ACOs treating minorities more likely to leave Medicare Shared Savings Program

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Accountable Care Organizations treating a higher percentage of patients in racial and ethnic minority groups are much more likely to exit the Medicare Shared Savings Program (MSSP) than ACOs treating mostly white beneficiaries, according to new research published in JAMA Health Forum.

These ACOs – called “high-proportion” ACOs – also are more likely to care for patients with greater disease severity and complexities. Because of this, authors make the case that an equity-centered approach to policy design is needed to ensure that care delivery models are fairly distributed.

While the MSSP provides financial incentives for ACOs to reduce care costs, “the structure of the shared savings program may not adequately adjust for challenges associated with caring for patients with high medical complexity and social needs, a population disproportionately made up of racial and ethnic minority groups,” according to the findings.

WHAT’S THE IMPACT

Recent payment reform programs have not been designed with racial and ethnic minority groups in mind, the authors said. Before 2017, the spending benchmarks of ACOs were based on their own historical performance. Because of that, ACOs that served a high proportion of beneficiaries of racial and ethnic minority groups had higher benchmarks and were more likely to achieve savings.

But in 2017 – despite simulations suggesting that it would negatively affect ACOs that care for racial and ethnic minority groups – the Centers for Medicare and Medicaid Services began incorporating regional trends into SSP benchmarking calculations without considerations or adjustments for social needs.

As a result, ACOs that care for racial and ethnic minority groups were being directly compared with nearby ACOs that serve more privileged populations.

The following year, in 2018, CMS announced that all ACOs would be required to take on down-side risk on an accelerated timeline, placing additional pressure on SSP ACOs that care for racial and ethnic minority groups. Consequently, SSP ACOs that serve a higher proportion of racial and ethnic minority groups have been more likely to exit.

Between 2012 and 2018, 55 high-proportion ACOs (40%) earned shared savings in their penultimate year compared with 117 low-proportion ACOs (26%). Earned shared savings rates varied by study year. High-proportion ACOs were more likely to earn shared savings in all study years, and this difference was statistically significant during the study period.

In that same six-year window, 168 ACOs (29%) in the study exited the SSP; 50 high-proportion ACOs (34%) exited the SSP compared with 118 low-proportion ACOs (27%). The SSP exit rates among high-proportion ACOs increased each year, starting at 1.4% in 2014, peaking at 17.3% in 2017 and dropping to 11.2% in 2018.

By comparison, low-proportion ACOs exit rates started at 0.8% in 2014, peaked at 12.3% in 2016, and dropped to 9.7% in 2018.

The authors said that in addition to assessing the equity effect of recent changes to the SSP, “one supportive policy might be for the CMS to task quality improvement organizations (regional centers that provide technical support to Medicare beneficiaries and clinicians) with identifying additional strategies to support retention among ACOs with a high proportion of beneficiaries of racial and ethnic minority groups.

“Findings could also inform the design and implementation of ACO REACH, a Medicare ACO model that aims to incorporate health equity into benchmarking and other elements of program design,” the research noted.

THE LARGER TREND

The MSSP, by working with ACOs, saved Medicare $1.66 billion in 2021 compared to spending targets, the fifth consecutive year the program has generated overall savings, CMS said in August.

These savings were confirmed by the National Association of ACOs, which found that MSSP collectively saved Medicare $3.6 billion last year – $1.6 billion after accounting for shared savings payments. Of the 475 ACOs, 81% achieved savings to Medicare with 56% achieving shared savings.

Over the past decade, the Shared Savings Program has grown to one of the largest value-based purchasing programs in the country, according to CMS. As of January, Shared Savings Programs include more than 525,000 participating clinicians who provide care to more than 11 million people with Medicare. 

Based on the program’s success, CMS has set a goal that 100% of people with Traditional Medicare will be part of an accountable care relationship by 2030.
 

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