Accountable care organizations (ACOs) were handed a big win in the 2023 Physician Fee Schedule (PFS) with several changes to the shared savings program that will likely encourage participation.
The Centers for Medicare and Medicaid Services (CMS) finalized changes to the Medicare Shared Savings Program, which is the nation’s largest ACO program that covers more than 11 million people with Medicare and includes more than 500,000 healthcare providers. ACOs, which are groups of healthcare providers that work together to coordinate care and lower costs, while also taking on positive and downside financial risks. ACOs have achieved big savings wins over the last several years, including saving CMS more than $4 billion in 2020 with more than 500 participating ACOs.
CMS said it is still finalizing proposals for new payments for new ACOs to use to support their participation in the program, including hiring additional staff or addressing social needs of people with Medicare. The agency is also finalizing a health equity adjustment to ACO scores, revising the benchmarking methodology and giving ACOs more time before being hit with downside risk.
These changes are likely to help encourage new and established ACOs. The changes were applauded by the National Association of Accountable Care Organizations (NAACOS)
“Today’s finalized changes to Medicare’s largest ACO program bring a win to patients and will absolutely help providers deliver accountable care to more beneficiaries,” NAACOS President and CEO Clif Gaus, ScD, said in a statement. “On balance, we believe this final rule will grow participation in accountable care organizations, which have already generated billions of dollars of savings for our health system.”
Extending the time before ACOs take on downside risk will minimize negative exposure for many ACOs. According to NAACOs, some ACOs may have up to seven years before they would have to assume downside risk.
While the changes were welcome for ACOs, NAACOS did criticize one factor in the benchmarking.
"We remain concerned with CMS’s use of a prospectively projected administrative growth factor for ACO benchmarks or their financial spending targets,” Gaus said. “As we stated in our comments on the proposed rule, more than a third of ACOs would be harmed by this change. Instead, we ask for more collaboration between CMS and the ACO community to build a better bridge to a more sustainable benchmarking strategy. Specifically, CMS should consider correcting the ‘rural glitch,’ where ACOs no longer benefit from the regional adjustment when lowering the spending of their assigned patients. This change would greatly help ACOs, but remains in effect even after today’s changes."
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."