The Medicare Shared Savings Program has hit a few bumps in its second year, with some accountable care organization participants failing to hit their targets. The feds hope that new rules, proposed earlier this month, will help to build momentum in the accountable care movement, but others — such as the American Hospital Association — are concerned that the changes don’t go far enough.

Some 80 percent of participants in the program reportedly lost money because of the high cost of operations. With that in mind, a recent survey by the National Association of ACOs found that two-thirds of participants in the Medicare Shared Savings are "highly" or "somewhat" unlikely to remain in the ACO program. Only about 8 percent of survey respondents said they were likely to sign a second contract.

CMS is aiming to flip those numbers with proposed tweaks, including giving more flexibility to those who want to renew their contracts, encouraging ACOs to take on more performance-based risk, placing a greater emphasis on primary care, and streamlining data-sharing. You can read the particulars of the new rules in this press release.

We recently spent a few minutes with Ashley Thompson, vice president and deputy director of the American Hospital Association, to discuss what the proposal means for the field. The AHA plans to release a more detailed analysis of the rule before the year’s end. While there are some positives — including allowing participants to stay in Track 1, which doesn’t involve downside risk and is where about 98 percent of participants take part — CMS still has a way to go, Thompson says. Of particular consternation is the proposal to decrease the amount of shared savings by 10 percentage points.

"They really didn't go far enough in this regulation," she says. "The proposed changes are insufficient to encourage widespread adoption of the program, and we're not pleased they are proposing a lower sharing rate from 50 percent to 40 percent. If anything, they may be moving in the wrong direction."

Those who have feedback on the rule can reach out to the AHA at There will be a 60-day comment period, ending Feb. 6, and the final rule is expected sometime in the summer of 2015.
What’s your overall assessment of the proposed rule?
THOMPSON: We’re pleased that the proposal allows organizations that have been participating in the program under Track 1 the ability to continue in that track. That’s important because Track 1 doesn’t have any downside risk. Previously, CMS said that after three years in track 1, ACOs would have to move to Track 2, which does have downside risk. About 98 percent of all participating ACOs are in track 1. Only five are in Track 2. So, if they had eliminated the opportunity for members to continue with Track 1, we think that many ACOs would leave the program because they aren’t confident about Track 2. The second positive is a proposed Track 3, which has increased opportunity for risk and reward. It also allows for beneficiaries to be assigned prospectively, which means that the ACO will actually know which patients are in that ACO for that contract year. That really helps in identifying who you need to manage better to achieve the desired results of the program.

Are there any key things that the AHA and its members who are part of ACOs were hoping to see that weren’t addressed?
THOMPSON: There are a number of barriers that they haven’t addressed in this regulation. AHA sent CMS a comment letter in April, urging them to make a number of changes, and while they’ve done a couple of them, they really didn’t go far enough in the rule to make the program desirable, and it appears right now that they place too much risk and burden on the providers, with too little opportunity for reward in the form of shared savings for members.

As constituted, do you think these rules will help to keep current hospital participants in the program, and attract new ones?
THOMPSON: I do. I think we’re more anxious for the final rules rather than the proposed rules. We’re pleased that CMS did hear the field and will allow individuals to continue under that one-sided Track 1 model. That should keep a number of players in the ACO marketplace. We question right now how many ACOs will move into Track 2 and Track 3 as currently written, but when the final rules come out, there might be changes to those two-sided, risk-sharing models that will be beneficial and allow more hospitals and other ACO providers to enter.

How would you characterize the hospital field’s feelings toward this program and ACOs in general? Does enthusiasm still exist? 
THOMPSON: I think that many of our members are looking at ACOs as one of many ways to gain experience in taking risk for a population. In moving toward the ACO infrastructure, they’re working more closely with their physicians; they might be developing joint IT platforms; they are working on care coordination; they are really moving the dial from keeping patients out of the hospital to doing more prevention and wellness up front, and all of those are skills that hospitals are going to want to achieve to move forward to what we call the second curve, which is continued payment based on value rather than volume of services. And, just like medical homes, bundling, ACOs are another opportunity to do that.

What’s next? What can hospital leaders who are reading this do to get involved and help to fine-tune the program and to help make sure that changes to help maintain momentum in the ACO program?
THOMPSON: The field has done a lot to date, which you can see from CMS’s proposed rule. CMS really took the experience that they have gained through the program over the first couple of years, all the feedback that they have received from ACOs in the program, and really did make a number of tweaks to it. Many of them are beneficial. They relieve a lot of the burden. They’re getting better with providing data to individuals. So, CMS did a lot, and I think a lot of that was because of the response from ACOs directly to CMS. If they can continue with their advocacy, especially now that the proposed rule is out, and share their insights and comments with CMS, it should result in a much more attractive program for those who are entering into the 2016 contract year.

Anything else you’d like to add?
THOMPSON: The ACO is a very promising model to improve care and lower costs, but I don’t think that we believe that CMS went far enough in its proposal. They were very good first steps, but we’d really like to see some additional changes to the program and we’ll be submitting our suggestions to CMS by Feb. 6, when comments are due.