The Trump administration is proposing to restrict an innovation in the Affordable Care Act that was intended to improve Medicare and slow spending in the vast federal insurance system for older Americans. Health-care researchers have hailed the model’s promise to improve quality and efficiency, but government data suggest it is not saving enough money.
The changes, announced Thursday by the administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, would significantly curtail Accountable Care Organizations. The ACOs can be teams of doctors, hospitals or other providers who become responsible for all the health-care needs of a specific group of patients.
Under the ACA, these teams have choices about their financial arrangements with the government. They can either collect bonuses if they provide better care at lower cost than the regular Medicare program, or they can collect greater amounts if they also are willing to accept the risk of owing money in case they end up overspending.
More than 80 percent of 561 teams in this Medicare Savings Program are using the bonus-only version, with more than 300,000 clinicians and 10 million patients taking part. Now, federal health officials want to limit such teams, saying federal data show that this version has ended up costing Medicare extra money.
Until now, ACOs have been allowed six years in which they can take part without assuming responsibility for potential losses. The proposed rule changes would limit that to two years.
“We believe the time has come to put accountability into the Accountable Care Organizations,” CMS Administrator Seema Verma said Thursday in a conference call with journalists. She said it was “a shocking reality” that four-fifths of these teams have been unwilling to shoulder financial risk in the program so far.
Verma repeatedly dodged questions about how the change would influence the number of ACOs participating in Medicare.
But a 607-page proposal in the Federal Register predicts that 109 fewer such organizations would be part of Medicare within a decade. And according to CMS figures, nearly 300 ACOs have already been in the bonus-only version of the program for two or more years — so would have to switch or drop out after a six-month grace period next year that CMS envisions.
Among some health-care researchers, this version of managed care, run by physicians or hospitals instead of insurers, have been held out as a bright light for improving both the quality and efficiency of the United States’ notoriously expensive health-care system. The government conducted early experiments before the ACA was passed in 2010, with mixed results.
In 2012, an expansion of Medicare ACOs became one of the first broad changes to the delivery of care to flow from the sprawling — and politically polarizing — law.
In an interview Thursday, Donald M. Berwick, who led CMS during part of the Obama administration, said, “ACOs are a really important component of a fleet of major experiments this country is doing to shift” the payment of medical services from how much is delivered to the value of the care. But he added, “it’s a fragile experiment” and that changes that lead to “a chilling of interest” in teams participating “may be the wrong direction.”
Clif Gaus, president of the National Association of ACOs, said the proposal “is really upending . . . a program that is showing savings and huge quality improvements.” Gaus said that CMS’s forecast significantly understates how many would drop out, saying that a recent survey of its members showed that 70 percent would leave Medicare.
“That’s the disaster,” he said.
Under current rules, ACOs tell patients at the end of a year that their primary-care doctor is part of such a team. Verma said that the new rules also would require patients to be sent written notices, but not before choosing a physician.