A new survey by The National Association of Accountable Care Organizations (NAACOS) finds that 56 percent of health care organizations in the risk-based Medicare ACO program may drop out of the program because of fear they will have to pay massive losses as the result of the COVID-19 pandemic.
NAACOS surveyed the ACO community in an online poll between April 3 and April 8 sent to all participants of the 2020 Medicare Shared Savings Program and Next Generation ACO Model, including NAACOS members and nonmembers. There were 304 responses from 226 ACOs across the country.
The Medicare Shared Savings Program, the largest value-based payment model in Medicare, fully launched in 2012 and rewards ACOs for lowering spending and improving outcomes for patients. The program saved $3.5 billion from 2013 to 2017 and in 2020 almost 20 percent of Medicare beneficiaries were part of an ACO.
But these ACOs didn’t bargain for a global pandemic when they signed up for the program. NAACOS estimates the coronavirus outbreak could cost Medicare between $38.5 billion and $115.4 billion over the next year. Providers have had to cancel routine, in-office visits for chronic care management, delayed elective procedures, and have diverted quality control staff to handle COVID-19 response elsewhere.
Key findings from the survey
Indeed, as a result of the swings in unpredictability and spikes in expensive hospitalizations, when asked how likely it was they would leave the Medicare Shared Savings Program in response to concerns about having to potentially repay losses for 2020 affected by COVID-19, the survey found:
- 21 percent of at-risk ACOs said they were “very likely” to leave the Medicare ACO program
- 14 percent said they were “likely”
- 21 percent said they were “somewhat likely” to leave
The survey also found that:
- Almost 80 percent of ACOs were “very concerned” about their ACO performance this year
- A quarter of survey respondents expect spending to increase by more than 10 percent as a result of the pandemic
- Nearly a quarter expected spending to increase between 5 and 10 percent
- Only 10 percent expect spending to remain the same or fall because of the pandemic
- 37 percent of respondents weren’t sure about their spending, which the NAACOS said illustrates the great uncertainty they face
NAACOS: ACOs need protections
“When ACOs made a commitment to assume risk, they didn’t expect they’d be handling the risk of a global pandemic,” said Clif Gaus, Sc.D., NAACOS president and CEO, in an announcement about the survey. “Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31. Medicare’s decade-long effort to change how we pay for health care to better reward quality and outcomes may be lost unless Washington acts quickly to throw these providers a lifeline.”
Last month NAACOS joined nine other leading health care organizations to ask the Centers for Medicare & Medicaid Services (CMS) to hold harmless providers who participated in alternative payment models from performance-related penalties for 2020. But CMS has not yet adequately mitigated the costs and disruptions of the pandemic, according to Gaus, and the Medicare program will suffer as a result.
“ACOs are telling us that they will leave the program unless there is protection from the losses of the pandemic, and it would be a tragedy for millions of Medicare beneficiaries to lose the access to care coordination and quality improvement that ACOs offer,” he said, noting that ACOS have established initiatives like care management at home, telemedicine, integrated home health, and an understanding and use of waivers that have helped the U.S. health system respond to the outbreak.
“While that work has helped our health system pivot in their COVID responses, the financial strain and external forces may be too much to survive this pandemic,” he said.