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Whether it was the Next Generation ACO Model (2016-2021), or its successor ACO REACH (2021 - 2026), full-risk models have been some of the most commonly participated ACO models due to their upside potential. In 2023, over 2M Medicare beneficiaries were in accountable care arrangements with REACH ACOs, more than any other CMMI model. If CMS wants to reach its 2030 goal, it must ensure that a higher risk, higher reward option is available to ACOs for the long term, while ensuring that CMS and patients also reap the benefits of broader participation. MSSP offers a suitable safe haven for this model due to its historical success and subsequent strong reputation; furthermore, the model’s mechanisms already solve many of the issues faced in ACO REACH.
It’s called risk for a reason: Higher risk model have both greater upside and downside
CMS is already receptive to the idea of a higher risk track in MSSP. In 2024’s Medicare Payment Rule, CMS sought comment on a full-risk track within MSSP, and prominent advocacy organizations like NAACOS support the concept.
“This [track] would serve the dual purpose of (1) encouraging ACOs to take on higher levels of risk, which would in turn produce higher savings, drive innovation, and improve patient care overall; and (2) providing REACH ACOs with an offramp from the model that is set to expire at the end of 2026 and better leverage MSSP as an innovation platform.” - NAACOS Letter
In crafting this higher risk track, or Enhanced Plus (EN+), CMS should leverage the models scale (of both beneficiaries and participants) to provide robust structural elements, financial incentives, and non-financial incentives for ACOs.
In the existing MSSP chassis, there are 6 options for tracks, ranging from 40% upside and no downside, to 75% upside and 75% downside. Account to the current Pathways to Success rule, a one-sided model is available only for the first two years to most eligible ACOs.
ACOs should not be forced to progress into the EN+ track, rather forced into upside-downside arrangements, as the rule has already set out. It’s not imperative that CMS have a vast majority of ACOs in full-risk arrangements, as the financial benefit of the discount often does not outweigh the financial risk of ACOs incurring substantial losses. ACOs should be able to choose which Enhanced track best suits their projected financials. In a full-risk model with a 2% to 3% discount, ACOs would have to generate savings of 8% or 12%, respectively, to earn savings equivalent to what they would earn in Enhanced. In this way, expecting ACOs to consistently generate net saving upwards of 8% is far-fetched, and they should always have the option to be in non-full-risk arrangements.
Many ACOs are better than in MSSP than ACO REACH
In setting the financial structure of higher risk track in MSSP, we must consider both CMS and participants. Striking this balance keeps participants in the program and delivers savings to the Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) Trust funds. Using a discount, or guaranteeing CMS ~2-6% of the benchmark upfront, is a sustainable way of guaranteeing savings to CMS and offering ACOs greater potential upside, along with giving participants the ability to recognize premiums as revenue.
One option is to set the discount at 3%, meaning that ACOs will have to achieve a savings rate of 12% to make this track attractive. In order to make this track more attractive to CMS, they should limit the upside potential or tighten the risk corridors, which will in turn ensure that more ACOs are concordant (meaning they both generate shared savings and spending decrease OR generate shared losses and spending increases).
REACH ACOs in PY2022 per this NORC Report
Another option would be to set a discount that depends on the performance of all ACOs. As NAACOS lays out, “set the discount to max out at half of the average shared savings earned for all of MSSP. For example, MSSP averaged 5% savings in one year, the discount would top out at 2.5% for the next year. This would incentivize high performance and continuous savings without punishing ACOs who generate greater savings.”
Additionally, MSSP should allow high performing REACH ACOs transferring into MSSP to receive pre-paid shared saving, according to MSSP’s methodology. This inclusion will encourage REACH entities to transfer into REACH without loosing the capitation they previous received in REACH.
There are a number of other non-financial benefits that CMS can offer ACOs in moving up the glide path. I have discussed many of them in the Reforming MSSP piece but will note the use of additional waivers as an incentive here. Offering waivers, such as Part B Cost Sharing and In-Kind Items and Services, will encourage ACOs to take on greater amounts of risk, while delivering unique benefits to their patient population.