No Medicaid lifetime limits and a hard stance on ACO risk contracts highlighted CMS head Seema Verma’s talk at the American Hospital Association’s recent annual meeting.
“We’re determined to make sure that Medicaid remains the safety net for those who need it most,” Verma said. “To that end, we have determined we will not approve Kansas’ recent request to place a lifetime limit on Medicaid benefits.” (“Verma draws the line on Medicaid limits, ACO risk contracts,” Modern Healthcare, May 7, 2018)
Healthcare providers have urged CMS to deny Medicaid benefits limits proposed by some states, noting it would significantly increase hospitals’ uncompensated-care costs, as many low-income beneficiaries cycle on and off Medicaid due to unpredictable hours and wages.
ACO Risk Contracts
ACOs that have taken on risk have saved money, but those in upside-only tracks (no risk) appear to be increasing Medicare spending, according to Verma. ACOs that started in the Medicare Shared Savings Program’s Track 1 in either 2012 or 2013 are supposed to move to a risk-based model by their third contract periods, which begin next year.
“The presence of these upside-only tracks may be encouraging consolidation in the marketplace, reducing competition and choice for our beneficiaries,” she said. “While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results.” (“Verma draws the line on Medicaid limits, ACO risk contracts,” Modern Healthcare, May 7, 2018)
A significant majority (82 percent) of Medicare Shared Savings ACOs has enrolled in upside-only tracks. These ACOs say they need more time without risk because Medicare Shared Savings Program regulations have changed considerably since the early years and ACOs are just now operating successfully.
A recent survey by the National Association of ACOs found that many ACOs would quit if they were required to take on risk next year. (“Many Medicare ACOs would quit rather than face risk next year,” Modern Healthcare, May 2, 2018)
Verma’s stance may mean there will be an exodus from Track 1, policy insiders said. One analyst noted the CMS focus on risk would mean a much smaller ACO program that loses less money.
Late last month Verma wrote to the National Association of ACOs that “risk-reticent ACOs move to the newly created Track 1+ which has a lower shared loss rate (30 percent) compared to Tracks 2 and 3. (“Verma draws the line on Medicaid limits, ACO risk contracts,” Modern Healthcare, May 7, 2018)
But an executive at the National Association of ACOs noted provider concerns about moving to Track 1+ because the shared savings rate is not any higher than Track 1. (“Verma draws the line on Medicaid limits, ACO risk contracts,” Modern Healthcare, May 7, 2018)
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