Health Care Matters | May 30, 2025
CMS Extends and Modifies Kidney Care Choices Model Through 2027
The Centers for Medicare & Medicaid Services Innovation Center is implementing significant changes across multiple payment models, offering early signals of the Trump administration's approach to value-based care. CMS extended the Kidney Care Choices (KCC) Model through 2027 while making substantial financial modifications to address $304 million in net losses, including reduced capitated payments and elimination of the $15,000 transplant bonus. Meanwhile, industry observers are closely watching for potential extension of the ACO REACH model beyond its 2026 expiration, particularly the high-needs track that has demonstrated double-digit net savings rates. High-needs ACO REACH participants averaged a 13.3% savings rate in 2023, nearly five times higher than the 2.8% average for other ACO REACH participants. The optimism stems from CMMI's new strategy prioritizing complex care and specialty populations, with industry coalitions actively lobbying for renewal based on the model's strong financial and quality performance. Read more here, here, and here.
Why It Matters
These developments reveal the administration's evolving framework for Innovation Center models, with a heavy emphasis on delivering savings alongside quality improvements. Both the KCC modifications and the recently released changes to ACO REACH demonstrate CMS's willingness to make mid-course corrections to model financial methodologies to ensure financial sustainability. The potential ACO REACH extension, including the high needs track also signals continued interest in both serving complex populations and innovation around total cost of care models. Industry stakeholders should expect increased scrutiny on financial performance and a willingness by the Innovation Center to make changes that may be unpopular but ensure ROI to the Medicare trust fund.
Implementing Administrative Benchmarks In The Medicare Shared Savings Program: Opportunities And Challenges
The Centers for Medicare and Medicaid Services (CMS) introduced the Accountable Care Prospective Trend (ACPT) in 2024 to improve how spending targets are set for accountable care organizations (ACOs) in the Medicare Shared Savings Program. However, the policy's first-year implementation has created significant challenges. The ACPT growth rate of 4.9% fell well below the 7.5-9.0% actual spending growth reported by ACOs, creating a substantial gap that could reduce ACO benchmarks by $2.7-4.1 million for a typical 25,000-beneficiary ACO. While the ACPT was designed to address the "collective success problem" and "ratchet effect" that discourage ACO participation by separating benchmark updates from actual spending growth, the immediate impact threatens to make program participation less attractive rather than more so. Read here.
Why It Matters
Given that CMS just updated the ACPT rate to 4.9%, it's unlikely they will make another rate adjustment in the near term. However, CMS does have built-in guardrails that can reduce or eliminate ACO losses and retains the option to adjust the ACPT's weight relative to the national-regional trend when there are significant deviations from actual spending growth. Any policy decisions will ultimately align with CMS's priority of preserving cost savings for the Medicare program. ACOs should closely monitor whether CMS exercises its discretionary authority to reduce the ACPT weight for 2024 performance year settlements, as this will signal how the agency balances program savings with provider participation incentives.
In the medium to longer term, this experience highlights a fundamental challenge that CMS and the broader industry must continue to address: how to appropriately balance the desire for predictable, administratively-set benchmarks with the accuracy needed to ensure meaningful results and sustainable ACO participation. The tension between providing certainty for ACO financial planning while maintaining program integrity and Medicare savings will likely influence future payment model designs beyond the MSSP. As physician fee schedule updates continue to lag inflation and new value-based models emerge, the lessons learned from ACPT implementation will inform how administrative benchmarking approaches can be refined to better serve both program goals and provider sustainability.
Look for the Helpers: Evidence Reveals Social Bonds Make Us Happier and Healthier
Researchers like Dr. Robert Waldinger at Harvard and Dr. Sonja Lyubomirsky have dedicated decades to understanding what truly makes people happy, confirming through rigorous scientific study that meaningful relationships and social connections are the key to wellbeing. Their work provides evidence-based guidance that helps people improve their mental health and life satisfaction, with Waldinger's TED talk reaching over 40 million people worldwide with the simple but powerful message that "good relationships keep us happier and healthier." This research serves communities by offering scientifically-backed strategies for building the social connections that are essential for health and wellbeing. Read here.
What We Are Reading
Andy Slavitt to join the HCPLAN as Executive Forum Co-Chair
Andy Slavitt, who served as head of Medicare and Medicaid under President Obama and as a senior advisor for COVID-19 response under President Biden, has been named Co-Chair of the Health Care Payment Learning and Action Network's Executive Forum. He joins Dr. Alice Hm Chen, Dr. Judy Zerzan-Thul, and Dr. Mark McClellan to guide the network's strategic initiatives focused on accelerating alternative payment models, health care choice and competition, patient empowerment, and technology-enabled care delivery. Read here.
Impact of Community Health Center Losses on County-Level Mortality: A Natural Experiment in the United States, 2011–2019
A new study published in Health Services Research found that losing Community Health Center sites was associated with a significant increase of 3.54 deaths per 100,000 people in the following year, with cancer mortality showing the largest increase, highlighting the critical role these centers play in maintaining population health in underserved areas. Read here.
Report Shows 64% of Health care Leaders Expect Revenue Gains from Value-Based Care in 2025
Health care organizations are increasingly confident in value-based care, with 64% expecting revenue gains in 2025, though financial risk remains the top adoption barrier according to a new joint report from Innovaccer and NAACOS surveying 168 health care leaders. Read more here.
Defaulting Into Medicare Advantage: What It Could Mean For Medicare And Its Beneficiaries
A Health Affairs analysis examines how changing Medicare's default enrollment from traditional Medicare to Medicare Advantage could affect millions of new beneficiaries by potentially locking them into private plans while increasing federal costs by about 20% per beneficiary. Read here.
Who is hiring
NAACOS is hiring a Director of Education to design and implement dynamic educational programs that meet the evolving needs of ACOs, healthcare providers, and policy leaders, collaborate with experts and stakeholders to identify learning needs and shape learning programs, and manage learning technologies. To learn more, click here.
podcast Spotlight
Breaking Down CMS’ New Direction
In this special episode, Coral’s Meg Koepke and Melissa Cohen break down the newly released CMS Innovation Center strategy, exploring what we heard and what it could mean for the future of health care transformation.