CMS Considers Letting ACOs Merge With Part D Plans, Medicaid; Accept Capitated Pay

CMS is considering letting accountable care organizations combine with drug plans and Medicaid and accept global payments, CMS innovation center head Patrick Conway said Tuesday (Sept. 30). The agency plans to soon request input from the public on plan designs for CMS to test, and that “request for information” will provide an opportunity for plans to suggest changes to ACOs.

The vast majority of ACOs are in the Medicare Shared Savings Program, and the innovation center is only in charge of the some 19 Pioneer ACOs that are being tested in a separate demonstration. But ACOs are viewed by the agency as a single initiative and they share important aspects, and Conway said he is in close contact with those running the ACO program.

Drug spending currently is not included in ACO spending benchmarks, but Conway said he is interested in the relationships between ACOs and Part D plans.

ACOs are based on fee-for-service Medicare, but he said CMS may want to test more aggressive reforms, such as paying ACOs a set amount per beneficiary, “ultimately moving ACOs to more population-based payments,” Conway said. Both parties in Congress also are interested in capitated ACOs.

He said some providers say they want to compete against their own baseline and receive a population-based payment.

“We’re trying to think about how we would set up ACOs that would partner with Part D plans,” he said. “Also, there are some ACOs that have background in health plans that want to take on full risk.”

Conway said he expects CMS soon to issue a request for information on plan designs, which would apply to plans in all Medicare programs. Industry could use that request to suggest changes to the ACO initiative, as well.

Contracts for the first ACOs in the Medicare Shared Savings Program run through 2015, and they must decide whether to sign the second three-year contracts in the latter half of next year. Many ACOs say they'll drop out of the program unless CMS changes the rules significantly. ACOs want to keep the option of a one-sided risk model, they want to know which patients they're judged on, and they want bigger bonuses and lower savings thresholds, among other changes. CMS drafted a proposal to change the rules, but the White House Office of Management and Budget rejected it.

Conway’s innovation center separately is testing what it calls pioneer ACOs in a demonstration. The Wall Street Journal recently reported that four more ACOs dropped out of demo. Only 19 pioneer ACOs remain, according to the report. -- John Wilkerson (jwilkerson@iwpnews.com)