John asks: “I am a primary care provider and have participated in a local ACO for the last two years. This year the ACO terminated our participation agreement, citing my failure to hit benchmarks. I’ve worked hard to contribute data, hit quality score targets, and to reach out to patients they have told me need more aggressive outreach. What does this mean for me in the future, especially in light of Medicare’s plan to have everyone in an ACO by 2030?”

Great question, John.

It’s hard to feel rejected by the local healthcare community.

I think we are going to see a lot more of this as Medicare shepherds us through the Quality Payment Program (QPP) and succeeds at advancing ACOs.

This suggests a number of topics for your consideration.

  • Medicare’s goal of all beneficiaries in an accountable relationship by 2030
  • Your specific options to care for Medicare Patients
  • The expected annual churn in ACO participation
  • Your options

For years now, Medicare has consistently reiterated the strategic goal to have all Medicare beneficiaries in an accountable health care relationship by 2030.

The first thing to recognize is that this is a goal, not a requirement.

And it is certainly not a legislated requirement.

Medicare is likely to fail in this target. Success is more likely to be represented as some large, measured portion of the Medicare Beneficiary population being in an accountable care relationship rather than hitting the 100% mark.

Part of achieving success may be in defining the concept of “accountable health care.”

When you think about accountable care, it’s natural to think about Accountable Care Organizations (ACOs). And it’s natural as well to think about the Medicare Shared Saving Program (MSSP), which is the most widely available, most widely used Accountable Care Organization model.

But accountable care relationships are not exclusive to models with “Accountable Care Organization” in the name.

Accountable means that the health care provider is held accountable, usually in a payment differential, for the quality and cost of care.

You have a number of options to be an accountable healthcare provider.

The local ACO is just one of the options open to each provider for participation.

Let’s break it down by Medicare beneficiaries.

In 2024, there are about 67 million Medicare beneficiaries.

Of the 67 million Medicare beneficiaries, 11 million are attributed to Medicare Shared Savings Program (MSSP) ACOs. I think that we all agree that these are accountable health care relationships.

32 million of the 67 million Medicare beneficiaries are enrolled in Medicare Advantage Plans.

Medicare Advantage fits the definition of an accountable healthcare relationship. They are subject to quality measurement and public display of relative scores. They benefit financially by generating savings in the cost of care.

7 million of the 67 million are in other Alternative Payment Models operated by the Center for Medicare and Medicaid Innovations (the CMMI). These models are all accountable care models. Each of them has a reward built in for differential payment based on favorable cost and quality measurements.

Of the other 28 million Medicare beneficiaries, many or most are seen by providers subject to the Merit Based Incentive Payment Program (MIPS). By providing differential payment (the MIPS reimbursement adjustment) based on measures of quality and cost of care, beneficiaries seen by MIPS-subject providers are in an accountable care relationship.

In any particular year, Medicare may or may not include all of these programs in their tally of accountable care relationships. But there will be a perceived marketing value that drives that year-to-year decision.

Now, what about the topic of Churn in ACOs?

  • Churn is the dynamic we will continue to see that providers join and leave ACOs regularly.
  • It could be the choice of the ACO, deliberately rejecting some providers and pursuing others in an effort to meet their quality and cost targets.
  • It could be the choice of providers, deliberately rejecting an ACO or pursuing another in an effort to get more financial benefit for the panel of patients the practice serves and range of services the practice offers.
  • And it may often be a mutual choice.

ACOs differ widely in operations and strategy. How much money do they keep and how do they distribute the rest when there is gain? How do they cover and distribute losses when they exist? What resources do they provide and how effective are those resources to grow value?

There may be only one ACO operating in your market today, but I expect to see competing programs more often as this work progresses.

Finally, let’s discuss your options.

You should critically examine the organizational options available to you. Continuously evaluate the relationship with ACOs. Be ready to join or leave. Be ousted or pursued.

  • There is likely to be one ACO in your region. But they are not universal, yet.
  • If there is not yet, there is likely in the future to be more than one ACO in your region.
  • Other organizations can provide structure, and valuable resources:
    • Most communities are built around one or more hospitals.
      • Where there is at least one hospital there is likely to be one or more Physician Hospital Organizations (PHO).
    • Independent Practice Associations (IPA) can be an Important source of resources and guidance.
    • The boundaries blur between these organizations.

You are not just subject to their plans, you can avoid, pursue, join, or leave as you see best serves your practice and your patients.

You don’t need to accept rejection as a permanent condition. It’s going to be a work-in-progress, subject to regular re-evaluation.

If you are on the outs when you want to be in, you don’t need to quietly and permanently accept the current situation. Some tips:

  • Keep track of the goals of the organizations you might want to be part of.
  • Build your value management program around the priorities of those organizations.
  • As an independent practice, not in an alternative payment model, you cannot submit the APM Performance Pathway, but you can align your MIPS measure choices around the APP panel of measures.
    • It will be easier to join or rejoin an ACO showing you will help or not hurt their quality scores.
  • You can make an effort to contain costs:
    • Ideally, you can access detailed measures of your cost of care and address those that are measurably higher than at comparable practices.
    • If you can’t get quantitative comparable data, you can still do a qualitative analysis and make some smart choices.
    • Track your most common and your most costly referrals out.
  • And you can deliberately choose your consultants. Don’t let it be a random process.
  • Use Medicare’s Care Compare website to choose between regional options based on comparable data on cost and quality.
  • Meet regularly with your referral partners to logically review the care model and mutual expectations of quality improvement and cost containment efforts.