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The Case For ACOs: Why Payment Reform Remains Necessary

The Case For ACOs: Why Payment Reform Remains Necessary

January 24, 2022Michael E. Chernew, J. Michael McWilliamsHealth AffairsPatient Engagement & Access,Alternative payment models (APMs)

Medicare population-based payment models, broadly known as accountable care organization (ACO) models, of which the Global and Professional Direct Contracting Model (GPDC) is an example, were launched out of recognition of two largely inherent weaknesses of fee-for-service: FFS does not promote efficiency, nor does it promote equity. The Centers for Medicare and Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI) at CMS are in the midst of redesigning ACO models and developing new ones to maintain a portfolio of models as other, similar models are phased out. The evolution of population-based payment models, particularly the launch of GPDC, has spawned recent controversy, with some calling for a halt to ACO programs. For this reason, it is worth stepping back and reviewing the original motivation for these models and their merits (and challenges). It is important to recognize that any policy option must be viewed relative to an alternative, in this case, the traditional Medicare fee for service (FFS) payment system.

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: ACO, ACOs, FFS, GPDC, value-based care, vbc

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