In an August 9, 2018 proposed rule, the Centers for Medicare & Medicaid Services (CMS) seeks to redirect the Medicare Shared Savings Program (MSSP) on so-called “Pathways to Success.”

Entitled Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations– Pathways to Success, the proposed rule would redesign MSSP participation options in a number of ways, and thereby encourage Accountable Care Organizations (ACOs) to transition to two-sided models. These two-sided models require ACOs to share in savings as well as losses, and thereby assume a certain degree of risk. For example, CMS proposes in this rule to reduce the amount of time an MSSP ACO can remain in a one-sided or shared savings-only model to two years, with previous ACOs restricted to a single year under a one-sided model. According to CMS, incentivizing MSSP risk assumption would increase Medicare Trust Fund savings while mitigating losses. CMS also believes its proposed changes would increase program integrity by eliminating certain gaming opportunities, promote regulatory flexibility and free-market principles, bolster beneficiary engagement, ensure stringent benchmarking and ultimately, enhance care for Medicare beneficiaries. However, the vast majority of MSSP ACOs – 82% in 2018 – participate in a one-sided model (Track 1), and many of these ACOs have expressed concerns about being forced into risk prematurely. In a May 2018 survey conducted by the National Association of Accountable Care Organizations (NAACOS), 71% of respondents indicated they are likely to leave the MSSP if required to assume risk next year. Thus, to NAACOS, the proposed shortening of one-sided model participation will be a key issue in its comments to the proposed rule.

CMS’ proposed rule includes the following changes to MSSP:

  • Streamline MSSP by retiring Tracks 1 and 2 and the deferred renewal option, and discontinuing Track 1+ in future application cycles. For agreement periods beginning on July 1, 2019 and thereafter, eligible ACOs could enter into one of two new tracks: a new BASIC track that starts as a one-sided model and incrementally phases in higher levels of risk through a ‘glide path’; and an ENHANCED track based on the current Track 3, offering more tools and flexibility for ACOs that take on the highest level of risk and possible reward.
  • Increase the MSSP agreement period from 3 to 5 years.
  • Allow ACOs to accelerate to a higher level of risk/reward within an agreement period; these ACOs could qualify as Advanced APMs under the Quality Payment Program if they assume enough risk. (By default, ACOs in the BASIC track would automatically advance at the start of each performance year along the glide path to increased risk/reward.)
  • Modify benchmarking methodology in an effort to provide more accurate and predictable benchmarks – including incorporating factors based on regional fee-for-service expenditures to set an ACO’s historical benchmark in its first agreement period, and adjustments to reflect changes in health status of up to -/+3% over an agreement period.
  • Implement measures to deter gaming, including limiting more experienced ACOs to higher-risk participation options (e.g., by using past participation in performance-based risk Medicare ACO initiatives by an ACO entity and/or ACO participants to assess available participation options).
  • Modify application review criteria to more rigorously screen for good standing among ACOs seeking to renew or re-enter MSSP after termination or expiration of their previous agreement. Relatedly, terminated ACOs in two-sided models would be held accountable for partial-year losses if either the ACO or CMS terminates their agreement during a performance year.
  • Implement provisions of the Bipartisan Budget Act of 2018 (BBA), which would allow eligible ACOs in performance-based risk arrangements to take advantage of certain telehealth waivers, establish a beneficiary incentive program, and broadened access of the current SNF 3-day waiver.
  • Modify beneficiary assignment methodology through: an expanded definition of primary care services (adding new codes); a new “opt-in” methodology under which a beneficiary is assigned to an ACO if he/she has opted into the ACO; and continued use of a beneficiary’s designated primary care physician (which can be a physician of any specialty, or a NP, PA or clinical nurse specialist), even if the beneficiary no longer receives primary care services from an ACO professional in that ACO.
  • Seek comment on initiatives to promote EHR interoperability, combat opioid addiction, and improve quality of care and coordination of pharmacy care for ACO beneficiaries.

Notably, CMS no longer intends to offer an application cycle during 2018 for a January 1, 2019 start date, and instead proposes an application cycle for a one-time agreement period starting July 1, 2019. ACOs with a participation agreement ending on December 31, 2018 would have the option to extend their current agreement for 6 months through June 30, 2019 to prevent an interruption in participation, and could apply for a new agreement beginning July 1, 2019. CMS would then resume its annual application cycle beginning with the January 1, 2020 performance year.

CMS encourages interested members of the public to submit comments to its proposed rule during a 60-day comment period. The comment period is projected to close on October 16, 2018.

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