As COVID-19 Costs Rise, Jittery Shared Savings ACOs Could Flee the Model

Almost 80% of Medicare risk-bearing ACOs said they were "very concerned" about their financial performance this year.

More than half of accountable care organizations in Medicare's Shared Savings Program say they'll likely leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic.

That's according to a new online survey conducted this month by the National Association of Accountable Care Organizations, which asked 2020 Medicare Shared Savings Program and Next Generation ACO Model participants across the nation to gauge their experience in handling the ongoing pandemic.

Almost 80% of the 225 ACOs that responded to the five-question survey, conducted between April 3-8, said they were "very concerned" about their financial performance this year.

Further, 56% of respondents they would leave the payment model, including 21% who said they were "very likely," 14% who were "likely" and 21% who said they were "somewhat likely."

"When ACOs made a commitment to assume risk, they didn't expect they'd be handling the risk of a global pandemic," said NAACOS President and CEO Clif Gaus.

"Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31," he said. "Medicare's decade-long effort to change how we pay for health care to better reward quality and outcomes may be lost unless Washington acts quickly to throw these providers a lifeline."

In mid-March, NAACOS cosigned a letter with the American Hospital Association, the American College of Physicians, and seven other stakeholder organizations, asking the Centers for Medicare & Medicaid Services to hold harmless Shared Savings participants from performance-related penalties for 2020. CMS has yet to respond.

 "CMS has yet to adequately mitigate the costs and disruptions of the pandemic," Gaus said. "ACOs are telling us that they will leave the program unless there is protection from the losses of the pandemic, and it would be a tragedy for millions of Medicare beneficiaries to lose the access to care coordination and quality improvement that ACOs offer."

NAACOS estimates that the COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year. A separate study released last week by America's Health Insurance Plans estimated the cost of the pandemic for the nation's healthcare system at between $56 billion and $556 billion

Because of the pandemic, about 25% of ACOs said they expect spending to increase by more than 10%, another 25% say they expected spending to increase between 5% and 10%, while 10% said they expect spending to remain the same or fall, and 37% said they "don’t know."