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Medicare looks to significantly change providers' shared savings program

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Medicare looks to significantly change providers' shared savings program

The U.S. Centers for Medicare and Medicaid Services is looking to eliminate two tracks in the accountable care organization shared savings program that allows ACOs to assume zero or low upside risk.

Accountable care organizations are groups of doctors, hospitals, and other healthcare providers that band together to coordinate services and avoid unnecessary treatment that can drive up spending for Medicare patients without increasing quality. If that coordination results in lower spending, ACOs share those savings with Medicare.

The agency's proposal lays out a plan to remove Tracks I and II of the shared savings program, which are the zero and low-risk tracks. Both tracks allow ACOs to save money for keeping their costs low. However, ACOs that are on the zero risk track do not have to make payments for rising costs and ACOs in the low-risk track have to make payments for rising costs but at a smaller rate than Track III.

The proposed rule released Aug. 9 would eliminate the first two tracks. It would also rename Track III the ENHANCED track and add a BASIC track. Both of the new tracks would involve a five-year commitment to participate in the program.

Under the BASIC track, ACOs would continue to save money for keeping costs low, but would only be allowed to avoid having to make payments for rising costs for up to two years. After the first two years, they would transition over the next three years to assume more and more risk.

The ENHANCED track would be one five-year program that would begin by assuming the highest amount of risk immediately.

CMS estimates that Medicare would be saving $2.2 billion over 10 years with this proposed rule.

According to CMS, 561 ACOs and 10.5 million beneficiaries currently participate in the ACO shared savings program.