It's August 2021 and two senior accountable care organization (ACO) executives and their physician boards are faced with an important decision: what track should their ACO select for next year's Medicare Shared Savings Program (MSSP)? Both ACOs are sitting in Basic "Track B" and would be forced into downside risk next year under the new program rules.
One group decides to leave the MSSP program entirely and dissolve the ACO -- the downside risk is too much to handle, especially in the wake of a difficult pandemic and growing administrative burden to participate. The other group not only decides to continue, they jump ahead multiple tracks and select the highest risk track possible (the "Enhanced" track).
One backs out, the other goes even further. What happened here?
Background
Formed under the MSSP, which is managed by the Centers for Medicare & Medicaid Services (CMS), an ACO is a healthcare organization led by doctors, hospitals, or other healthcare providers that has elected to have provider reimbursement payments tied to MSSP quality metrics and reductions in the cost of care. ACOs that deliver on those metrics and the promise of reduced costs and high-quality care for patients receive a share of the savings they generate for the program over the course of a year.
Starting in 2019, CMS changed MSSP rules to the new Pathways to Success program structure. One key change forced ACOs to take downside risk after at least 2 to 3 years in the program. Downside risk is exactly what it sounds like -- if costs for the ACO's population go up, the ACO has to share with CMS in the losses (i.e., write a check to CMS).
This change was a response to ACOs previously opting into MSSP without penalty -- if you achieved shared savings, great! If not, no big deal. After 2019, however, ACOs that selected the lowest track to avoid downside risk for the first years would have to move into downside risk eventually.
In 2021, ACOs worried about moving to risk received a temporary reprieve as a result of the COVID-19 emergency: CMS would allow them to stay in the no downside track for another year. But all that came to an end for 2022, when ACOs that had selected Track A that first year ultimately had to move to risk.
So, what happened? Well, .
2022 Enrollment
CMS announced in late January 2022 that the total numbers of ACOs increased from 477 to 483. Since there were 66 new ACOs, that means 60 ACOs also left the program. And the numbers look even worse compared to 2020, when there were 517 ACOs serving more patients than they will in 2022.
While this picture looks grim, when you look closer, something else is happening.
First, in 2020, ACOs earned the most they ever had at , up from $1.5 billion in 2019.
More importantly, the tracks that ACOs selected in 2022 shifted significantly. The number of ACOs in the lowest Basic tracks (lowest risk) in 2021 to 199 in 2022. At the same time, ACOs in middle Basic tracks increased year-over-year and the highest increase came in the Enhanced track (highest risk) from 76 in 2021 to 146 in 2022.
The irony is that while some ACOs are leaving value-based care, others are doubling down.
Factors for Success
The natural question is, why? Why are some groups pessimistic and others extra optimistic?
First, the best ACOs -- those delivering the highest quality care and generating the most savings -- now come in with a track record of success over several years, whether in the MSSP program or elsewhere in Medicare Advantage. Seeing repeatable success creates the organizational confidence to move into more risk. On the flip side, if you've repeatedly failed or had inconsistent success, you rightfully might not feel great about taking downside risk.
Second, the best ACOs now have a solid backbone of actuarial analysis, with experts reviewing the program mechanics and modeling out potential outcomes. They can predict, with reasonable accuracy, whether the ACO has a chance at success, with the right mix of cost-saving initiatives. They understand the shifting dynamics of their group and the implications of critical pieces like the benchmarking or risk adjustment methodologies.
Last, the best ACOs don't view value-based care as a "side hustle." It's core to the mission of the organization. Now, ACOs must have the culture, resources, organizational alignment, and leadership to succeed in value-based care. It must be part of who they are as an organization.
Looking Forward
While the recent CMS report suggests ACOs are slowing down, they ironically are also speeding up. We are no longer in the early innings of value-based care where success is guaranteed -- it's not. CMS must still foster new participation in MSSP from less experienced organizations. At the same time, ACOs must take their game to the next level to prepare for greater levels of risk (and reward). This may mean some groups are not ready for that next step. But we should remain confident that many others are ready and prepared for what comes next.
Rick Foerster is SVP of Value-Based Operations at Privia Health, an organization with seven MSSP ACOs. He is also part of the National Association of ACOs (NAACOS) and American's Physician Groups policy committees.