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March 7, 2017

Small but growing number of ACOs assume downside risk amid MACRA incentives

Daily Briefing

A small but increasing number of Medicare accountable care organizations (ACOs) are taking on a higher share of downside risk in order to potentially qualify for larger bonus payments under MACRA in 2019, Elizabeth Whitman writes for Modern Healthcare.

The trend applies to a small minority of ACOs. The vast majority of Medicare ACOs remain in upside-only models, meaning they can share in any savings they achieve (as long as they also hit quality targets) but do not risk losing money if costs increase relative to their benchmarks.

MACRA details

Under MACRA's Quality Payment Program (QPP), eligible professionals can choose from two payment tracks:

  • The Advanced Alternative Payment Model (APM) track, for clinicians who take on a significant portfolio of Advanced APMs, which include risk-based ACO models; or
  • The Merit-based Incentive Payment System (MIPS), for providers who are reimbursed largely through fee-for-service.

Eligible providers who participate in MIPS beginning in 2019 will be able receive penalties or bonuses of up to 4 percent. That percentage will rise incrementally until it reaches 9 percent in 2022.

Those in the Advanced APM track are eligible to receive a 5 percent incentive payment, if in performance year 2017 they receive 25 percent of their payments for Medicare-covered services through Advanced APMs or see 20 percent of their Medicare patients through Advanced APMs. Those thresholds will increase in future years.

ACOs taking on more risk

CMS data show few eligible professionals, about 10 percent, will qualify as participating in Advanced APMs in 2017, Whitman writes. However, industry experts say more could follow in the coming years.

Steven Shortell, a professor of health policy and management at the University of California-Berkeley, said, "More and more (ACOs) are assuming more risk" and predicted "that the pace of that change is going to accelerate." However, Shortell added, "I don't think it's going to happen overnight."

According to Whitman, ACOs that have taken on more downside risk typically are led by physicians and have experience operating in Medicare's ACO models.

For instance, Jeff Spight—president of Collaborative Health Systems, a division of Universal American that operates 18 ACOs as joint ventures with physicians—said the company felt taking on more risk in two of its ACOs , Accountable Care Coalition of Southeast Texas and the Accountable Care Coalition of Chesapeake, "was a great next step for our physicians."

Spight added that the Next Generation ACO model, which qualifies as an Advanced APM under QPP, provides an "economic" and "legal" way for physicians to "focus on how the delivery system should look outside the clinic walls." He added, "It's putting them in charge of which specialists, which post-acute care facilities, which home-care setups do we really want to home in on" (Whitman, Modern Healthcare, 3/4).

Learn how to maximize your performance under MIPS

MACRA will fundamentally change the way clinicians are paid by Medicare. This webconference will focus on the Merit-Based Incentive Payment System (MIPS) Track of MACRA, which we expect most clinicians will fall into in 2017.

We'll cover the reporting requirements groups need to be aware of, strategies for effective reporting, and how groups can take advantage of additional flexibility in 2017 to maximize payment in 2019 and beyond.

Register here

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