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CMS Issues Proposed Rule Making Significant Changes to the Medicare Shared Savings Program

August 17, 2018—The Centers for Medicare and Medicaid Services (CMS) Aug. 9 proposed significant changes to the Medicare Shared Savings Program (SSP) in a proposed rule entitled “Accountable Care Organizations – Pathways to Success.”

Accountable Care Organizations (ACOs) are a value-based payment model created under the Affordable Care Act in an effort to voluntarily bring groups of doctors, hospitals, and other health care providers together to coordinate high quality care for Medicare patients. The SSP is the largest ACO initiative run by CMS, with 561 of 649 Medicare ACOs participating in the program in 2018. Of those 561 SSP ACOs, 460 participate in Track 1 with one-sided risk (i.e., they may be eligible for performance-based bonuses, but are not at risk for repaying performance-based losses).

CMS is proposing to push one-sided ACOs into two-sided risk arrangements through an overhaul of its participation tracks beginning in July 2019. CMS Administrator Seema Verma in an Aug. 9 Health Affairs blog post wrote that this proposed overhaul to move ACOs into two-sided risk is based off of results that “show that ACOs that take on greater levels of risk show better results for cost and quality over time.”

Key highlights include proposing the following changes:

  • Retiring or renaming current tracks, and creating two new tracks - BASIC and ENHANCED:

    • BASIC: Track 1, Track 1+, and Track 2 would be retired and combined, utilizing a “glide path” to permit ACOs to incrementally transition from one-sided risk to higher levels of risk through a five level transition, Levels A-E. Levels A and B would encompass one-sided risk, and Levels C, D, and E would gradually increase to two-sided risk. Level E (year 5) would have the highest level of risk under BASIC and would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program (QPP);
    • ENHANCED: Track 3 renamed, would continue immediate two-sided risk and continue to qualify as an Advanced APM.
  • Agreement periods of five years instead of the current three-year agreement periods:

    • Would avoid interruption in participation for ACOs currently under agreements ending December 31, 2018 by offering those ACOs an opportunity to extend their current agreement periods for an additional six months (to June 30, 2019) and allow those ACOs to apply for a new agreement under the new tracks beginning July 1, 2019;
    • ACOs currently participating in Tracks 1, 1+, or 2 may choose to either finish their current agreements or to terminate and apply for immediate participation in either of the new tracks;
    • Agreements entered into by July 1, 2019 would be agreements for five years and six months. Agreements entered into after July 1, 2019 would be for five years;
    • Implement partial year downside only reconciliation, which would hold ACOs participating in a two-sided risk arrangement accountable for partial year losses if the ACO terminates its agreement more than mid-way through a performance year;
    • Give CMS the authority to terminate ACOs with a record of poor financial performance.
  • Limit ACOs with experience (i.e. past participation in the SSP) to participation with higher-risk options by limiting their maximum participation in one-sided risk to a single year. ACOs new to SSP would be allowed to participate in one-sided risk for the first two years of their participation in the BASIC track.
  • Create a distinction between ACOs as “high revenue” or “low revenue” based upon the ACO’s designation as “hospital-based.”
  • Permit ACO selection, regardless of track, of prospective assignment or preliminary prospective assignment with retrospective reconciliation prior to the start of each agreement period.  An ACO would be able to change their selection for each subsequent performance year.
  • Expanding payment rule waivers to allow ACO physicians and practitioners more options for coordinating the care of attributed beneficiaries:

    • Permit eligible physicians and practitioners in ACOs in a performance-based risk track to receive payments for telehealth beneficiaries, even where geographic limitations have not been met;
    • Allow ACOs with performance-based risk under either type of beneficiary assignment (prospective or preliminary prospective with retrospective reconciliation) to use existing skilled nursing facility (SNF) 3-day rule waiver.
  • Implement a new requirement that ACOs provide a written notice to beneficiaries at their first primary care visit in a performance year that she/he is in an ACO and what that means for her/his care.
  • Permit ACOs in certain two-sided risk arrangements to create benefit incentive programs for beneficiaries attributed to the ACO. The incentive payment could be up to $20 for each qualifying primary care service received by the beneficiary.
  • Remove the ACO-11 quality measure for Certified Electronic Health Record Technology (CEHRT), and instead, require ACOs to attest that a certain threshold of an ACO’s eligible clinicians use CEHRT.

The proposal also seeks comments on recommendations from stakeholders on changes to the quality measure set for ACOs, and options for a methodology to allow Medicare beneficiaries to “opt-in” and choose to be attributed to an ACO in the program.

A CMS fact sheet on the proposed rule is available on the CMS website.

Contact:

Phoebe Ramsey, J.D.
Sr. Regulatory Analyst - Quality & Payment Policy
Telephone: 202-448-6636
Email: pramsey@aamc.org

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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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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org