New Direction for the Medicare Shared Savings Program

New Direction

December 27, 2018

NEWS ALERT: The Centers for Medicare and Medicaid Services announced a new direction for the Medicare Shared Savings Program (MSSP) which overhauls the current ACO models available for Medicare providers. This will affect all providers participating in all current MSSP models, which serve more than 10.5 million Medicare fee-for-service beneficiaries.

Including:

  1. Replacing four tracks with two new tracks (no more Tracks 1, 1+, 2)
  2. Requiring advancement towards full risk (no more staying indefinitely in a one-sided risk model)
  3. Longer participation periods
  4. More emphasis on quality
  5. Encouraging involvement by low revenue ACOs


The changes reduce the number of MSSP ACO tracks available and emphasize progression towards two-sided risk models for providers. The current tracks (Track 1, Track 1+, Track 2, and Track 3) will all be replaced with two new tracks: the Basic or Enhanced track. Below, we analyze five key changes that could affect your organization.

CMS is making these changes based on the following observations:

  • The vast majority of current MSSP ACOs have chosen Track 1, the one-sided, shared savings-only model, under which eligible ACOs receive a share of any savings under their benchmark but are not required to pay back a share of spending over the benchmark. Many ACOs have remained in this track for many years.
  • Some Track 1 ACOs are increasing Medicare spending (and therefore generating losses) while having access to waivers of certain federal requirements in connection with their participation in the program. The ACOs in two‑sided models (Track 2 and Track 3), under which eligible ACOs are required to share losses if spending exceeds the benchmark, have shown savings to the Medicare program and are improving quality.
  • Low revenue ACOs (which are typically composed of physician practices and rural hospitals) outperform high revenue ACOs (typically ACOs that include hospitals). 

Given these observations, CMS is making the following key changes to MSSP ACO models available to providers.

1. Replacing four tracks with two tracks

Beginning on January 1, 2020 (or on July 1, 2019 for those ACOs with a with a participation agreement ending at the end of June), two tracks will be available for eligible ACOs:

  • The Basic track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk that, at the highest level, would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.
  • The Enhanced track, based on the program’s existing Track 3, which provides additional tools and flexibility for ACOs that take on the highest level of risk and potential reward. 

2. Required advancement towards full risk

The goal of the Basic tack is to enable ACOs that are earlier in their value-based care journeys to level up each year towards two-sided risk and Advanced APM status. The path of advancement in the Basic track includes five Levels, referred to as Levels A through E.

A key shift is that a one-sided risk model will be available only for the first two years (Levels A and B) to most eligible ACOs. These two    years are followed by and three levels of progressively higher risk in years 3 through 5 of the agreement period (Levels C, D and E), with level E qualifying as an Advanced APM under the Quality Payment Program. 

ACOs in the Basic track generally will be automatically advanced at the start of each performance year along the progression of risk/reward levels or could elect to move more quickly to a higher level of risk/reward, over the course of their agreement period. This will prevent ACOs from remaining in the one-sided risk model for a long period of time, which is a phenomenon CMS has observed with current MSSP participants.

3. Longer participation periods

In order to enable this phased-in approach and ensure a continuous transition towards value-based care for participating ACOs, agreement periods will be not less than five years going forward, compared with three-year agreement periods currently offered.

4. More emphasis on quality

Based on public comments, CMS will increase levels of shared savings for ACOs with higher quality performance. Up to 40 percent shared savings will be available for one-sided models (Levels A and B) and up to 50 percent for all two-sided models (Levels, C, D, and E). Reaching these highest levels of shared savings will depend on achieving higher quality performance.

In addition, CMS is modifying ACO application review criteria to permit CMS to consider the ACO’s failure to meet quality performance standards in multiple years of the previous agreement period.

 

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5. Encouraging involvement by low revenue ACOs (typically physician-led)

Given CMS’s observation that low-revenue ACOs have typically generated more savings for CMS than high-revenue ACOs, there are provisions in the new rule to encourage participation from low revenue ACOs.

This includes an allowance that new, low revenue ACOs that are not identified as re-entering ACOs would be allowed up to three years under a one-sided model, rather than two years in the one-sided model allowed for other ACOs.

To stay up to date on evolving Medicare payment programs, check back often to WhittleAdvisors.com for news and industry updates.    

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