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CMS proposes to update, improve Medicare Shared Savings Program

Sunday, December 14, 2014

The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule intended to strengthen its Medicare Shared Savings Program (MSSP) for participating accountable care organizations. (ACOs). 

The program, created by the Affordable Care Act, provides incentives for providers to band together to coordinate care for Medicare beneficiaries in the fee for service program. Participating ACOs agree to be held accountable for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending. If they are successful in meeting the performance and savings benchmarks, they receive a share of the savings achieved. 

There are currently two types of ACOs in the program. One provides one-sided performance risk model that doesn’t penalize the ACO for not meeting the savings benchmarks but also pays the ACO a smaller percentage of the money saved. The other is a two-sided performance risk model that pays the ACO a greater percentage of the savings to the Medicare program if the benchmarks are met but penalizes the ACO if it performs poorly. ACOs that enter the MSSP in the one-sided track must eventually move to the two-sided model.

The proposed rule, issued December 1, 2014 incorporates lessons learned from experience in implementing the program as well as guidance issued since CMS’ first rule on the MSSP in 2011.  It would tweak the existing program in several ways, including:

  • ACOs would have more time to transition from the one-sided model to the two sided model

  • ACOs in the more risky, two sided model would not incur penalties for six years, although they’d also receive 40 percent in any earned shared savings in the latter three years, rather than the 50 percent in the first three years. Currently penalties kick in after the first three years.

  • The two sided performance risk model would be made more attractive, such as allowing more use of telehealth services.

  • A “track 3” model would be created to spur more providers to form ACOs and participate in the program.

  • There would be more emphasis on primary care services and performance based risk assessments; there would also be alternative methods of benchmarks.

  • The program would streamline data sharing and reduce administrative burdens.  

“Our intent is to encourage continued and enhanced stakeholder participation, to reduce administrative burden for ACOs while facilitating their efforts to improve care outcomes, and to maintain excellence in program operations while bolstering program integrity,” the proposed rule states.

There are currently more than 330 ACOs participating in the MSSP in 47 states, covering 4.9 million Medicare beneficiaries. In the first year of the program, 58 of them had spending below their benchmarks, saving Medicare $705 million and earning shared savings payments of more than $315 million.  Another 60 ACOs in the MSSP were below their benchmarks but not enough to earn shared savings, according to CMS’ announcement.

ACOs come in many different forms, including physician-led ACOs, payer-led ACOs and hospital/physician partnerships. Many ACOs do not participate in the MSSP. ACOs in the MSSP need to comply with CMS’ specific terms but do receive some breaks from compliance with the Stark self-referral law, the anti-kickback statute, the civil money penalties law and the antitrust laws. 

More physicians may be considering joining ACOs as a way to preserve or increase their revenue streams in light of the transition from fee for service and volume based care to coordinated care and value based programs. However, ACOs’ financial terms, infrastructure, data sharing requirements, exclusivity obligations, and governance vary greatly.  

CMS is accepting comments on the rule until Feb. 6. 

Here is the proposed rule:

Read the announcement:

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