AHA calls for additional ACO funds, flexibility
Accountable care organization (ACO) formation will require significant upfront investments, so the Centers for Medicare & Medicaid Services (CMS) Innovation Center should combine the Advance Payment Initiative with a grant program to offset that extensive investment, according to the American Hospital Association (AHA).
In a letter to CMS last week, the AHA lauded CMS' Advance Payment Initiative as a pre-payment of a portion of future shared savings that could increase participation in the Medicare Shared Savings Program (MSSP). The AHA also encouraged CMS to be flexible in estimating the appropriate monthly amount that should be disbursed and determining how the reconciliation process between the pre-payments and the calculation of shared savings would be implemented.
The AHA also made suggested ways the agency can partner with providers to make the investment necessary to become an accountable care organization (ACO).
“We fully understand and support the goal of reducing annual per capita expenditures; however, several experienced organizations that participated in previous CMS demonstration projects, including the Physician Group Practice (PGP) demonstration, reduced expenditures but did not receive a shared savings bonus,” the letter read. “In the PGP demonstration, for example, the parameters CMS used to calculate the shared savings bonus were too ambitious to allow many of the participants to share in savings.”
The association cited estimates from McManis Consulting which determined the combined startup and first-year costs are much higher than CMS estimated. For a small ACO, costs were estimated to be $11.6 million and costs for a midsize ACO were estimated to be $26.1 million. CMS estimated costs of $1.8 million for ACO startup and ongoing costs for the first year.
Finally, the AHA asked CMS to consider offering grant money in specific areas to offset the needed investment. “It is unlikely that an ACO, especially those with smaller numbers of aligned beneficiaries, will earn the amounts suggested above through the shared savings bonus. Therefore, each potential ACO will need access to capital in different areas depending on the organization.
“The AHA strongly supports the delivery of accountable care, and we appreciate the Innovation Center’s proposal to implement the Advance Payment Initiative as a way to increase participation in the MSSP,” the organization concluded.
In a letter to CMS last week, the AHA lauded CMS' Advance Payment Initiative as a pre-payment of a portion of future shared savings that could increase participation in the Medicare Shared Savings Program (MSSP). The AHA also encouraged CMS to be flexible in estimating the appropriate monthly amount that should be disbursed and determining how the reconciliation process between the pre-payments and the calculation of shared savings would be implemented.
The AHA also made suggested ways the agency can partner with providers to make the investment necessary to become an accountable care organization (ACO).
“We fully understand and support the goal of reducing annual per capita expenditures; however, several experienced organizations that participated in previous CMS demonstration projects, including the Physician Group Practice (PGP) demonstration, reduced expenditures but did not receive a shared savings bonus,” the letter read. “In the PGP demonstration, for example, the parameters CMS used to calculate the shared savings bonus were too ambitious to allow many of the participants to share in savings.”
The association cited estimates from McManis Consulting which determined the combined startup and first-year costs are much higher than CMS estimated. For a small ACO, costs were estimated to be $11.6 million and costs for a midsize ACO were estimated to be $26.1 million. CMS estimated costs of $1.8 million for ACO startup and ongoing costs for the first year.
Finally, the AHA asked CMS to consider offering grant money in specific areas to offset the needed investment. “It is unlikely that an ACO, especially those with smaller numbers of aligned beneficiaries, will earn the amounts suggested above through the shared savings bonus. Therefore, each potential ACO will need access to capital in different areas depending on the organization.
“The AHA strongly supports the delivery of accountable care, and we appreciate the Innovation Center’s proposal to implement the Advance Payment Initiative as a way to increase participation in the MSSP,” the organization concluded.