CMS Proposes Redesign of Medicare Shared Savings Program in Effort to Expedite Move to Performance-Based Risk | Deloitte US has been added to your bookmarks.
CMS proposes redesign of Medicare Shared Savings Program in effort to expedite move to performance-based risk
On August 17, 2018, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule for the Medicare Shared Savings Program (MSSP) that would restructure the program to accelerate participating health care providers’ movement into accountable care organization (ACO) payment arrangements that bear downside financial risk. CMS calls the initiative “Pathways to Success” and describes the proposed changes as “required to support the move to value, achieve savings for the Medicare program, and promote a competitive and accountable health care marketplace.”
August 21, 2018 | Health care
Notably for current MSSP participants, the proposed rule states that CMS does not intend to offer an application cycle during 2018 for new agreement periods that start on January 1, 2019. Instead, the agency is contemplating an application cycle for a one-time new agreement period start date of July 1, 2019, for the two tracks of the restructured MSSP program (more detail provided below). ACOs with participation agreements that end on December 31, 2018, would have the opportunity to extend their current agreement period for an additional six-month performance year and to apply for a new agreement beginning July 1, 2019.
CMS would resume the annual application cycle for the performance year beginning January 1, 2020, and subsequent years.
Importantly, the proposed rule would distinguish between low- and high-revenue ACOs in terms of eligibility to participate in the two payment tracks, moving high-revenue ACOs to a faster pace to risk. The proposed rule indicates that low-revenue ACOs generally will be more common in rural areas and among smaller, physician-only ACOs, while higher-revenue ACOs in many cases will include a hospital.
Comments are due by October 16, 2018.
Immediate stakeholder reaction
Because the proposed rule would reduce the amount of time ACOs could participate in MSSP payment arrangements involving only shared savings from six years (two three-year participation agreements) to two years, stakeholders including the American Hospital Association, the National Association of Accountable Care Organizations, and the Association of American Medical Colleges have raised concerns that the proposed changes could result in a decline in participation in MSSP.
Under payment arrangements involving only shared savings, participating ACOs are eligible to share a percentage of shared savings, but are not liable for any shared losses resulting from expenditures exceeding the ACO’s benchmark amount.
Projected impact on MSSP participation, Medicare expenditures
Currently, 460 of the 561 MSSP ACOs (82 percent) participate in Track 1, featuring only shared savings. Of the 460 Track 1 participants, 82 ACOs’ second participation agreements under Track 1 are due to end on December 31, 2018, requiring them to move into an MSSP track with downside financial risk or leave the program.
CMS estimates that there would be 20 fewer ACOs participating in MSSP in 2019 if policies in the proposed rule are finalized. By 2028, CMS estimates that 109 fewer ACOs would participate in the program.
Overall, CMS projects that the proposed changes would result in a net reduction in Medicare spending of $2.2 billion for the period of 2019 through 2028, reflecting lower ACO participation, lower overall shared savings payments to ACOs, and an increase in incentive payments under the Medicare Access and CHIP Reauthorization Act (MACRA) Quality Payment Program (QPP) for qualifying participants in Advanced Alternative Payment Models (AAPMs).
Additional details on the proposed “BASIC” and “ENHANCED” tracks are presented below. Other key provisions of the proposed rule also are summarized.
Overview of pathways to success: BASIC and ENHANCED tracks
The proposed rule would discontinue Track 1 and Track 2 under MSSP, and similarly discontinue the option for ACOs to renew participation in either track.
Instead, the Pathways for Success initiative would restructure MSSP into two tracks:
- BASIC track, which would allow eligible ACOs to begin under a one-sided risk model and gradually increase to higher levels of financial risk
- ENHANCED track, modeled after the existing Track 3 and offering additional tools and flexibility for ACOs that take on the highest level of risk and potential shared savings
Both the BASIC and ENHANCED tracks would feature five-year participation agreements.
In addition, the Center for Medicare and Medicaid Innovation (CMMI) would discontinue future applications cycles for the Track 1+ demonstration project under the proposed rule’s Pathways for Success initiative.
The BASIC track, which contains elements of the current Tracks 1 and 2, would begin as a one-sided model for eligible ACOs and gradually transition to a level of risk-bearing that would qualify as an Advanced APM under MACRA’s QPP by the final year of the five-year participation agreement. New ACOs could participate in the one-sided risk track for the first two years of the participation agreement, while existing Track 1 ACOs would be eligible to participate in the one-sided risk track for one year of the participation agreement.
While in a one-sided risk arrangement, ACOs would receive up to 25 percent of total savings below established benchmarks, gradually increasing to 50 percent as the ACO takes on more risk.
In general, BASIC track ACOs automatically would be advanced at the start of each performance year along the progression of risk-reward levels. However, the proposed rule would provide for BASIC track ACOs to move more quickly to higher levels of risk and potential shared savings in the initial years of the participation agreement.
ACOs that have participated in MSSP Track 2, Track 3, or the Track 1+ Model, would be required to participate in either the BASIC track’s highest level of risk (Level E) if the ACO is identified as a low-revenue ACO. ACOs that have participated in MSSP Track 2, Track 3, or the Track 1+ Model that have been identified as high-revenue ACOs would be required to participate in the ENHANCED track (explanation of low- and high-revenue ACOs follows).
The ENHANCED track is modeled after the existing MSSP Track 3, including the same shared savings and shared loss rates (see below).
Overview of current and proposed MSSP payment tracks
Low- and high-revenue ACOs
Under the proposed rule, an ACO would be considered to be low revenue if its ACO participants’ total Medicare Parts A and B fee for service (FFS) revenue for assigned beneficiaries was less than 10 percent of the ACO’s assigned beneficiary population’s total Medicare Parts A and B FFS expenditures. Low-revenue ACOs are generally more common in rural areas and among smaller, physician-only ACOs.
Low-revenue ACOs would be allowed to renew participation in the BASIC track at the highest risk level for a second five-year participation agreement. This provision is intended to make it possible for low-revenue ACOs to bear less performance-based risk than high-revenue ACOs while still providing a viable path to participating in Advanced APMs under MACRA’s QPP.
After the initial five-year participation agreement in the BASIC track, higher-revenue ACOs would be required to move to the ENHANCED track, corresponding to the current Track 3 ACO model.
The proposed rule states that CMS does not intend to offer an application cycle during 2018 for new agreement periods that start on January 1, 2019.
Instead, the agency is proposing an application cycle for a one-time new agreement period start date of July 1, 2019, for the BASIC and ENHANCED tracks.
ACOs with participation agreements that end on December 31, 2018, would have the opportunity to extend their current agreement period for an additional six-month performance year and to apply for a new agreement beginning July 1, 2019. As a result of the proposed July 1, 2019, start date for new participation agreements, new ACOs entering the BASIC track’s “glide path” for an agreement period beginning on July 1, 2019, would have up to 2 ½ years under a one-sided model, while existing ACOs that have participated in Track 1 would have 1 ½ years before automatically advancing into two-sided risk-bearing agreements.
Other proposed programmatic changes
In an effort to improve the accuracy of the benchmarks against which ACO performance is measured, the proposed rule would revise the benchmark methodology to incorporate factors based on regional fee-for-service (FFS) expenditures in the first ACO performance year, rather than the second or subsequent performance period.
The proposed rule would aim to mitigate the positive or negative impact of the regional adjustments used to establish and reset the ACO benchmark by:
Reducing the maximum weight used in calculating the regional adjustment from 70 percent to 50 percent; and
Capping the regional adjustment amount using a flat dollar amount equal to 5 percent of national Medicare FFS per capita expenditures.
The proposed rule would discontinue the current methodology for annually risk adjusting the benchmark for newly assigned and continuously assigned beneficiaries. In its place, the proposed rule would adopt a methodology that would allow for adjustments to reflect changes in health status of up to positive or negative 3 percent over the length of the agreement period.
Under the proposed rule, CMS would use a blend of regional and national growth rates based on Medicare FFS expenditures to calculate the regional trend and update factors. This approach would have CMS increase the weight of the national component of the blend as the ACO’s regional area increases. CMS expects this approach to yield:
- More favorable trend factors for ACOs with high penetration in their regional service area with lower spending growth compares to the nation;
- Less favorable trend factors for ACOs with higher penetration in their regional services area with higher spending growth compared to the national; and
- Little impact on ACOs with low to medium penetration in their regional services area.
CMS notes that moving from a three to a five-year agreement period allows for longer-range planning for ACOs to meet and exceed established benchmarks with less concern for a total rebasing on a more frequent timeframe.
To implement a provision of the Bipartisan Budget Act of 2018 (BBA), the proposed rule would provide flexibility for ACOs to choose prospective beneficiary assignment or preliminary prospective assignment with retrospective reconciliation. ACOs would make the choice prior to the start of each agreement period and would be permitted to change that selection for each subsequent performance year.
The BBA included provisions aimed at expanding telemedicine reimbursement for ACOs participating in two-sided risk arrangements.
To implement the BBA provisions, the proposed rule provides for payment to ACOs in two-sided risk arrangements for telehealth services furnished to prospectively assigned beneficiaries even if the otherwise applicable geographic limitations are not met, including when the beneficiary’s home is the originating site. The policy would apply to ACOs entering the BASIC track under a two-sided model and the Enhanced track when the ACO elects prospective assignment, Track 3 ACOs, and Track 1+ ACOs.
The proposed rule seeks comment on an approach that could allow for the policy to be extended to ACOs in two-sided risk arrangements that opt for preliminary prospective assignment with retrospective reconciliation as their methodology for beneficiary assignment.
SNF three-day waiver rule
The proposed rule would allow eligible ACOs in two-sided risk arrangements within the BASIC track’s glide path and the ENHANCED track to use the existing waiver of the requirement of a three-day inpatient hospital stay prior to admission to a skilled nursing facility (SNF). The waiver would be available to eligible ACOs whether they choose prospective beneficiary assignment or preliminary prospective assignment with retrospective reconciliation.
The proposed rule would amend the existing SNF three-day waiver to allow critical access hospitals and other small, rural hospitals operating under a swing bed agreement to partner with eligible ACOs as SNF affiliates for purposes of the SNF three-day waiver.
Beneficiary incentive payments
To implement another provision of the BBA, the proposed rule would allow ACOs operating under certain two-sided arrangements to offer beneficiaries incentive payments of up to $20 for each qualifying primary care service that the beneficiary receives, including visits to Federally Qualified Health Centers or Rural Health Clinics.
Vouchers or other in-kind incentives would be permitted, as long as they have a “reasonable connection to the beneficiary’s medical care and be preventive care items or services or advance a clinical goal for the beneficiary, including adherence to a treatment or drug regime, adherence to a follow-up care plan, or management of a chronic disease or condition.”
The proposed rule would require ACOs to notify beneficiaries of their participation in the ACO, as well as provide information about their options to change their primary care provider or otherwise opt out of ACO participation. Beneficiaries would be permitted to more closely align with an ACO by designating a particular practitioner as their “primary clinician,” with the responsibility to coordinate their care. CMS also seeks public feedback on whether to allow ACOs to employ a beneficiary “opt-in” approach in lieu of or in addition to the standard claims-based assignment approach.
Consistent with requirements of the BBA, the proposed rule would modify existing policies on voluntary alignment of beneficiaries to ACOs by permitting beneficiaries to designate a physician (regardless of specialty) or a nurse practitioner, physician assistant or clinical nurses specialist as their “primary clinician” responsible for coordinating their overall care.
Under the proposed rule, CMS would continue to use the beneficiary’s designation to align the beneficiary to the ACO in which their primary clinician participates even if the beneficiary does not continue to receive primary care services from an ACO professional in the ACO.
In an effort to strengthen program integrity in MSSP, the proposed rule outlines a combination of policies, including:
- Using past participation in performance-based risk Medicare ACO initiatives by the ACO legal entity and by its ACO participants to determine available participation options
- Monitoring for financial performance and permitting termination of ACOs with multiple years of poor financial performance
- Modifying application review criteria to permit CMS to consider the ACOs per capita expenditures and failure to meet quality performance standards in multiple years of the previous agreement period
- Holding terminated ACOs in two-sided models accountable for pro-rated shared losses
ACOs that voluntarily terminate their participation after June 30 of a 12-month performance year would be accountable for pro-rated shared losses.
The proposed rule would adopt new requirements for the use and adoption of Certified Electronic Health Record Technology (CEHRT), including adding interoperability as a prerequisite for both new and renewing ACOs. ACOs would be required to attest that a minimum of 50 percent of participating clinicians use CEHRT.
ACOs that participate in a track or payment model within a track that is an Advanced APM under MACRA’s QPP would be required to attest to the higher of the 50 percent or the CEHRT threshold required for Advanced APMs.
Requests for public comment
CMS seeks public feedback on whether to allow ACOs to employ a beneficiary “opt-in” approach in lieu of or in addition to the standard claims-based assignment approach.
CMS also seeks comment on how to improve the program’s quality measures, with particular emphasis on improving measures related to opioid utilization.
Finally, CMS requests comment on how ACOs can collaborate more closely with Part D prescription drug plans as part of a larger care coordination strategy.
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