On June 6, 2016, the Centers for Medicare & Medicaid Services (CMS) released the final Medicare Shared Savings Program (MSSP) Rule, making some significant improvements to the MSSP program. The two notable changes are the use of regional factors when resetting Accountable Care Organizations’ (ACOs’) benchmarks and a new incentive to transition to the two-sided risk model. These new changes will no doubt help retain existing participants as well as help move some participants into tracks with risk-sharing arrangements.
A significant change, which the industry has been pushing for, is the use of regional Fee-for-Service (FFS) spending rather than national spending data to adjust cost benchmarks in the second or subsequent contract year period. Participants have long argued that success is not properly assessed because participants are currently measured against their own past performance rather than other providers in the same region. Thus, successful ACOs are potentially penalized in future years, while poor performing ACOs realize greater rewards.
CMS will use a phased-in approach to transition to the regional adjustment, with a weight of 35% applied the first year, moving to 70% the second year. CMS also addressed comments on ACOs who may currently have higher spending than their region by allowing for a slower phased-in approach. Initially, the weight placed on the regional adjustment will be 25% in the first agreement period and will increase to 50% in the second agreement period and 70% in the third agreement period.
An ACO’s regional service area will be determined by the counties of residence of the ACO’s assigned beneficiary population. The regional service area will include any county where one or more assigned beneficiaries reside.
CMS will continue to establish the first year historical benchmark based on Parts A and B FFS expenditures for beneficiaries who would have been assigned to the ACO in each of the three years prior to the start of the ACO’s agreement period. However, CMS will now only use assignable FFS beneficiaries for the calculation rather than all FFS beneficiaries.
CMS is also trying to give more incentive to move into Track Two, with downside risk, by allowing for a phased-in transition. CMS will now allow participants to move into Track Two but provides for an additional fourth year of one-sided risk.
CMS did decline to provide an accelerated path into a two-sided track for contracts currently under Track One, which will prevent them from meeting the criteria for advanced alternative payment models (APMs). Because the performance period begins in 2017, these APMs that will be in the second or third year of their agreement period will miss out on bonus payments for 2019.
As of January 2016, there were over 400 ACOs participating in the shared-savings program, serving more than 7.7 million beneficiaries. Most of these are still under Track One, which does not include downside risk. Coupled with the new incentives under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Systems, for which the performance year begins January 2017, organizations should take a good look at the opportunity of taking the plunge into ACOs.
We understand Medicare ACOs: We have helped launch seven or eight over the past two years. But we also understand that this is just a first step toward taking greater control over the Medicare revenue stream by “moving up the food chain.” Our team of veteran executives can help your ACO evaluate the options, manage the workflow to achieve either a Medicare Advantage contract with CMS or a risk contract with an existing MA plan, and continue to achieve improved outcomes Visit our website to learn more >>
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