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What ACOs can expect from the Biden Administration

By Chris Emper

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Much of the healthcare industry’s attention during the first few months of Joe Biden’s Presidency has rightfully been focused on how his Administration and the new Democratic-led Congress have responded to the COVID-19 pandemic. Naturally, this has somewhat limited the focus on other key issues, including the future of value-based care and alternative payment models. But today, as the pandemic is slowing and we enter the Centers for Medicare and Medicaid Services’ (CMS) annual rulemaking cycle, that focus in shifting.

On May 4, a coalition of 11 prominent healthcare provider trade associations and organizations wrote a letter to U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra regarding recently finalized changes to the Medicare Shared Savings Accountable Care Organization (ACO) Program’s (MSSP) quality measurement system. The coalition represents groups that represent the majority of the nation’s ACOs, including the American Hospital Association (AHA), American Medical Association (AMA), American Medical Group Association (AMGA), and National Association of ACOs (NAACOS). The letter requested that CMS delay and make significant changes to the ACO quality reporting changes that were finalized by CMS in December 2020.  

Background on the ACO Program 

Since the launch of the program in 2012, ACOs have played a central role in CMS’s work in transitioning the healthcare industry towards value-based reimbursement. The MSSP is CMS’s largest alternative payment model, both in terms of numbers of participating providers and covered patients. But participation is currently on the decline. In January 2021, the total number of MSSP ACOs fell from 517 to 477.

Meanwhile, the number of beneficiaries covered by those ACOs dipped from an all-time high of 11.2 million in 2020 to 10.7 million this year.

Overall, today there are fewer MSSP ACOs than there were in 2017. However, even with fewer ACOs today, the ACO program covers more patients (10.7 million) than it did in 2018 (10.5 million) when the number of ACOs reached a high of 561. This was, at least in part, by design.  

Trump Administration’s ACO Overhaul 

In 2018, the Trump Administration finalized its “Pathways to Success” overhaul of the MSSP program participation options with the stated goal of forcing ACOs to take on downside risk more quickly. While offering more regulatory flexibility and a revised financial cost benchmark methodology, the rule required new ACOs to take on two-sided risk after two years in the program. Implementation of these reforms was set for a gradual phase-in, with voluntary participation for new or existing ACOs starting in July 2019 and mandatory participation for all ACOs coming in January 2021. However, in response to the pandemic, last year CMS pushed the January 2021 deadline.  Even so, today 41 percent of ACOs are taking on two-sided risk, more than double the 17 percent that were doing so in 2018. 

Beyond changing the path towards risk, the Trump Administration implemented major reforms regarding how ACOs are measured on quality. In December 2020, CMS released its 2,165-page final 2021 Physician Fee Schedule Rule. Among other provisions, the rule finalized an overhaul of the MSSP’s quality reporting requirements in a manner that is voluntary for 2021 and mandatory for 2022. The changes would reduce the number of quality measures ACOs actively report on from 10 to three. In addition, CMS would eliminate the CMS Web Interface as an eligible data submission method in favor of implementing electronic Clinical Quality Measures (eCQMs) or Merit-based Incentive Payment System (MIPS) CQMs. Overall, the reforms would cut the number of ACO quality measures to just six (three MIPS CQMs, the CAHPS Patient Experience Survey, and two Administrative Claims measures calculated by CMS).

Many ACOs oppose these changes and in response, the coalition’s recent letter called on the Biden administration “to delay and make significant changes to the way ACOs report and are measured on quality — citing rushed implementation, still unanswered questions on changes, and potential negative consequences to patient care.” The letter questioned the nature and the timing of the changes and made several specific recommendations, including:  

  • Delaying the mandatory reporting of eCQMs and MIPS CQMs for at least three years
  • Limiting ACO reporting to ACO-assigned beneficiaries only, rather than all patients across payers
  • Reassessing the appropriateness of the new measure set and soliciting additional input from industry prior to finalizing a complete set of patient-centered measures for MSSP reporting

Biden Administration’s Early Moves on ACOs

Thus far, with the focus on the pandemic and several key HHS and CMS officials still awaiting confirmation by the Senate, the Biden Administration has been relatively quiet regarding ACOs. However, we know from past statements and the nomination and/or confirmation of several former key Obama Administration officials to top positions in the new Biden Administration that the current Administration will be supportive of ACOs and likely to pursue a policy agenda that encourages continued ACO participation and additional reforms.  

Early evidence of this came on April 27 when CMS released the first of its major proposed 2022 Medicare payment regulations, the hospital inpatient payment system rule. In this rule, CMS cited the uncertainty created by the pandemic in proposing to grant ACOs participating in the BASIC track’s glide path the option to forgo automatic advancement to a higher level of risk in 2022. In effect, this change would allow some ACOs to remain in the program while hitting “pause” for a year on their forced progression towards downside risk.

Beyond the MSSP program, in April the CMS Innovation Center announced that 53 entities were participating in its Direct Contracting ACO model as it officially launched on April 1. The most advanced of its risk-based payment models, the Direct Contracting Model, is built off of the success of the Next Generation ACO model, which launched in 2016 as then the most advanced risk-based model, and today counts 41 ACOs as participants. With the Next Generation model set to end in December 2021 after getting a one-year reprieve in 2020 due to the pandemic, many stakeholders were disappointed when CMS recently announced that it would not be opening an application period for a January 2022 start date in the Direct Contracting model. In response, ACO groups have asked CMS to both extend participation options in the Next Generation program and add an application period for a January 2022 start in the Direct Contracting program.  

Biden Administration & the Future of ACOs

Over the course of the next several months, ACOs will learn a lot more about the Biden Administration’s agenda for value-based payment models. Given ACOs’ strong opposition to the quality reporting changes set to take effect in 2022, it seems likely that some further changes to the way ACOs report and are measured on quality will be forthcoming in the 2022 proposed Medicare Physician Fee Schedule rule this summer. Given the strong demand, it is also likely that we could see an extension or reauthorization of the Next Generation model and/or another application period for a 2022 or 2023 start in the Direct Contracting model. Another potential outcome that should not surprise any long-time followers of CMS policy if it were to happen would be the introduction of a new ACO payment model under a new name- and maybe even with a new acronym!

Also keep in mind that as the pandemic slows, its long-term effects on the economy, federal and state budgets, and our healthcare system will come into sharper focus. In response, we could see significant growth in Medicaid, commercial, and employer-led ACOs in the months and years to come.  

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Chris Emper

Government Affairs Advisor, NextGen Healthcare

Chris Emper, JD, MBA, is government affairs advisor at NextGen Healthcare and president of Emper Healthcare Advisors—a health IT industry advisory and consulting services firm in Washington, D.C. that specializes in helping healthcare providers and technology companies successfully navigate and comply with complex regulations and value-based reimbursement models. Prior to forming Emper Healthcare Advisors in 2016, Chris was vice president of Government Affairs at NextGen Healthcare (NASDAQ: NXGN) and Chair of the Electronic Health Record Association (EHRA) Public Policy committee…

Chris Emper, JD, MBA, is government affairs advisor at NextGen Healthcare and president of Emper Healthcare Advisors—a health IT industry advisory and consulting services firm in Washington, D.C. that specializes in helping healthcare providers and technology companies successfully navigate and comply with complex regulations and value-based reimbursement models. Prior to forming Emper Healthcare Advisors in 2016, Chris was vice president of Government Affairs at NextGen Healthcare (NASDAQ: NXGN) and Chair of the Electronic Health Record Association (EHRA) Public Policy committee.

An expert in The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), The Patient Protection and Affordable Care Act (ACA), and The 21st Century Cures Act, Chris is a frequent speaker at industry conferences and has written or appeared in articles in publications such as Politico, Health Data Management, Accountable Care News, and Medical Economics. From 2016-2019, Chris served as Chair of the HIMSS Government Relations Roundtable, a leading coalition of health IT government affairs professionals.

Prior to joining NextGen Healthcare in 2013, Chris served as a Domestic Policy Advisor for former Massachusetts Governor Mitt Romney’s 2012 Presidential Campaign, where he advised the campaign on policy issues including healthcare, technology, and innovation. He holds a law degree and an MBA from Villanova University and a BA from Boston College.

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