Building On CMS's Accountable Care Vision To Improve Care For Medicare Beneficiaries

Editor’s Note

This article is the latest in the Health Affairs Forefront series, Accountable Care for Population Health, featuring analysis and discussion of how to understand, design, support, and measure patient-centered, cost-efficient care under the umbrella of accountable care. Additional articles will be published throughout 2023. Readers are encouraged to review the Call for Submissions for this series. We are grateful to Arnold Ventures for their support of this work.

In 2021, the Centers for Medicare and Medicaid Services (CMS) affirmed the importance of accountable care to achieving its goals of advancing health equity, supporting high-quality, person-centered care, and promoting affordability and sustainability in Medicare. CMS set a bold goal of having 100 percent of people with traditional Medicare in accountable care relationships with providers who are responsible for the quality and total costs of their care by 2030. Accountable care means that a doctor, group of health care providers, or hospitals take responsibility for improving quality of care, care coordination, and health outcomes for a defined group of patients based on a series of population-based metrics and cost based on a financial benchmark, thereby reducing care fragmentation and unnecessary costs for patients and the health system. Accountable care organizations (ACOs) are a main way to facilitate these relationships.

Over the past decade, CMS has operated the Medicare Shared Savings Program (Shared Savings Program), the largest accountable care program in the country, and launched several ACO model tests through the Innovation Center. To drive alignment across the Shared Saving Program and Innovation Center models and in support of its accountable care goals, in April 2022, CMS released an aligned Medicare-wide ACO vision to describe a path to grow the number of ACOs participating in these initiatives and advance equity through the delivery of person-centered care to Medicare beneficiaries.

The unified framework to support alignment, growth, and equity guided significant changes to ACO Realizing Equity, Access, and Community Health (ACO REACH) and the Shared Savings Program in 2022. The redesigned ACO REACH model launched on January 1, 2023, with financial, health equity, and patient and provider-focused changes, and CMS finalized some of the most important changes to the Shared Savings Program since the program’s inception more than a decade ago. This Forefront article describes progress to date in the CMS accountable care strategy and outlines areas that CMS is exploring in 2023 to accelerate the growth of and access to ACOs that can support improved care experience and quality for beneficiaries, especially those in rural and underserved areas.

Alignment

In 2022, CMS articulated the vision to use the Shared Savings Program as a chassis for care transformation by aligning testing of ACO models and features with the Shared Savings Program. One example is the Advance Investment Payment (AIP) option that was finalized in the calendar year (CY) 2023 Medicare Physician Fee Schedule rule. AIP includes payments that are up-front investment dollars for new, smaller, and inexperienced ACOs particularly in rural and other underserved areas that can be used to support staffing, infrastructure, and address the social needs of Medicare beneficiaries. The implementation of AIP is intended to scale the Innovation Center ACO Investment Model and illustrates how successful Innovation Center model features can be incorporated permanently into the Shared Savings Program. The AIP option is expected to drive growth in ACOs and advance health equity, particularly in rural and undeserved areas, by bringing accountable care to more beneficiaries and supporting health care providers in delivering more coordinated, person-centered care. On April 10, 2023, CMS posted an AIP application toolkit for providers interested in becoming an ACO. With payments set to begin on January 1, 2024, successful implementation of the AIP is a core focus in the Shared Savings Program for 2023.

CMS is also examining ways to create new ACO opportunities. Evidence indicates that a higher rate of primary care providers in ACOs is a critical factor of successful ACOs, with ACOs composed of 75 percent or more primary care clinicians sharing in savings at almost twice the rate of those ACOs composed of fewer than 75 percent primary care clinicians ($281 per capita compared to $149 per capita). However, challenges remain for primary care providers in ACOs, including continued underinvestment in primary care and continued fee-for-service payments that keep practices dependent on patient volume and impede delivery of advanced primary care. These lead to unstable revenue that makes long-term investments in care delivery difficult, as seen during the pandemic. The Innovation Center is thus exploring testing models and features to support Shared Savings Program ACOs in increasing investments in primary care services. This could include ACO-based primary care model tests that provide prospective payments that reduce reliance on fee-for-service and that support innovations in care delivery that meet beneficiary needs and increase access to advanced primary care in underserved communities.

The CY 2024 proposed Medicare Physician Fee Schedule rule builds on progress from the CY 2023 rule. It includes technical updates to AIP and a request for information on considerations for adding higher-risk participation options in the Shared Savings Program in the future that could build on learnings from the ACO REACH and previous Innovation Center ACO models. CMS will use feedback from this request to inform future rulemaking.

Growth

CMS also finalized several other provisions in 2022 to encourage growth in the Shared Savings Program. First, CMS finalized the new Accountable Care Prospective Trend (ACPT) to incorporate into financial benchmarks for Shared Savings Program ACOs. The ACPT is a type of prospective or “administrative” trend to support growth in ACO participation and improve the sustainability of long-term participation in the Shared Savings Program. Administrative trends and benchmarks can create incentives for ACOs with higher-risk populations to join the program and to address longstanding challenges with the “ratchet” effect, whereby ACOs successful at lowering the total cost of care would be met with progressively lowered benchmarks in the future, making it harder to achieve success in the program, and potentially leading to attrition. CMS also finalized an additional policy to address the ratchet effect to incorporate a prior savings adjustment, which will hopefully maintain incentives for ACOs to succeed and remain in the program. Third, historically, there has been a negative adjustment to an ACO’s benchmark if an ACO is less efficient than the region in which it operates, which has discouraged less efficient ACOs from participating. As a result, CMS finalized a policy reducing this negative regional adjustment. Finally, the Shared Savings Program is also implementing changes that will allow new, inexperienced ACOs to be in an upside-only risk level for an entire five-year contract cycle (meaning they would share in savings but would not face the risk of sharing in losses). This change is in response to feedback that providers caring for rural or underserved populations are unable to quickly adopt downside risk. Taken together with the implementation of AIP, these changes are expected to increase growth in the Shared Savings Program with three million to four million additional beneficiaries per year being served by ACOs.

Growing accountable care also means increasing access to coordinated and integrated specialty care. In November 2022, the Innovation Center released a four-prong specialty strategy informed by interviews with health policy experts, providers, and health systems. A central finding from these discussions was the need for data sharing across settings to facilitate specialty integration with primary care. The Innovation Center is exploring providing CMS-generated standardized episode data, also referred to as shadow bundles, and is soliciting input from ACOs on how these data could help them assess specialty care patterns to better manage beneficiary needs and manage costs. Providing standardized episode data and other specialty care data to ACOs in the Shared Savings Program and REACH ACOs could help them establish their own episode-based payment programs and inform provider contracting to better integrate primary and specialty care.

The start of 2023 saw growth in the number of ACOs participating in CMS’s accountable care initiatives, in part due to the start of the redesigned ACO REACH model. More than 588 ACOs with more than 700,000 participating health care providers and organizations are serving more than 13.2 million beneficiaries, with additional growth expected as finalized policies go into effect. In the 2024 Physician Fee Schedule, CMS is continuing to pursue policies to grow ACO participation, particularly in underserved areas. For example, the rule includes newly proposed policies to go further and eliminate the negative regional adjustment and increase the number of patients aligned to ACOs who see nurse practitioners, physician assistants, and clinical nurse specialists. Proposed policies in the 2024 Physician Fee Schedule would be expected to increase participation by 10 percent to 20 percent, if finalized. CMS is also seeking comments on financial benchmark policies to further encourage ACO growth, such as additional prior savings adjustments, additional changes to regional adjustments, and future refinements to the ACPT.

Health Equity

Health equity is the first pillar of CMS’s strategic plan—and ACOs are an important mechanism to reach more underserved populations and close disparities in access to care and outcomes. Elements of the AIP promote equity—in that the payments increase based on the proportion of underserved persons aligned to the ACO and can be used to address the social needs of Medicare beneficiaries. The Shared Savings Program is also implementing a health equity adjustment to ACO quality scores to reward excellent care delivered to underserved populations, including patients who are dually eligible, receiving low-income subsidies for Medicare Part D, and residing in areas with high levels of deprivation as measured by the Area Deprivation Index (ADI).  In the CY 2024 proposed Medicare Physician Fee Schedule, CMS is proposing policies to facilitate quality reporting in the Shared Savings Program as a step toward the Universal Foundation of quality metrics in 2025, which is a core set of measures that will apply to as many quality rating and value-based programs as possible across CMS. Adoption of the Universal Foundation would better enable providing stratified reports by patient characteristics, promote social determinants of health screening, and apply the health equity adjustment across additional measures. CMS is also requesting comments on ways to better support collaboration between ACOs and community-based organizations to meet health-related social needs.

Safety-net providers are critical to advancing health equity and reaching more beneficiaries through CMS’s ACO initiatives. ACO REACH and the Shared Savings Program have seen a significant increase in ACO participation amongst critical access hospitals, federally qualified health centers, and rural health centers. In 2023, there are 824 of these participating safety-net providers in ACO REACH—more than twice as many as 2022—as finalized policies are especially focused on growth in rural and underserved areas. Under the Shared Savings Program, in 2023, there are 7,116 participating safety net providers—a 23 percent increase over 2022. In 2023, ACO REACH is implementing a first-of-its-kind health equity benchmark adjustment (HEBA) to support care delivery and coordination for beneficiaries in underserved communities. The Innovation Center will work with model participants to understand the impacts of this adjustment on access to ACOs in underserved communities—and will continue to refine the methodology.

ACO REACH is currently testing the use of the Area Deprivation Index (ADI) and dual eligibility status to better account for social risk at both an individual and community level. CMS will explore other indices, such as eligibility for the Part D Low Income Subsidy and adjustments to the ADI that account for local cost of living. CMS will consider scaling successful features into the Shared Savings Program as learnings from the HEBA and other health equity features from ACO REACH become available.

Conclusion

CMS is committed to advancing accountable care in a way that demonstrates improvement in quality, outcomes, and the care experience of beneficiaries, and that supports care delivery redesign for physician practices. CMS is focused on achieving its goals through implementation of the finalized 2023 policies in the Shared Savings Program, successful implementation of ACO REACH, and exploring the next phase of its accountable care strategy of alignment, growth, and equity. The vision articulated in 2022 will continue to guide regular policy updates, scale important learnings to improve beneficiary care, and create new model tests that can strengthen access to high-quality, integrated, and coordinated care for beneficiaries—so that by 2030, 100 percent of traditional Medicare beneficiaries are in accountable care relationships where they experience coordinated, whole-person care.