Rob Mechanic Discusses Evolving Opinions of Pathways to Success

Accountable care organizations who have been involved in value-based payment for a while are committed to the new model, explained Rob Mechanic, MBA, senior fellow at the Heller School of Social Policy and Management at Brandeis University and executive director of the Institute for Accountable Care.

Transcript

Now that more time has passed since CMS announced Pathways to Success and the policy has been finalized, do you think opinions have changed on what Pathways might mean for ACO participation?

Administrator Verma was here yesterday, and what she said is of the ACOs that were eligible to sign up for Pathways in July, 90% of the eligible ACOs signed up. What I would say is that ACOs who have been in this game for a while, they’re committed to the model, they’re committed to population health, they’re committed to value-based payment. So, I think most of them are going to try and stick with the program. One of the issues that’s going to happen when we get into real downside risk is if you’re running a model and you lose money several years in a row and it’s a voluntary model, you’re probably not going to stay in it. But I think over the short term, the ACOs that are in the program will mostly stay in the program.

My guess is that it will slow down new enrollment. We’ve been seeing net new growth of ACOs of about 100 new organizations per year, and I think with Pathways, the issue of reducing the sharing rate from 50% to 40%, I think that’s problematic. I would advocate the sharing rate to go up to 60% or 65% because that would attract more people into the program. But, they’ve reduced it to 40%. I think the impact of that is we’re going to see a slow down in new enrollment, so over time there’s going to be some shrinkage in the program. But, I would say that my belief, which is reinforced being at this conference, is ACOs really believe in this program, they believe in this mission, and they’re going to continue moving forward. I hope we can work with CMS to make these programs better and better.