Did you know that some ACOs operating under the Medicare Shared Savings Program (MSSP) were not required to take on risk for increases in costs for up to six years before taking on ”downside” financial risk?

Additionally, they had waivers of certain laws available to them, including waivers of certain fraud and abuse laws for specified financial arrangements. All of this is changing under the redesigned program called Pathway to Success which puts ACOs on a quicker path to taking on real risk, with accountability for spending increases generally required after two years for new ACOs.

January 1, 2020, marked the second start date for ACOs under the redesigned program following the initial start date for the new program options of July 1, 2019. For the January 1, 2020 start date, CMS approved 53 applications for new ACOs and 100 applications for renewing ACOs. The total number of Medicare beneficiaries served by health care providers in ACOs is now 11.2 million, up from 10.4 million at the start of 2019. Nearly 30 percent of all beneficiaries in fee-for-service Medicare are now served by a health care provider in a Shared Savings Program ACO.

The number of ACOs taking on risk for cost increases grew from 93 ACOs at the start of 2019 to 192 at the start of 2020.

Low Revenue vs High Revenue ACOs

The Centers for Medicare & Medicaid Services classifies an ACO as either low or high-revenue based on a threshold of revenue in Medicare Parts A and B. The classification, part of the new “Pathways to Success” ACO program, is to distinguish which ACOs are led by physicians and hospitals.

High/Low Revenue ACOs

ACOs Percent
High Revenue 247 48%
Low Revenue 270 52%

In 2018, low-revenue, physician-led ACOs performed significantly better than the high-revenue, hospital-led ACOs. On average, physician-led ACOs produced almost 7 times the amount of Medicare savings per beneficiary than hospital-led ACOs.

Low-revenue ACOs, which are typically led by physicians, generated $180 in Medicare savings per beneficiary in 2018. High-revenue ACOs, which are typically led by hospitals or health systems, generated $26 per beneficiary.

Physician Led ACOs

Physician participation in accountable care organizations (ACOs) reached a milestone in 2018. More than half of physicians reported their practice was part of an ACO. By ACO type, 38.2% of physicians belonged to a Medicare ACO, 26.3% to a Medicaid ACO, and 39.0% to a commercial ACO.

For more resources on ACOs, see https://remingtonreport.com/intelligence-resources/acos-health-systems/

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