More Home Health Participation Likely, as Number of ACOs Taking Downside Risk Doubles

The latest ACO numbers from the Centers for Medicare & Medicaid Services (CMS) are in — and home health providers should be paying attention.

More than two years ago, the Trump administration made major changes to the Medicare Shared Savings Program for accountable care organizations (ACOs), arguably the biggest value-based payment program in fee-for-service Medicare. 

While the ACO model is nuanced and complex, ACOs are generally defined as groups of health care providers that agree to be held accountable for the quality, cost and experience of care for a population of Medicare beneficiaries. That sometimes includes both upside and downside risk.


Since the concept took off, home health providers have been viewed as valued partners within that group, though some believe their participation should be greater.

“As ACOs look at the costs of post-acute care, they are finding that, in a lot of areas, spending is really high for facility-based care,” Robert Mechanic, executive director of the Institute for Accountable Care, told Home Health Care News in June. “There has been a conscious effort to try and identify people who don’t need to be in a facility and discharge them to home, as long as they make a determination that they’re safe at home. Substituting home health agency care for skilled nursing facility (SNF) or rehab care — where it’s appropriate — makes sense for the ACO model because they are on a global budget.”

Jan. 1 marked the second start date for ACOs under the Trump administration’s redesigned program, following the initial start date for the new program options of July 1, 2019. On Friday, CMS released new numbers that show continued strong interest and participation.


Specifically — for the Jan. 1 start date — CMS approved 53 applications for new ACOs, plus 100 applications for renewing ACOs.

Additionally, the total number of Medicare beneficiaries served by health care providers in ACOs is now 11.2 million, up from 10.4 million at the start of 2019, according to CMS.

That means nearly 30% of all fee-for-service Medicare beneficiaries are now served by a health care provider in a Shared Savings Program ACO.

What’s more, the number of ACOs taking on risk for cost increases has grown, too. There were 192 ACOs taking on risk at the start of 2020, nearly 100 more than the 93 ACOs at the start of 2019.

“The number of ACOs with real accountability has more than doubled over the past year,” CMS Administrator Seema Verma wrote in a Health Affairs blog post. “This will translate to lower costs and higher value for Medicare beneficiaries and taxpayers.”

With more ACOs taking downside risk, home health providers will presumably see more action. The key, though, will be their ability to demonstrate improved health outcomes and prevent avoidable hospital re-admissions — and communicate those results to potential ACO partners.

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