On December 31st, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a final rule change to the current Medicare Shared Savings Program (MSSP) structure called “Pathways to Success”. While this rule looks to accomplish additional goals, the main focus is to transition Accountable Care Organizations (ACOs) into risk-bearing contracts sooner. The corresponding proposed rule was released on August 8, 2018, and more in-depth information from it can be found here. This post will highlight the key changes in the final rule from the proposed rule.
Amongst the various changes that occurred between the proposed rule and the final rule is the shared savings rates for some of the levels within the BASIC track. Levels A and B will have up to 40% shared savings rate instead of the originally proposed 25%, and Levels C and D will have up to a 50% shared savings rate instead of the proposed 30% and 40%, respectively.
Track progression for some scenarios also changed. Low revenue ACOs are now defined as those historically having ACO participants’ Parts A and B FFS expenditures under 35% of total FFS expenditures for the ACO’s assigned beneficiaries instead of 25%. New low revenue ACOs will have the option to stay in Level B for an extra year if they commit to then be in Level E for the rest of their agreement period. Additionally, high revenue ACOs who transitioned to Track 1+ in their current agreement period are eligible to remain in the BASIC track under Level E for an additional agreement period.
Another change that occurred with the final rule involves the benchmarking methodology. The final rule presents a 15% regional adjustment to ACOs with historic expenditures above the regional benchmark in order to help these ACOs slowly phase into the use of regional adjustment factors. This is a decreased factor from the proposed 25%. Additionally, the proposed rule presented benchmark changes during agreement periods due to a shift in risk scores of up to 3% in either direction. Under the final rule, the benchmark increase remains capped at 3%, whereas the benchmark decrease cap was removed.
In aggregate, CMS made numerous changes to the Pathways to Success between the proposed rule and final rule, many of which aid ACOs in the transition to more risk and new methodologies. More information regarding the final rule and the implications it could have on ACOs can be found here.
The new rule proposed by the Centers for Medicare & Medicaid Services (CMS) on August 9, 2018 would result in significant changes to the way the Medicare Shared Savings Program (MSSP) works for new Accountable Care Organizations (ACOs) and those currently in a one-sided risk model. Under the current program, ACOs can enter the MSSP under an upside-only risk arrangement referred to as a Track 1 ACO for up to two three-year agreement periods. After that time the ACO is required to transition to a two-sided risk agreement or exit the program. However, the proposed rule would end the Track 1 program and replace it with a new five-year agreement called the BASIC track. This new track would transition from one-sided to two-sided risk throughout the agreement period. This change has the potential to significantly impact ACOs that were planning on entering the MSSP or renewing in Track 1 for their second agreement period by exposing them to two-sided risk earlier than expected.
The proposed BASIC track would consist of five levels that gradually increase the amount of risk and reward taken by the ACO. The first two levels, called “Level A” and “Level B” are identical one-sided models designed to allow new ACOs to establish themselves and gain familiarity with the program. Levels A and B are structured similarly to the current Track 1 program. After that there are three two-sided risk levels with progressively increasing amounts of risk and savings potential, called “Level C”, “Level D”, and “Level E”. Level E is similar to the current MSSP Track 1+ program, while Levels C and D have lower shared risk and savings potential. Each year, the ACO is automatically moved up one level in the progression until reaching Level E, where it would remain until the end of the five-year agreement period. The ACO can also choose to move into a higher level in the progression in any given year; however, once an ACO has moved up the automatic progression continues from its newly-selected level– the ACO cannot reverse or stop the progression. The only level an ACO can remain in for more than one year is Level E at the end of the progression, where the ACO would remain until the expiration of the five-year agreement.
Whether an ACO can enter into the BASIC track, and where they are eligible to enter, depends on its makeup and history in the MSSP. New ACOs are eligible to enter the BASIC track at Level A. New ACOs are defined as those where fewer than 50 percent of its participating physicians have recent experience as part of a Track 1 ACO. Current Track 1 ACOs and re-entering ACOs, those where greater than 50 percent of the participants have recent experience in a Track 1 ACO, are eligible to enter the BASIC track; however, they are required to enter at Level B. This restricts more experienced ACOs to a single year of one-sided risk as opposed to the two years that new ACOs can choose. The ability to renew into the BASIC track for a second agreement period depends on if the ACO is determined to be high or low revenue. More information about what qualifies an ACO as high or low revenue can be found here (link to other blog). Low-revenue ACOs can enter a second BASIC agreement period limited to Level E only. High revenue ACOs are required to move up to the ENHANCED track or exit the program at the conclusion of their first agreement period. Low revenue ACOs also have a lower loss sharing limit.
The proposed changes to the MSSP program have the potential to significantly impact both existing ACOs and those considering entering the program. For more detailed information on this proposed rule and its potential impact please see please click here.
The Centers for Medicare and Medicaid Services (CMS) proposed a new rule in August of 2018 to change the structure of the Medicare Shared Savings Program (MSSP). This will affect current and future ACOs whether they participate in a track with one-sided or two-sided risk. Currently, three MSSP tracks incorporate performance-based, or two-sided, risk: Track 1+, Track 2, and Track 3. Performance-based risk means these ACOs share in a larger portion of any savings below the benchmark, but they also share in losses if their expenditures surpass the benchmark. In the proposed new rule, ACOs will choose between two tracks: BASIC and ENHANCED. ACOs that have participated in performance-based risk tracks in the past are limited to participation in the ENHANCED track or, if they are determined to be low-revenue, ACOs may enter the highest level of risk/reward in the BASIC track.
In order for an ACO that has previously participated in performance-based risk to enter the BASIC track, it must be considered low revenue. An ACO is determined to be high or low revenue based on the percentage of the ACO’s assigned beneficiaries’ total fee-for-service expenditures that are paid to physicians participating in the ACO. If the ACO participants’ total FFS revenue (including revenues for beneficiaries not assigned to the ACO) is more than 25% of the ACO’s assigned beneficiaries’ total FFS expenditures, the ACO is classified as high revenue, otherwise it is low revenue. In general, high-revenue ACOs will be those that include facilities, resulting in a higher degree of control over total expenditures for its assigned beneficiaries. If an ACO is determined to be low revenue, it can choose to participate in the highest risk/reward level of the BASIC track: Level E. Level E of the BASIC track contains the same level of risk and reward as the current Track 1+. The other option available to ACOs that previously participated in performance-based risk is the ENHANCED track. High-revenue ACOs must enter this track, and low-revenue ACOs will be given the option to enter this track. ACOs that choose to participate in the ENHANCED track will receive the same level of risk and rewards as current Track 3 ACOs.
According to CMS, ACOs in performance-based risk models are improving quality of care and perform better over time than ACOs in one-sided risk models. CMS believes the new tracks will encourage ACOs to participate in performance-based risk models, while continuing to reward ACOs that take on the two-sided risk with new tools and a greater reward for beating the benchmark. For more detailed information on this proposed rule and its potential impact please click here.