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NAACOS asks HHS Secretary Becerra to grow Medicare ACO programs

The letter emphasizes the importance of the transition to value and decries policies that hamper that transition.

Jeff Lagasse, Associate Editor

(Photo by John Fedele/Getty Images)(Photo by John Fedele/Getty Images)

The National Association of Accountable Care Organizations (NAACOS) sent a letter on Monday congratulating Xavier Becerra, secretary of the Department of Health and Human Services, on his recent confirmation. The letter also recommends a number of actions to help support accountable care organizations, as well as payment and delivery reform.

To support the ACO movement and promote value-based care, NAACOS recommended to Becerra that HHS should set a national goal to have a majority of traditional Medicare beneficiaries in an ACO by 2025. The agency should also deprioritize the rush to risk and build a population health infrastructure, NAACOS said.

Additionally, said NAACOS, HHS should address the overlap of competing payment models to prioritize total cost-of-care models, strengthen incentives to attract new ACOs and retain existing ones, and provide meaningful funding to build infrastructure necessary to spur innovation and value through expanded advanced payments and grants.


The letter, signed by NAACOS president and CEO Clif Gaus, emphasized the importance of the transition to value and decried "years of policies that have hampered that critical transition."

"The transition to value should not be taken for granted," wrote Gaus. "While much progress has been made in the past decade, this transformation is threatened."

To exemplify this, Gaus cited data released by the Centers for Medicare and Medicaid Services showing that the number of participants in the largest and most successful value-based payment model, the MSSP, reached its lowest level since the Trump administration took office four years ago. 

Currently 477 ACOs are participating in the MSSP, down from a high of 561 in 2018 and the lowest since 480 participated in 2017, during the Trump administration's first year in office.

It didn't help that in December 2018, CMS finalized a rule requiring ACOs to take on downside risk sooner, which meant they faced financial penalties if spending rose above preset spending targets.

Because of COVID-19. CMS gave some relief in a March 30, 2020 interim final rule that forgave losses equal to the percentage of months of the public health emergency.

In contrast to the diminishing number of ACOs, the MSSP has continued to produce greater savings each year and saw its best year yet in 2019, the most recent year for which data is available, NAACOS said. Serving 11.2 million seniors in 2019, the MSSP saved Medicare $2.6 billion and $1.2 billion after accounting for shared savings bonuses and collecting shared loss payments.

The group has requested that HHS reexamine the balance of risk and reward for ACOs to bolster ACO growth, and therefore savings to Medicare. Among those changes, it requested that HHS and CMS reverse certain policies from the 2018 MSSP overhaul, which CMS called the ACO "Pathways to Success."

NAACOS claimed that particular overhaul included provisions it deemed "damaging," such as a cut to the share of savings most ACOs are eligible to keep and a push for ACOs to assume risk too quickly. These policies, said Gaus, "have chilled ACO growth and should be changed."

NAACOS also recommended that HHS focus the value transition on providers, keeping them at the center of payment models instead of implementing programs and policies to attract new players into traditional Medicare.

To make progress on these goals, NAACOS supported specific policy changes, including:

  • adapting ACO and alternative payment model methodologies to account for COVID-19 anomalies. 
  • halting implementation of the Geographic Option of the Direct Contracting Model and improving aspects of the Professional and Global Options to benefit legacy ACOs/providers.
  • improving the MSSP by increasing ACO shared savings rates, fixing key benchmarking and risk adjustment issues, allowing more time before requiring risk, and revisiting recently finalized quality policies. 
  • making permanent the Next Generation ACO Model.
  • providing more timely and complete data to ACOs.


In 2019, 541 accountable care organizations in the MSSP generated $1.19 billion in total net savings to Medicare, the largest annual savings for the program to date, according to then-CMS Administrator Seema Verma in September 2020.

ACOs that took on downside financial risk outperformed ACOs that did not, with net per beneficiary savings of $152 per beneficiary compared to $107 per beneficiary, Verma said at the time.

An April 2020 survey released by the National Association of Accountable Care Organizations found that more than half of healthcare organizations taking financial risk in a Medicare program said they are at least somewhat likely to drop out because of the financial pressure resulting from the COVID-19 pandemic. 

While 30% of accountable care organizations in the MSSP said it was not likely they would drop out, 21% said they were very likely to leave and 14% said they were likely to drop out of the program. Another 21% of ACOs said they were somewhat likely to leave MSSP. Almost 80% of ACOs said they were "very concerned" about their ACO performance.

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