37% of ACOs are taking on downside risk
More accountable care organizations are taking on downside financial risk in the Medicare Shared Savings Program than ever before, with 37% in the program today participating in these arrangements.
This is a notable increase in the number of downside-risk ACOs, according to an analysis from Avalere Health. By comparison, just 10% of ACOs assumed downside risk annually from 2012 to 2017.
The increase is due to an overhaul of the MSSP, after CMS required ACOs to assume downside financial risk in their arrangements after just two years of participation, as opposed to six years previously. The vast majority of ACOs under the old rules participated as only taking upside risk, meaning they would share in financial savings but not have to pay back any financial losses to Medicare. However, the rule changes also led fewer ACOs to participate in 2020 and 2019.
The increase in downside risk also came from more experienced ACOs, as they tend to do better the longer they participate and are more likely to take on downside risk.
Since the level of ACOs with downside risk has remained low for many years, the impact of more arrangement with financial risk is yet to be determined.
“It remains undetermined if downside risk will create the appropriate incentives to reduce Medicare costs,” the analysis reads. “As the growth in downside-risk ACOs continue, future results will provide insight into whether risk is a meaningful factor in ACO success.”
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."