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CMS Finalizes Medicare Shared Savings Program Rule

June 10, 2016—The Centers for Medicare and Medicaid Services (CMS) June 6 released the Medicare Shared Savings Program (MSSP) final rule, which phases in the use of regional expenditures when resetting Accountable Care Organization’s (ACO) benchmarks and facilitates transition to performance-based risk.

The AAMC submitted comments to CMS in response to the proposed rule [see Washington Highlights, April 1]. The rule finalizes a phased-in approach to incorporating regional fee-for-service (FFS) expenditures into calculations for resetting, adjusting, and updating an ACO’s rebased historical benchmark in its second or subsequent agreement period beginning in 2017 and for all subsequent years. CMS will continue to establish the ACO’s historical benchmark by retrospectively examining Part A and B expenses for the beneficiaries who have been assigned to the ACO in each of the three years prior to the start of the ACO’s agreement period. Additionally, the final rule revises the methodology for national FFS calculations to use assignable Medicare FFS beneficiaries instead of all FFS beneficiaries.

Currently, ACOs may enter a three-year agreement period for a particular participation track (e.g., a one or two-sided Risk Shared Savings Model) and remain under that track for the duration of the agreement period. Eligible ACOs that participated under the one-sided model for their first agreement period may apply to continue in Track One for a second agreement period, or apply to a two-sided model.

However, CMS is adding a third option for Track One ACOs that are renewing their participation. Under the final rule, Track One ACOs may apply to be in a program that starts as a one-sided model but then transitions to a two-sided program in the same agreement period. If the ACO's renewal request is approved, the ACO may request that its initial participation agreement under Track One be extended for an additional year. Under Track One, the ACO will transition to the selected performance-based risk track (e.g., Track Two) at the end of the fourth performance year for a three-year agreement period. This option will become available beginning with the 2017 application cycle.

As a result of these changes, the methodology for determining the ACO’s rebased historical benchmark will reflect an ACO’s performance in relation to other providers in the same regional market, rather than evaluating the ACO against its own past performance. 


Gayle Lee
Director, Physician Payment & Quality
Telephone: 202-741-6429


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
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Telephone: 202-903-0806