The Centers for Medicare & Medicaid Services (CMS) has a long history of using the carrot-and-stick approach to influence changes in the delivery and payment of healthcare services. However, the majority of Track 1 accountable care organizations (ACOs) responding to a new survey indicated that the federal payer has much to improve upon to continue the expansion and success of value-based organizations1.

ACOs participating in the Medicare Shared Savings Program are challenged when only 26% are meeting each of the 33 quality benchmarks necessary to trigger additional revenue opportunities2. These challenges increase when CMS excludes Track 1 ACOs from qualifying for a 5% Medicare Part B incentive payment that Track 2 and 3 participants can receive under the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA)3.

This sentiment was reflected in a recent survey on “ACO Cost and MACRA Implementation” by the National Association of ACOs (NAACOS).

On the question about Track 1 ACOs being excluded from the list of proposed advanced Alternative Payment Models (APMs) under MACRA, 56% of ACO respondents indicated they would leave the program, compared to 32% that would stay4.

More than half of ACOs believe their ongoing operational costs are “significant,” averaging $1.6 million a year5. Single ACOs average just under $2 million a year in operational costs, with multi-ACOs averaging nearly $1 million annually6. These findings are further proof points that many ACOs today are under enormous pressure from the significant operational investments combined with new regulatory policies.

But, the same respondents were overwhelmingly willing to take on downside risk—meaning they would be willing to accept contracts with performance-based restrictions and be responsible for paying CMS for a portion of beneficiary expenditures. While 84% of respondents said their organizations could take on risk within six years, nearly half that number (44%) indicated they would be ready in one to three years7.

Beginning a Critical Conversation

NAACOS hopes that these findings will spark conversations about the investment, risk and policy challenges facing healthcare systems in general and ACOs in particular. The industry has made great strides in a few short years in the move toward value-based care and value-based reimbursement.

There are approximately 397 Medicare ACOs8 and nearly triple that number when commercial ACOs across the country are counted, many of which are making extraordinary gains in care. CMS is to be applauded for announcing in June that it’s introducing regional benchmarks9 for shared savings ACOs, in response to criticism that strong performers weren’t being rewarded for their efforts.

This announcement is an encouraging step in the transformation to value-based care. By working with providers on practical strategies, it could help improve providers’ ability to achieve the Triple Aim of improving patient experience, population health and care efficiency.

Accountable Care Imperative

The transformation from volume to value-based care is creating more than an opportunity for innovative hospitals, physician groups, and payers to embrace the accountable care model— it is actually creating an imperative. Clearly, developing and implementing an accountable care model requires the careful coordination of multiple elements and dozens of discrete tasks.

McKesson has a proven track record of helping healthcare organizations leverage their existing care delivery infrastructure, complementing it with the right people, process changes and technology to turn data into actionable intelligence to help drive better care and financial decisions. Our Value-based Care Services staff can help you develop a five-year road map of your organization’s ideal future state, working with and augmenting your existing staff, as needed, as well as providing additional technology and process changes necessary to help drive value.

For valuable tips on working with providers to effectively manage shared risk and patient populations, download the newly updated McKesson Accountable Care Services Playbook.

1https://www.naacos.com/pdf/MSSP-NAACOSJointCommentLetter020615.final.pdf
2Ibid.
3https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html
4https://www.naacos.com/news/NAACOS-CostandMACRA-Survey-5.24.2016_Final.htm
5Ibid.
6Ibid.
7Ibid.
8https://data.cms.gov/ACO/2015-Medicare-Shared-Savings-Program-Accountable-C/ay8x-m5k6
9http://www.healthcarefinancenews.com/news/cms-finalizes-rules-shared-saviings-acos-will-account-regional-benchmarks