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From Health Law Daily, August 10, 2018

You want to play, put some skin the game

By Kelly J. Rooney, J.D., M.P.H.

CMS Administrator Seema Verma explained that "after six years of experience, the time has come to put real ‘accountability’ in accountable care organizations" (ACO) in announcing the proposed major overhaul of the Medicare Shared Savings Program (MSSP) dubbed the "Pathways to Success." The goals of the revised program are to "move to value," achieve savings, and promote a "competitive and accountable healthcare marketplace." Steven F. Banghart, Partner with the Chicago office of Nixon Peabody, in an interview with Wolters Kluwer noted: "This is a significant overhaul of the MSSP ACO program. Up until now changes have been done incrementally but this is a major reorganization of the program." CMS estimates that reducing claims and ACO shared savings payments under the proposed changes would save the federal government $2.24 billion over 10 years.

MSSP and track models. Accountable care organizations (ACOs), created under the Patient Protection and Affordable Care Act’s (ACA’s) MSSP, are groups of providers of services and suppliers that work together and are jointly responsible for the cost and quality of care provided to Medicare fee-for-service (FFS) beneficiaries. Currently, ACOs may choose to participate in various payment models under the program ranging from the Track 1 one-sided model (meaning it only shares in savings) to the Track 2 two-sided model (sharing in both savings and losses) to Track 3 two-sided model (with a higher potential for savings). There is also the Track 1+ model which allows clinicians to participate in Advanced Alternative Payment Models (APMs) under the Quality Payment Program, which offers an opportunity for an incentive payment. The current participation agreement period is limited to three-year terms, with participants limited to a maximum of two periods in a respective model, after which time they must switch to a different track should they choose to continue participation in the MSSP. (See Are ACOs ‘truly here to stay’ or ‘a passing fad’?, May 4, 2017, for discussion on the performance of ACO participants.).

The proposed rule. Under the proposed rule, issued on August 9, 2018, CMS aims to redesign participation options to move toward two-sided models which share in both savings and losses as well as to increase savings for Medicare trust funds, mitigate losses, reduce "gaming" of the program, and increase program integrity. CMS claims this rule would ensure a more rapid transition to performance-based risk with providing stakeholders with a smoother transition and phased-in risk approach to a two-sided model.

Proposed new tracks. The current tracks, except for Track 3, which would go by a different name, would be retired under the proposed rule. Two new tracks are proposed: the BASIC track and the ENHANCED track. The BASIC track’s "Glide Path" would ramp up risk levels from Levels A and B—one-sided models with participants sharing in rewards only—to the two-sided models of Levels C, D, and E where the ACO would participate in both the reward and the risk. Level E would be the next incarnation of the current Track 1+ Model, and would give the ACO Advanced APM status under the QPP. The ENHANCED track provides the highest level of risk but also the highest level of potential reward.

Not only do the various options provide differing levels of risks, but also varying degrees of control over total Medicare Parts A and B FFS expenditures. CMS reasons that lower revenue ACOs can participate in the BASIC track while high revenue ACOs, which have a greater potential to affect change "exert more influence, direction, and coordination over the full continuum of care", will need to participate in ENHANCED and can spend no more than one agreement period participating in the BASIC track.

Agreement periods. Under the proposed rule, the participation periods would change from three years to five years which, according to CMS, would allow for greater predictability for participating ACOs by reducing the frequency of benchmark rebasing. A July 1, 2019, start date is proposed for the first five-year agreement period. That first period starting on July 1, 2019 would be 5 years preceded by a six-month first performance year through December 31, 2019. CMS proposes to forego the application cycle for 2019 for ACOs with agreement start dates of January 1, 2019. Instead, ACOs with periods ending December 31, 2018 could extend their current period for an additional six-month performance year.

Benchmarking. The proposed rule would continue to refine the benchmarking process for the MSSP and redesign it. CMS argues that accurate benchmarks are needed, to better protect Medicare funds, attract new participants, and ensure that participants do not excessively profit from one part of the calculations. The refinement would involve incorporating regional FFS expenditures—which would more accurately represent the ACO’s cost in relation to the regional area—in establishing the ACO’s historical benchmark in its very first participation period.

Flexibility for beneficiaries. The revised program, according to CMS, would allow for greater flexibility in policies to better engage beneficiaries, many of which were established by the Bipartisan Budget Act (BBA) (P.L 115-123). Among the proposals are that (1) two-sided risk ACOs would be allowed to create beneficiary incentive programs related to qualifying primary care services; (2) policies governing telehealth furnished by practitioners in two-sided models would be created; and (3) the program would allow for broader access to the existing SNF three-day rule waiver for ACOs under performance-based risk. Beneficiaries would be afforded a broader range of professionals to choose as their primary clinician under the program.

Other proposals. A number of other provisions are provided in the rule, including:

  • Changing the requirements for evaluating ACO eligibility when renewing program participation after termination or expiration of a prior agreement; and in reentering the program after termination.
  • Reducing the notice required to CMS when an ACO wishes to voluntarily terminate.
  • Imposing payment "consequences" when an ACO participating in a two-sided model chooses to terminate early, to make it liable for pro-rated shared losses.
  • Establishing new program requirements for eligible ACO clinicians adopting certified electronic health record technology (CEHRT).
  • Requesting comment on the collaboration of ACOs and sponsors of stand-alone Medicare Part D prescription drug plans (PDPs).

What’s behind this rule? Banghart offered his opinion: "CMS has been disappointed by the low percentage of ACOs that have opted for two-sided risk and that are still under the upside-only track. The proposed rule seeks to change this differential in ACO participation by putting specific time frames in place in the BASIC pathway that will move the ACOs into two-sided risk as of a date certain."

Looking ahead. According to Banghart, "CMS believes that this rule will improve the financial performance of the MSSP program, however it will be interesting to see how the rule will impact the number of new or renewal applications in 2019 and beyond, notwithstanding some of the program enhancements that are included in the proposed rule."

Attorneys: Steven F. Banghart (Nixon Peabody LLP).

MainStory: TopStory ReimbursementNews ACONews CMSNews EHRNews GCNNews HealthReformNews PartANews PartBNews PartDNews ProgramIntegrityNews FedTracker HealthCare

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