOs."

CMS plans to prorate the 2020 annual losses based on the duration of the public health emergency. For example, if the emergency lasts six months, ACOs would be responsible for half of the losses for the year.  

"The policy does not adequately adjust losses for ACOs in hard hit COVID areas and still holds ACOs accountable for the abnormally high costs of providing care during a global pandemic," the Senators said, adding that adjusting ACO benchmarks, risk scores and quality bonuses "will be impractical."

"Therefore, to ensure that risk-based ACOs that have taken on risk for the total cost of care due to longstanding encouragement and program requirements instituted by CMS are not unduly penalized by the COVID-19 pandemic, we urge you to waive the shared loss repayment for ACOs for performance year 2020," the letter said.

The two senators also recommended that CMS push back the May 31 MSSP termination date for at-risk ACOs "in order to provide immediate assurances to ACOs about CMS' intent to formalize in regulation a 2020 waiving of losses."

“We urge you to waive the shared loss repayment for ACOs for performance year 2020.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

CMS plans to prorate the 2020 annual losses based on the duration of the public health emergency. If the emergency lasts six months, ACOs would be responsible for half of the losses for the year. 

Critics say the policy doesn't adequately adjust losses for ACOs in hard hit COVID areas and still holds ACOs accountable for the abnormally high costs of providing care during a global pandemic.

A NAACOS poll found that more than half of ACOs in MSSP said they'll "likely" leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic.


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