Population Health During a Pandemic: What ACOs Can Do to Weather the Storm and Come Out Ahead

by | Oct 19, 2020 | Blog

As of August 21, the US had more than 5.5 million confirmed cases of COVID-19, with more than 174,000 deaths.[1] While the number of cases has decreased in most regions, other areas are now in an upswing. The same is true in other countries around the globe. It’s clear at this point that the virus isn’t going away anytime soon. And now we’re about to enter flu season, which experts predict could be a “perfect storm.”[2] It’s just too soon to tell what the impact might be.

All of this is not good news for physicians and hospitals still trying to get back to some semblance of normal. This is especially true for ACOs, many of which were already on the line as to whether to continue as an ACO even before the pandemic. A survey of 20 ACOs conducted this spring found this to be a significant concern.[3] Because of the turmoil caused by COVID-19, 56% ACOs are considering opting out of shared risk reimbursement models in favor of the old fee-for-service world.[4] The survey also found that “as a result of swings in unpredictability and spikes in expensive hospitalizations, 21% of at-risk ACOs were “very likely” to leave the Medicare ACO program, 14% said they were “likely,” and another 21% said they were “somewhat likely” to leave.

Achieving quality metrics and spending requirements prior to the pandemic were already challenging. Social distancing requirements—and patient fear—have made it even more difficult to conduct health screenings and see patients for their regular check-ups. ACOs with a large percentage of aging patients or those with comorbidities are finding it challenging to meet their chronic care management (CCM) goals.

Updates to the Medicare Shared Savings Program

There are currently 517 Medicare Shared Savings Program ACOs in the US, serving more than 11 million Medicare FFS beneficiaries.[5] The CMS recognizes the importance of the ACO model in improving care and reducing costs and has relaxed requirements and extended deadlines to encourage ACOs to stay the course. “The changes we are making in this IFC (Interim final rule) will help to ensure a more equitable comparison between ACOs’ expenditures for PY 2020 and ACOs’ updated historical benchmarks and that ACOs are not rewarded or penalized for having higher/lower COVID-19 spread in their patient populations which, in turn, will help to protect ACOs from owing excessive shared losses and the Medicare Trust Funds from paying out windfall shared savings.”[6]

Issues being addressed include:

  • Adjust the methodology for determining shared savings and shared losses, such as by Reducing or eliminating liability for ACOs under performance-based risk for shared losses for PY 2020; not sharing savings or losses with ACOs for PY 2020; or adjusting program calculations to address the impact of COVID-19 on benchmark and PY expenditures, particularly for the calendar year 2020.
  • Eliminate or extend the deadline for ACOs to voluntarily terminate from the program without being financially reconciled for PY 2020, which under § 425.221(b)(2)(ii)(A) is June 30, 2020, with notification 30 days prior (no later than June 1).
  • Maintain or “freeze” ACOs in their current participation options so that ACOs required to renew their participation for a new agreement period starting on January 1, 2021, are not burdened with meeting application deadlines and forgo the requirement that ACOs are participating in the BASIC track’s glide path advance to the next level for PY 2021.
  • Account for changes in billing and care patterns in determining beneficiary assignment.


Telehealth expansion

The CMS also has relaxed requirements around telehealth. On March 27, CMS announced the expansion of reimbursement for telehealth services. Medicare payments for telehealth now cover patients no matter where they live and include services performed by practitioners other than the physician.[7]

Prior to the pandemic, only a fraction of physicians used telehealth in their practices. Then COVID-19 hit and, seemingly overnight, telehealth became the norm to continue caring for patients while keeping them safe at home. One physician said his office rolled out a new telehealth program in just 36 hours.[8]

More than 16 million Americans say they used telehealth for the first time during the pandemic[9]

Even before the pandemic, we understood that achieving positive outcomes required ongoing care outside of the exam room, especially for those with chronic diseases, which is now the majority of the population. The expansion of telehealth during the pandemic supports the implementation of CCM and RPM (remote patient monitoring). Telehealth-enabled CCM and RPM increase care plan adherence and provide a more seamless care experience throughout the ACO continuum.[10] This reduces gaps in care by providing a more holistic, patient-centric healthcare experience. And isn’t this what population health is all about?

We don’t yet know which of the CMS changes will become permanent once the pandemic has gone. ACOs would be wise to take full advantage of the changes as they are now, not just to weather the pandemic storm, but also to identify ways to leverage these changes ongoing. Telehealth is a prime example. Telehealth is queued up now; the technology is in place, workflows are established, and, for the most part, patients have accepted virtual care as part of a “new normal.” Now is the right time to double down on telehealth as a conduit for a more effective continuum of care and a more financially sustainable future for ACOs.


[1] https://coronavirus.jhu.edu
[2] https://science.sciencemag.org/content/368/6496/1163
[3] https://www.fiercehealthcare.com/hospitals-health-systems/more-acos-turn-to-telehealth-to-combat-covid-19-financial-crisis
[4] https://www.natlawreview.com/article/more-help-way-accountable-care-organizations-cms-announces-new-relief-acos
[5] https://www.federalregister.gov/documents/2020/05/08/2020-09608/medicare-and-medicaid-programs-basic-health-program-and-exchanges-additional-policy-and-regulatory
[6] https://www.federalregister.gov/documents/2020/05/08/2020-09608/medicare-and-medicaid-programs-basic-health-program-and-exchanges-additional-policy-and-regulatory
[7] https://www.federalregister.gov/documents/2020/05/08/2020-09608/medicare-and-medicaid-programs-basic-health-program-and-exchanges-additional-policy-and-regulatory
[8] https://www.managedhealthcareexecutive.com/news/opportunity-calling-will-covid-19-bring-telehealth-mainstream-american-healthcare
[9] https://www.pwc.com/us/en/library/covid-19/covid-19-consumer-behavior.html
[10] https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/chroniccaremanagement.pdf

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