As the end date for the Accountable Care Organizations Realizing Equity Access and Community Health Model (ACO REACH) draws near, the Centers for Medicare & Medicaid Services (CMS) is developing its next total cost of care (TCOC) model. NAACOS has shared insights and suggestions with colleagues from CMS to draw inspiration from past success and lessons learned to build a new model that helps advance the transition to value-based care in Medicare. Outlined below are key recommendations we’ve emphasized.
Sustainable Benchmarks
CMS must ensure that alternative payment models (APMs) remain financially preferable to fee-for-service by establishing predictable and sustainable benchmarks. The successor model should avoid penalizing providers for past performance while continuing to return savings to Medicare by addressing benchmark issues in current APMs. Sustainable, long-term participation should be supported by:
- Adding back shared savings, a predictable and simple approach to address the benchmarking “ratchet”;
- Continuing to test approaches for administratively set benchmarks, while discontinuing the flawed Accountable Care Prospective Trend;
- Considering benchmark categories beyond the Medicare enrollment categories or benchmark adjustments to incent inclusion of specialized populations (e.g., complex high-needs, rural, certain clinical conditions like oncology and ESRD);
- Updating benchmarks to reflect payment policy changes in other Medicare programs to promote accuracy and fairness; and
- Aligning any use of the Medicare Advantage (MA) Rate Book with MA (i.e., using a 5-year lookback).
Additionally, there are opportunities to better capture the clinical acuity of Medicare beneficiaries. CMS should more broadly adopt concurrent risk models like those used with the ACO REACH High Needs ACOs across all model tracks. CMS should also leverage ACOs to pilot test risk adjustment approaches using clinical data derived from the medical record.
Beyond these components, it’s important to remember that ACOs and their providers are bearing financial risk for substantial Medicare fraud. The next model must improve protection of ACOs from fraud, waste, and abuse outside their control.
Encouraging Specialist Engagement Through Downstream Payment Arrangements
ACO models have proven that implementing primary care capitation inside TCOC models improves cash flow for practices and leads to stronger success of the TCOC model. We must go beyond primary care and incorporate flexible downstream payment options and targeted incentives that improve cash flow, enable care investments, and align with private-sector value-based care models for specialists.
ACO REACH and NextGen ACO included approaches for ACOs to negotiate a reduction of claims payments for capitation or to fund incentives. While uptake has been slow, CMS recently began providing data on specialists’ performance that will enhance ACOs’ ability to negotiate downstream payment arrangements. A new model must include options for ACOs to negotiate discounts and voluntary capitation with all providers. CMS can further support these efforts by:
- Creating incentives for specialist engagement, such as allowing downstream arrangements to count toward qualifying provider (QP) status and exempting participating specialists from other mandatory CMS models.
- Sharing local market data on specialist cost and quality beyond the data ACOs already receive to aid negotiations.
- Avoiding overly complex episode-based payment constructs that do not align with private-sector value-based care and payment practices.
Expanded Alignment
We share CMS’ goal to align more patients to ACOs. Both expanded voluntary alignment and optional geographic alignment across all TCOC models serve this goal and can bring new providers into the model.
Provider Burden & Enhanced Flexibility
ACOs need innovative tools to effectively engage patients in their well-managed care. Additionally, these tools serve as strong nonfinancial incentives for provider participation, freedom from the regulatory burdens of fee-for-service. We appreciate the Administration’s focus on deregulation. A new model should reduce provider burden by:
- Employing a quality reporting approach that leverages data in a streamlined manner using current and emerging technology.
- Allowing ACOs to develop simple, streamlined beneficiary communications and aligning communications with Medicare Advantage (MA) marketing requirements.
- Simplifying required reporting for waiver implementation and use, allowing ACOs to select subpopulations and recommend waivers to CMS, and more closely aligning waivers with MA flexibilities.
Additionally, targeted evidence-based supplemental benefits, e.g., dental, hearing, vision, would help improve outcomes and patient satisfaction, assuming the additional benefits are accounted for in the financial methodology.
Transition Between Models
Uncertainty about program timelines and transition pathways deters participation in alternative payment models since it creates avoidable business risk. NAACOS urges CMS to act now and extend ACO REACH at least one year to avoid participation cliffs and preserve infrastructure investments made by ACO REACH providers.
NAACOS and our members stand ready to partner with CMS to implement an ACO REACH successor that improves outcomes, reduces total cost of care, empowers patients, and sustains robust provider participation. We look forward to continued engagement with the Administration to advance accountable care.
