Accountable Care Organizations (ACOs) are becoming an important source of palliative care reimbursement, and a recently proposed rule from the U.S. Centers for Medicare & Medicaid Services (CMS) could potentially increase their number.
CMS has announced plans to ensure that 100% of Medicare beneficiaries become aligned with an accountable care entity by 2030, a goal that could expand reimbursement potential for palliative care providers.
The agency included a number of provisions in its proposed physician fee schedule for 2024 that, if finalized, could encourage the growth of current and new ACOs, including within the Medicare Shared Savings Program (MSSP), according to the National Association of ACOs (NAACOS).
“CMS is putting action behind its goal set last year to have all Medicare patients in a relationship with a provider accountable for their quality and total cost of care by 2030,” NAACOS President and CEO Clif Gaus said in a statement shared with Hospice News. “These changes will certainly help reach their goal and improve our health system by growing the footprint of ACOs. Since 2018, ACO growth has been flat, but improvements made by CMS will reverse that trend. We encourage CMS to finalize this rule with some modifications”
If finalized, the rule would make certain new ACOs eligible for advanced payments to cover some startup costs.
Additionally, ACOs would be able to ramp up gradually to higher levels of risk. CMS also proposed to remove the “pass/fail” approach to ACO quality scoring and return to a sliding scale that’s applied to shared savings.
This would create greater opportunities to achieve shared savings, according to NAACOS.
NAACOS represents more than 400 ACOs that serve roughly 13 million beneficiaries through a variety of value-based payment and delivery models in Medicare, Medicaid and commercial insurers. Its ACO members participate in (MSSP) and the ACO Realizing Equity, Access, and Community Health (REACH) model, among others.
Through its annual physician fee schedule rule, Medicare establishes payment for the services of physicians and other professionals — including palliative care — provided in physician offices, hospitals, ambulatory surgical centers, clinical laboratories, skilled nursing facilities, hospices, outpatient dialysis facilities, patient homes and other post-acute care settings.
CMS’ proposed changes to the rule included payment rate revisions, changes to Medicare Part B payment policies and updates to MSSP requirements and the Quality Payment Program, among others.
Along with Medicare Advantage, ACO relationships represent one of the few pathways to reimbursement for palliative care providers, beyond the physician services covered under Part B. Operators have the option to become members of an ACO themselves, or they can contract with those organizations through a preferred provider network.
In preferred provider arrangements, the two parties can negotiate mutually beneficial terms that are customized to the needs and characteristics of their patient population. These contracts can involve shared-savings arrangements in which providers can receive a portion of the dollar amount of any health care cost reductions.
Other proposed updates in the physician fee schedule include basing capitation risk score on national averages set by ACOs across the country. This methodology could skew results around cost savings and quality outcomes, according to NAACOS.
Because Medicare spending varies by region, a national benchmark could end up hurting about one-third of ACOs, the organization’s statement indicated.
“An ACOs’ success can’t be decided simply by its geography. Instead, CMS should use a regional update factor on which to base administrative benchmarks,” Gaus said. “We greatly appreciate CMS’s efforts to address the ‘ratchet effect’ and look forward to continued collaboration with the Agency to determine best approaches for administratively set benchmarks.”
