Skip to main content

Track 1 ACOs Likely to Bail Out Rather Than Assume Risk

News  |  By Gregory A. Freeman  
   May 07, 2018

Participants in Medicare's ACO program are not willing to take on the risk of losing money. A recent survey found most will quit the program altogether instead.

Requiring risk-based contracts will force accountable care organizations (ACOs) to decide whether the potential upside is worth the possibility of losing significant revenue if they miss quality targets, and the answer for many will be no, according to a recent survey.

Upside risk was acceptable, but taking on the downside risk is a deal breaker for almost two-thirds of the Medicare Shared Savings Program (MSSP) Track 1 ACOs surveyed by the National Association of ACOs (NAACOS).

The group surveyed Track 1 ACOs entering their third agreement periods in 2019, specifically targeting the 82 ACOs that began the MSSP in 2012 or 2013 and remain in Track 1 in 2018. They are required to move to a two-sided ACO model in their third agreement period beginning in 2019.

These were some of the findings:

  • When asked how likely their ACOs were to leave the MSSP as a result of having to assume risk, 71.4% said they were likely to leave, 22.9% said they were not at all likely, and 5.7% said they were unsure.
  • When asked what they view as their top challenges or barriers to assuming risk, the top concerns were the amount of risk being too great, unpredictable changes to the ACO model and CMS rules, and a desire for more reliable financial projections. Those were cited by just 39.4% of ACOs.
  • Another top challenge, selected by 36% of respondents, was "concerns about past performance."
  • The survey also asked ACOs if they were given an opportunity to continue in Track 1 for a third agreement period, how likely would they be to continue participating in Track 1. Seventy-six percent of respondents said they would be "completely likely" or "very likely." 

NAACOS notes these facts that are driving ACO decisions about continuing participation:

  • MSSP ACOs subject to pay-for-performance quality measures earned an average quality score of 95% in 2016.
  • MSSP ACOs that earned shared savings in 2016 had a significant decline in inpatient hospital expenditures and utilization as well as decreased home health, skilled nursing facility, and imaging expenditures.
  • ACOs participating over a longer period of time show greater improvement in financial performance. For example, 42% of MSSP ACOs that started the program in 2012 earned savings in Performance Year 2016 versus 18%t of those that began in 2016.
  • The vast majority (more than 80%) of Medicare ACOs remain in MSSP Track 1, which is largely a result of the challenges listed by the ACOs in the survey.

Clif Gaus, president and CEO of NAACOS, said the survey results "paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk. It's naïve to think ACOs that aren't ready will be forced into risk in what is ultimately a voluntary program. The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value. This would be a real setback for Medicare payment reform efforts."

Gregory A. Freeman is a contributing writer for HealthLeaders.

Tagged Under:

Get the latest on healthcare leadership in your inbox.