Feb 12, 2019

CMS Risks ACO Success by Forcing Move to ‘Second Track’

By Manish Naik, MD

Like many accountable care organizations, Austin Regional Clinic is building a record of success on the Medicare Shared Savings Program’s (MSSP) so-called “Track One”. Now looming, however is an automatic transfer of ARC to the MSSP’s riskier “track two” after years of hard work implementing our value-based, population health treatment model.

On the first track, ARC and other ACOs assume “upside risk,” getting rewarded for taking on overall responsibility for improving quality and providing appropriate care and controlling costs in the process. On the second track, “downside” risk is added, posing the threat of being penalized if specified measurements are not attained.

Reasonable Risk is OK

Generally, ARC supports moving toward a more “capitated care” model and away from fee-for-service payment models that are financially unsustainable for healthcare providers, patients and the federal government. We are open to operating within a “reasonable risk” model that includes both upsides and downsides that foster appropriate care, thereby controlling costs for providers, patients and the feds.

But our support comes with a critical caveat: no potentially costly added or adjusted regulations coming down from the Centers for Medicare & Medicaid Services that increase costs. Another concern: can CMS provide real-time patient attribution and claims data so that we (and other healthcare groups) can quickly analyze and expeditiously institute adjustments to improve services and operations – and avoid downside risks and resulting financial penalties? And can CMS encourage patients to buy into their ACO and its goals by financially incentivizing patients to stay within their ACO network?

If not, there’s not much reason to take on substantial downside risk. A risk model without tools to help control sizable financial losses is not a viable model for any business that wants to stay in business.

Risks for Vulnerable Patients

Uncontrollable risk also discourages ACOs from taking on and retaining chronically ill or severely disabled patients because they can cost more to treat than ACOs will be paid for their care. Such patients comprise growing populations within the U.S. that require increased care, not less: an aging population with higher medical complexity, polypharmacy, and comorbid conditions like obesity and drug addiction. Discouraging care among these groups makes no sense from a broader public health policy standpoint.

Originally, CMS required ACOs to transfer to MSSP’s second track after one, three-year term. In 2014, CMS approved a second term, or six years total. Now, the National Association of ACOs and other healthcare groups have been advocating for extending the first track timeline to three terms, or nine years.

But at a recent American Hospital Association conference, CMS Administrator Seema Verma indicated no such change should be expected. She believes “upside-only tracks may be encouraging consolidation in the marketplace, reducing competition for our beneficiaries.”

Risking MSSP Abandonment

She also maintained that first-track, upside-only ACOs are not seeing cash savings and other improvements. That may be true in certain instances, but certainly ARC is saving money on the first track for all concerned. By forcing ARC and other successful first track ACOs to move to the second track, CMS will instead encourage abandonment of the MSSP altogether.

Certainly, turning back toward financially unsustainable, fee-for-service models shouldn’t be an option – and it isn’t one for ARC. Logic still dictates transitioning to an appropriate, sustainable risk model. But moving from a currently successful risk model, to a riskier one lacking the adequate safeguards and tools for success, is a challenge.

Manish Naik, MD, is Austin Regional Clinic’s Chief Medical Information Officer and Assistant Chief, ARC Internal Medicine Department.

Tags: Dr. Manish Naik