New Law Could Spur Movement to Two-Sided Risk, AIS Newsletter Predicts

Share Article

The law that ended the Medicare Sustainable Growth Rate formula also could push more value-based providers to accept downside risk acceptance, an industry consultant predicts in the February 2016 issue of AIS’s Value-Based Care News.

A new law could spur many providers to move to two-sided risk, predicts Leavitt Partners LLC Director of Research David Muhlestein in the Februrary 2016 issue of AIS’s Value-Based Care News (VBC). According to VBC, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the Medicare Sustainable Growth Rate (SGR) formula — which was unpopular with providers — and replaced it with two separate types of incentive payments: the Alternative Payment Model and the Merit-Based Incentive Program.

Physicians who participate in Alternative Payment Models could get a 5% annual bonus from Medicare, according to VBC, but they would have to accept downside risk for at least 25% of their payments. That means that they would have to share in losses if a patient’s care cost more than expected, as well as share in savings if care cost less than expected. The alternative, the Merit-Based Incentive Program, offers bonuses based on quality, use of resources, use of electronic health records and practice improvement, and thus is much more complex.

Muhlestein predicts the bulk of ACOs will make the move into downside risk arrangements in 2019, when the law forces them to choose between the two payment systems.

MACRA was passed last spring, with proposed and final rules due in spring and fall, respectively.

Visit to read the article in its entirety.

About AIS’s Value-Based Care News
AIS’s Value-Based Care News (VBC) delivers timely news, data and strategies related to ACOs, medical homes, bundled payments, coordinated care and global payments. Formerly published as ACO Business News, the newsletter focuses intently on value-based launches, products and results, and innovative arrangements that can help your organization improve the quality of care, lower costs and grow market share. Featuring the pros and cons of various strategies for different types of organizations, VBC is designed to help readers avoid the pitfalls ahead and transform exciting value-based care opportunities into winning business strategies. Visit for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for nearly 30 years. It develops highly targeted news, data and strategic information for managers in hospitals and health systems, health insurance companies, medical group practices, purchasers of health insurance, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, databases, Websites, looseleafs, strategic reports, directories, webinars and virtual conferences. Learn more at

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Jill Brown, Executive Editor
Follow >
since: 01/2011
Like >
Atlantic Information Services, Inc.

Visit website