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More Medicare ACOs will take on risk in 2018

About 18% of accountable-care organizations in the Medicare shared savings program will participate in a downside risk contract in 2018, a jump from the just 9% of ACOs who took on risk last year, shows.

There are 561 Medicare ACOs in the program this year and 101 are in a downside risk-based contract. The majority of those ACOs, 55, have joined Track 1+, the newest risk model that doesn't require ACOs to take on as much financial risk as Tracks 2 or 3 of the program. The CMS introduced the track this year as a stepping stone for ACOs to take on potential financial losses gradually.

There are 8 ACOs in Track 2 and 38 ACOs in Track 3.

"Certainly (the numbers) are showing that more ACOs are taking on risk, but it's not going to be mad dash. It is going to be a gradual, sustained movement," said David Muhlestein, chief research officer at Leavitt Partners who studies ACOs.

"Delivery transformation is really hard — if you want to effectively change how you are delivering care it takes a lot of work over a long period of time," he added.

The Medicare shared savings program is only profitable for the CMS if ACOs participate in downside-risk based contracts because the agency can penalize ACOs that miss performance targets. The CMS actually lost $39 million from ACOs in 2016 because it had to pay $691 million in bonuses. Only 5% of ACOs were in advanced tracks in 2016.

Physicians have an incentive to join the advanced tracks as well. Track 1+ and Tracks 2 and 3 are considered advanced alternative payment models under MACRA so doctors can qualify for a 5% bonus payment.

Muhlestein said he expects more ACOs to venture into the risky tracks as MACRA takes hold. The organizations will be able to see how they are performing under MIPS and decide whether or not they are ready to venture into an advanced APM with opportunity for more bonuses.

About 76% of the ACOs up for contract renewal this year decided to do so, the CMS data shows. That's up from the roughly 64% of ACOs last year that decided to stick with the Medicare program.

"There is certainly continued evidence that organizations are starting to figure this out," Muhlestein said.

The number of ACOs overall in the program rose by 81 from 480 in 2017 to 561 this year. About 10.5 million Medicare beneficiaries now receive care from a clinician in a Medicare ACO, up from 9 million beneficiaries last year. Of the beneficiaries, 12.6% are disabled and 6.7% are dual eligibles, according to the CMS.



Maria Castellucci

Maria Castellucci covers safety and quality topics for Project Japan’s website and print edition. Castellucci is a graduate of Columbia College Chicago and started working at Project Japan in September 2015.


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