Final Rule Creates Pathways to Success for the Medicare Shared Savings Program

(Baltimore, MD – Insurance News 360) – The Centers for Medicare and Medicaid Services (CMS) issued a final rule which creates a new direction for the Medicare Shared Savings Program. The new direction is called Pathways to Success and redesigns participation options to encourage Accountable Care Organizations to move to performance-based risk more quickly, and for those ACOs that are eligible to increase savings for trust funds. They also address additional tools and flexibilities for these organizations, as established in the Bipartisan Budget Act of 2018.

These additional tools include new beneficiary incentives, telehealth services and choice beneficiary assignment methodology. This final rule also finalizes the program’s policy for extreme and uncontrollable circumstances for performance year 2017.

CMS will offer an application cycle for a single new agreement period starting July 1, 2019, to avoid interrupting participation by ACOs  that elected on Dec. 31, 2018 to extend their agreement period for an additional six month performance year.

CMS will resume the usual annual application cycle for agreement periods starting on January 1, 2020, and in subsequent years.

Major changes include the availability of an optional 6-month extension for ACOs whose agreements expired on Dec. 31, 2018, methodology for determining financial and quality performance, ; a reduction in the Shared Savings Program core quality measure set by eight measures and a new Certified EHR Technology (CEHRT) threshold criterion to determine ACOs’ eligibility for program participation in order to promote interoperability among ACO providers/suppliers; refinements to the voluntary alignment process. They also implement policies to address the impact of these changes are expected to allow beneficiaries more flexibility when choosing medical providers.

Shared Savings Program ACOs serve more than 10.5 million Medicare fee-for-service beneficiaries. This program helps CMS payment systems to move from pay for volume to instead look at paying for value and outcomes.  The Shared Savings Program originally had three tracks, and the most popular seems to be a one-sided shared savings-only model in Track 1. ACOs receive a share of savings under their benchmark, but are not required to repay a share of spending over the benchmark.  Tracks two and three give ACOs a larger portion of savings under benchmark, but those ACOs are required to share the losses if they spend above the benchmark.

There are now two options starting July 1, 2019 and in subsequent years:

(1) BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk that, at the highest level, would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program, and

(2) ENHANCED track, based on the program’s existing Track 3, which provides additional tools and flexibility for ACOs that take on the highest level of risk and potential reward. Appendix A summarizes the characteristics of the participation options.

The BASIC track’s glide path offers an incremental approach to transitioning eligible ACOs to higher levels of risk and potential reward. The glide path includes 5 levels:  a one-sided model available only for the first two years to most eligible ACOs (ACOs identified as having previously participated in the program under Track 1 would be restricted to a single year under a one-sided model, but new, low revenue ACOs that are not identified as re-entering ACOs would be allowed up to three years under a one-sided model); and three levels of progressively higher risk in years 3 through 5 of the agreement period.

Under Levels A and B of the glide path, an ACO’s maximum shared savings rate under a one-sided model will be 40 percent based on quality performance, applicable to first dollar shared savings after the ACO meets the minimum savings rate. Under Levels C, D, and E of the glide path, an ACO can earn up to a maximum 50 percent sharing rate under a two-sided model, based on quality performance. The glide path concludes with a maximum level of risk that qualifies as an Advanced APM for purposes of the Quality Payment Program.

ACOs in the BASIC track glide path generally will be automatically advanced at the start of each performance year along the progression of risk/reward levels or could elect to move more quickly to a higher level of risk/reward, over the course of their agreement period. While the typical agreement period will be 5 years in duration, with 12-month performance years based on calendar years, ACOs entering an agreement period beginning on July 1, 2019, would participate in a first performance year of 6 months for the period from July 2019 – December 2019 plus 5 additional years in their first agreement period. For ACOs entering the BASIC track’s glide path for an agreement period beginning on July 1, 2019, the first automatic advancement occur at the start of performance year 2021.  Additionally, a new, low revenue ACO in the glide path that is not identified as a re-entering ACO will be permitted to choose to remain at Level B for an additional year, in exchange for agreeing to progress immediately to Level E at the start of the fourth performance year (or fifth, in the case of an agreement period starting on July 1, 2019).

The eligibility criteria for the BASIC track and ENHANCED track recognize differences in ACO participants’ Medicare FFS revenue and the experience of the ACO and its ACO participants with performance-based risk Medicare ACO initiatives. We will determine whether an ACO is a low revenue ACO versus a high revenue ACO, and whether an ACO is experienced or inexperienced with performance-based risk Medicare ACO initiatives. Based on stakeholder feedback, we have increased the threshold for low revenue ACOs to include ACOs with ACO participants’ total Medicare Parts A and B FFS revenue of less than 35 percent of the total Medicare Parts A and B FFS expenditures for the ACO’s assigned beneficiaries to capture additional ACOs, especially those that include clinics or smaller institutional providers, including rural ACOs. Ultimately, all ACOs are expected to transition to the ENHANCED track under the redesigned program. Low revenue ACOs are allowed additional time under lower-risk options within the BASIC track, while ACOs identified as high revenue are required to transition to the ENHANCED track more quickly.

Source: Centers for Medicare & Medicaid Services.

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