CMS unveils Medicare-Medicaid ACO model

The CMS will enlist states in a new experiment allowing Medicare accountable care organizations to also manage Medicaid costs for patients who are enrolled in both programs.

The new model builds on the Medicare Shared Savings Program, in which Medicare ACOs that hit spending and quality targets are able to share in savings with the CMS. But those ACOs often don’t consider Medicaid savings, even when beneficiaries are enrolled in both Medicare and Medicaid programs. Such dual-eligible patients often are higher risk and have more expensive health costs.

The CMS intends to enter agreements with as many as six states, with preference given to states with low saturation of providers already participating in a Medicare ACO program. Participating states will be able to design certain parts of how they implement the model.

As of April, there were 433 ACOs in the program covering 7.7 million patients. Only a few of the participating ACOs are in tracks that carry the risk of losing money if they fail to control costs. Next year, the program’s cost benchmarks will take into account regional spending factors. The change was a response to complaints that highly efficient providers were at a disadvantage because their performance was measured against their own past results.

The CMS last week also announced more opportunities for clinicians to join advanced alternative payment models to earn incentives under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA.

In January and February, the CMS will begin accepting applications for new practices and payers in the Comprehensive Primary Care Plus model and new participants in the Next Generation ACO model for 2018.

The agency expects that by 2018, a quarter of clinicians subject to MACRA’s quality incentive program will participate in these advanced payment models, which require participants to take on substantial downside financial risk.