Establishing an ACO requires healthcare organizations to build data analytics tools, enhance information technology and hire care coordinators and additional staff to oversee the venture. These costs vary depending on the size of the ACO, but can range in the millions.

After establishing an ACO, healthcare organizations spend $1.6 million per year on average to maintain the ACO, according to a recent survey from the National Association of ACOs.

Recognizing that ACOs have already made significant financial investments to establish a sustainable value-based payment model, the CMS established a MACRA track that won't harm them financially. Under the MIPS-APM track, physicians and their ACOs aren't liable for any actuarial downside risk.

This is beneficial for ACOs since most aren't yet prepared to move onto riskier models.

Of the 480 participants in the Medicare Shared Savings Program, about 90% remain in Track 1. This popular avenue requires no downside risk for organizations, while the others do.

It's difficult for ACOs to jump from Track 1 to the other ACO models because there "is a big transition gap," said Allison Brennan, vice president of policy at the National Association of ACOs. The other tracks require a significant amount of risk compared to Track 1.

The new CMS model, Track 1+, will likely be a good "stepping stone" for Track 1 ACOs to advance in the program, she said. Track 1+, which is set to begin in 2018, is a two-sided model with less downside risk than the other established tracks.

ACOs will also likely gain more traction under MACRA because they "are very well-positioned," Brennan said.

This alignment with MACRA is seen with the much more lenient reporting the CMS established for Track 1 Medicare ACOs.

Under the MIPS-APM track, physicians are scored under the same four performance categories as MIPS, except cost, known as resource use by the CMS. ACOs don't have to factor in costs because the CMS is already evaluating this metric as part of their participation in the Medicare Shared Savings Program.

In addition, ACOs are given a pass on some of the other performance categories required in MIPS. The ACO receives full credit for improvement activities, which accounts for 20% of the total composite score under the MIPS-APM track. This is because an ACO is already making efforts in value-based payment models such as population health and care coordination.

The quality measures, which account for 50% of the total composite score, are changed to reflect the 15 measures currently evaluated as part of involvement in a Track 1 ACO.

The fourth category — advancing care information — is weighted to reflect the average score of all physicians who are part of the ACO and it makes up 30% of the total composite score under MIPS-APM.

How Medicare ACOs are scored on the third MACRA track

Percentage of composite score

hover to see score details
30%
20%
50%
0%

Advancing care information
Improvement activities
Quality
Resource use
Source: Premier

The MIPS-APM track is appealing for doctors because their ACO will handle the majority of the reporting requirements, said Joe Damore, vice president of population health management at Premier, a healthcare performance improvement company based in Charlotte, N.C.

"When we explain this option to organizations, a lot are deciding" to establish an ACO, Damore said.

Lured by the benefits of the MACRA track, Columbus (Ga.) Regional Health is now creating a Medicare ACO, which will include 150 physicians.

Jim Zacharias, executive director of the hospitals' physician network, said its providers aren't quite prepared to take on downside risk. The hospital has only just begun to venture into value-based payment efforts.

"We can't lose money doing this," Zacharias said. "It's a way for us to dip our toe in the water and get physicians thinking about collaborating together and looking at metrics in their communities."

Organizations have until May 31 to send the CMS a letter of intent to apply for a Medicare ACO.