On August 9, the Centers for Medicare and Medicare Services (CMS) released major changes to Accountable Care Organizations (ACOs). The proposed rule would give new ACOs just two years before they must start sharing savings and losses with the agency. According to CMS, this proposed new direction for the Shared Savings Program would redesign the participation options available under the program to encourage ACOs to transition to two-sided models (in which they may share in savings and are accountable for repaying shared losses), increase savings for the Trust Funds and mitigate losses, reduce gaming opportunity and increase program integrity, and promote regulatory flexibility and free-market principles.
Pathways to Success
The update to the Medicare Shared Savings Program (MSSP), which the agency calls ‘Pathways to Success,’ is expected to significantly reduce the amount of ACOs that participate in the program. CMS estimates that the overhaul will lead to 109 fewer ACOs in the program at the end of 10 years. In the proposal, CMS is aiming to eliminate Track 1 and Track 2 ACOs, and will launch a Basic track that provides a smaller window for an ACO to reach upside before it must take on modest downside financial risk. The agency proposes keeping the Track 3 high-risk option, which would be renamed the Enhanced track. Currently, 460 of the 561 ACOs in the Shared Savings Program this year are in Track 1, eight are in Track 2, 38 are in Track 3 and 55 are in Track 1+.
Basic vs Enhanced Track ACOs
The Basic track would allow ACOs to begin under a one-sided risk model, where they share savings with CMS but do not owe the agency money if certain goals are not met, and incrementally phase in higher levels of risk. That path would allow new ACOs to share only the savings with CMS for two years, rather than the six years currently available to ACOs, before they must take on risk. After that, CMS says the basic track would have three levels of progressively higher risk and potential rewards. Under the proposal, ACOs that have already participated in Track 1 of the current program would only be allowed to continue without taking on risk for one year in the revamped Basic track..
The proposed rule would keep the current Track 3 for ACOs, and rename it the Enhanced track. ACOs that are low-revenue could participate in the Basic track for two five-year periods, under the proposal. But the high-revenue ACOs would be required under the proposed rule to move to the Enhanced track after one five-year agreement period.
Furthermore, CMS proposes to require that each ACO provide a standardized written notice to its Medicare beneficiaries, informing them at their first primary care visit of a performance year that they are in an ACO and what that means for their care. Additionally, CMS will allow physicians and other practitioners that are taking performance risk to receive payment for expanded telehealth services. Physicians could receive payment for certain telehealth services regardless of the patient’s geographical location, including for services furnished to beneficiaries at their home.
CMS also proposes to use an interoperability criterion regarding the use of Certified EHR Technology to determine eligibility for initial program participation and as part of an ACO’s annual certification of compliance with program requirements. Furthermore, CMS seeks comment on approaches to developing the program’s quality measure set in response to the agency’s Meaningful Measures initiative as well as to support ACOs and their ACO providers/suppliers in addressing opioid utilization.
Reviews
Although some groups have criticized the proposal, there has been notable support. For example, Politico points out that former CMS Administrator Andy Slavitt applauded the proposal: “They are making the call that people in Track 1 need to move up or out,” the ex-CMS administrator told POLITICO. “This is a decision that keeps getting deferred every year because people say they aren’t ready. But their view is Track 1 is often an excuse to pick up market share and raise prices, not reduce admissions. I have pushed the same direction.”
Rita Numerof, President of Numerof & Associates added: “As a long-standing advocate for the need to connect payment to outcomes as a mechanism for improving health and lowering total cost, I applaud CMS’ focus to shift incentives to hold ACOs accountable for the care they deliver as a condition of program participation. That means ACOs must assume downside risk for the care they deliver going forward. CMS has the power to shift performance by setting direction and expectations; but it shouldn’t dictate the specifics of how and where care is delivered. 600 pages of guidance to explain changes in rules is yet another example of how administrative bureaucracy unintentionally distracts from the business of delivering care to those who need it.
A market-based model…will lead to better outcomes at lower cost. The model must have three core elements to be successful–1) transparency in cost and quality, 2) accountability for care delivered across the continuum, and 3) consumer choice to drive meaningful competition. CMS can set the stage for these elements to be normative.
Delivering cost effective, valuable health care services to improve health status is an important, complex undertaking. Removing bureaucratic rules and complexity to enable local, market-based solutions will yield superior results each and every time.”