ACOs at a Crossroads

This white paper is designed to call attention to the significant challenges facing accountable care organizations (ACOs) as they prepare for a new reality in Medicare and the rapidly evolving health care industry. ACOs represent a refined approach to the delivery of health care and were created to facilitate coordination and cooperation among providers to improve the quality of care and to reduce unnecessary costs. Although the ACO model holds great promise, Medicare ACOs are at a crossroads. After initial rapid growth in the Medicare Shared Savings Program (MSSP) and strong commitments from ACOs to a model that can transform care delivery, recent policy decisions by the Centers for Medicare & Medicaid Services (CMS) and the Administration could significantly undercut the ability of ACOs to flourish individually and collectively. Should the Administration remain on its current policy trajectory, Medicare ACOs may be destined to decline over time, precipitating the end of today’s ACOs.  

The National Association of ACOs (NAACOS) is the largest association of Medicare ACOs, representing over 3 million beneficiary lives through 180 MSSP ACOs, Next Generation, Pioneer and commercial ACOs. NAACOS is an ACO member-led and member-owned non-profit organization that works on behalf of ACOs across the nation to improve the quality of Medicare delivery, population health and outcomes, and health care cost efficiency. This white paper details key challenges for ACOs and suggests solutions to address them in a way that would strengthen ACOs and ensure their long-term viability. NAACOS recently conducted a survey of MSSP ACOs on their costs, ability to take on risk, and feedback on implementation of the Medicare Access and CHIP Reauthorization Act (MACRA) and, as seen later in this document, the findings are compelling. This white paper incorporates the survey findings along with NAACOS’s policy recommendations, including requests that CMS and the Administration take immediate action to:

• Account for the significant investments ACOs make by including them in calculations of ACO risk,
• Address shortcomings of existing ACO two-sided risk models which require levels of financial risk that are untenable for many ACOs,
• Include all ACOs in CMS’s list of Advanced Alternative Payment Models (APMs) under MACRA, and
• Remedy issues related to the overlap of competing CMS programs in a way that prioritizes population-based payment models such as ACOs.

As we have seen, it is a long, heavy lift for many ACOs to achieve early success, which is necessary to enable their continued participation and prepare them to migrate to risk-based models. ACOs are on the cusp of so much potential, and we hope this white paper starts a dialogue about these issues so we can work together to support ACOs today and moving into the future.