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Stephanie Pellitt

, National Council for Behavioral Health

CMS Proposes Overhaul of ACO Program

August 16, 2018 | Medicare | Comments
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The Centers for Medicare and Medicare Services (CMS) are planning significant changes to a value-based payment model known as Accountable Care Organizations (ACOs) in a sweeping rule proposed last week. The rule would give new ACOs just two years before they must start sharing savings and losses with the agency. The proposal has drawn criticism from hospital groups and ACO stakeholders, who say the plan will cause many ACOs to leave the program. Comments on the proposed rule are due by October 16, 2018.

Accountable Care Organizations (ACOs) are groups of health care providers who come together to provide patients a full range of health care services, including mental health and substance use disorder services. Existing ACOs have approached behavioral health services in various ways including contracting with specialty mental health and addiction treatment providers.

Initially, under the Medicare Shared Savings Program (MSSP) program, there were two options offered to entice providers into joining ACOs: one model allowed them to share in whatever savings they accrued for Medicare; the other gave ACOs a bigger share of those savings, but only on the condition that they also accept financial penalties if they missed their savings targets. CMS is saying that from now on, if you want to be in an ACO, you can only stay in the reward-only model for two years before accepting some financial risk.

CMS acknowledged this will lead to a decline in ACO participation but believes the remaining ACOs will drive the biggest savings. CMS estimates that the overhaul will lead to 109 fewer ACOs in the program at the end of 10 years. According to CMS Commissioner Seema Verma, “We’d rather work with a [smaller] group of providers that are serious about delivering value, serious about delivering better quality care at a lower cost.”


Find the proposed rule here as well as a fact sheet and blog post.