The Trump administration is overhauling an Obamacare program officials say is losing, instead of saving, federal dollars.
The Centers for Medicare & Medicaid Services released on Thursday new regulations that will squeeze accountable care organizations, which are groups of healthcare providers, forcing them to take on more risk. Administration officials said the Obamacare program is losing money.
“We can no longer continue to run a program that was losing money for taxpayers,” said CMS Administrator Seema Verma, speaking on a call with reporters on Thursday.
An ACO agrees to pay the federal government if healthcare costs paid by Medicare go over a certain threshold. But if the Medicare costs are under that threshold, the ACO gets some of the savings.
Currently, an ACO can be in the program for six years and not have to pay anything if they don’t meet the savings target. However, they would still get a portion of the savings below that target, and they also get waivers for regulatory relief.
The new regulation would only allow an ACO to be in the program for two years and not pay anything. After that second year, an ACO will be on the hook for any costs above the target.
Verma said that the goal is to get more ACOs to take on risk.
“We know that when providers are taking on risk they are gonna generate savings,” she told reporters.
CMS said that of the 561 ACOs in the program, 460 (82 percent) are not taking any risk for increases in healthcare costs.
“Data on ACO performance to date has shown that ACOs that are not at risk for cost increases end up increasing Medicare spending in aggregate,” the agency said.
But CMS did not give a total number on how much ACOs have cost Medicare over the six years they have been in existence.
Verma estimates the change will save around $2 billion for Medicare over the next decade.
But the changes could result in ACOs leaving the program altogether.
A survey from the National Association of ACOs talked with 82 ACOs that have been in the program for two years and haven’t had to take on any risk. The survey found that 71 percent of the ACOs would likely leave the program if they had to take on risk.
The association said in a statement Thursday that the move will lead to a slew of unintended consequences.
“The administration’s proposed changes to the ACO program will halt transformation to a higher quality,
more affordable, patient-centered health care industry, stunting efforts to improve and coordinate care for
millions of Medicare beneficiaries,” said NAACOS President and CEO Clif Gaus.
