What Does Trumpcare Mean for the Future of ACOs?

They are cousinly acronyms, ACO and the ACA.

And there’s no question that the 2010 health care reform law was a major boost to ACOs, which, in a nutshell, labor behind the scenes to put health care on a value-based footing while payment dollars are still largely claims-based and flow through fee-for-service channels.

So if the Republican Congress and the Trump administration repeal and replace the ACA, will that spell the end of ACOs?

David Muhlestein(link is external) doesn’t think so.

“I think MACRA keeps them safe,” he told us the other day.

(Another acronym to the rescue.)

Muhlestein is the senior director of research and development at Leavitt Partners, the Salt Lake City health care consulting firm founded by Mike Leavitt, who served as HHS secretary under George W. Bush. Leavitt’s name has showed up on some short lists for that post in the Trump administration, although recently Rep. Tom Price(link is external) seems to have moved to the front of the line.

Trump is not a conventional Republican, to put it mildly. But his administration will probably wind up leaning on hundreds of Republican ideas and positions when it comes to second- and third-tier issues. Promoting ACOs would seem to fall into that category.

Republicans haven’t been adverse to ACOs, notwithstanding the association with the ACA and objections to some aspects of the CMS ACO programs. Mark McClellan, another veteran of top health jobs in the Bush II administration and now a professor at Duke, is an ACO enthusiast. And Muhlestein has researched and written extensively about ACOs. He has been a source in several Managed Care stories about ACOs that you can read here and here.

Muhlestein says MACRA will provide the CMS ACOs some cover from the ACA repeal-and-replace blowtorch because they are the main choice for providers who want to avoid the Merit-based Incentive Payment Incentive (MIPS) track of MACRA and go into the Advanced Alternative Payment Model (APM) track(link is external) instead.

MACRA, he points out, was an “extremely bipartisan” piece of legislation (it passed the House 392 to 37). Junking the CMS ACOs as part of an undoing of the ACA would throw serious sand into the gears of MACRA. It’s doubtful that the new administration will want to do that.

Muhlestein also argues that the ACO trend is much larger than the ACA and the CMS ACOs it spawned. Yes, the CMS ACOs get talked and written about the most because information about them is centralized and made public by CMS, but in Muhlestein’s view they are just one plotline in the larger ACO story. Providers are also entering ACO contracts with commercial payers and with Medicaid programs, he points out. By Muhlestein’s most recent count, there are still more Medicare ACOs (526) than commercial (435) and Medicaid ACOs (77) although there is an overlap between them. In a Health Affairs blog post(link is external) earlier this year that he cowrote with McClellan, Muhlestein reported that of the 28.3 million Americans covered by ACOs, more than twice as many were covered by commercial ACOS (17.2 million) as by Medicare ACOs (8.3 million).

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