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The question of whether ACOs should be forced to accept “downside risk” — in effect pay a penalty if they exceed certain spending benchmarks — has bedeviled CMS’ ACO programs and ACO programs in general. Seema Verma, the Trump administration’s CMS director, pushed for more downside risk, and the administration’s Pathway to Success program shortened the period during which ACOs in Medicare’s main ACOS could earn bonuses— “upside risk” — without also assuming the possibility of downside risk. Verma and others have argued that without downside risk, there isn’t enough of an incentive for ACOs to drive down spending while maintaining the quality of care=.
But researchers who report findings in this month’s issue of Health Affairs about a special program for smaller ACOs in rural areas argue that forcing downside risk after several years of participation is counterproductive, leading to the exit of ACOs and a missed chance for large savings for Medicare for the program.