ACOs Vulnerable to Penalties, No Savings in Light of Coronavirus

William Faber, MD, Modern Healthcare

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Accountable care organizations that participate in the Medicare Shared Savings Program are concerned they will be on the hook for penalties and won't receive shared savings this performance year because of the novel coronavirus.

The National Association of ACOs has been hearing from members worried the COVID-19 outbreak will drive up Medicare beneficiary spending this year, ultimately affecting the benchmark used to determine savings and losses in the program. The benchmark uses historical Medicare spending in addition to current performance year spending.

ACOs are accountable for Medicare beneficiaries who are particularly vulnerable to the coronavirus. The elderly and those with chronic conditions such as diabetes are most at-risk for serious side effects, according to the CDC. As a result, ACOs can see spikes in expensive hospital stays and potential readmissions among their assigned Medicare beneficiaries. At the same time, spending will continue to be compared to previous years, which "is a big concern," Brennan said.

"There is no doubt in my mind this is going to blow their budgets out of the water," said Dr. William Faber, director of Guidehouse, a consultancy. "It's likely going to wipe out any shared savings that any of the at-risk ACOs will have this year."

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