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CMS Releases Final MSSP Rule for ACOs

Analysis  |  By Jack O'Brien  
   December 21, 2018

The Trump administration is aiming to implement an "overhaul" of the Medicare Shared Savings Program for accountable care organizations.

The Centers for Medicare & Medicaid Services released a final rule on the Medicare Share Savings Program (MSSP) for accountable care organizations (ACO) Friday morning.

The rule change, entitled "Pathways for Success," includes a reduction in the time an ACO can participate in MSSP without "taking accountability for healthcare spending," while also promising to increase the flexibility for performance-based risk ACOs to innovate.

Low revenue or physician-led ACOs will now have three years to participate in MSSP without financial accountability for spending, while other new ACOs will have two years, and existing one-sided ACOs will have one year. The shared savings rate will be set at 40% for ACOs that do not assume risk for costs and 50% for ACOs at "all levels of risk."   

CMS Administrator Seema Verma cited the Trump administration's push towards embracing value-based care and the "unsustainable trajectory" of the nation's healthcare system in announcing the rule change. Verma added that the rule is aimed at revising the incentives for ACOs to enter the program while still focusing on protections for taxpayers and patients during the transition to value-based care. 

"Therefore, it is incumbent on our agency to not just pay for healthcare services as they are billed but rather to ensure that patients are getting value for the care that is provided," Verma said in a press statement. "To this end, we are developing and testing new payment models to transform our payment system, and today’s changes to Medicare’s ACO program are a critical component of that transformation."

Related: MSSP Stakeholders Share Concerns With CMS

CMS' new rule will permit risk-based ACOs to provide incentive payments to beneficiaries who demonstrate measures to achieve good health, in order to better align patients with physicians. Additionally, CMS is revising the benchmarking guidelines for ACOs by accounting for "regional spending factors" to better assess performance in the program and better align ACOs with Medicare Advantage.

Tim Gronniger, former Chief of Staff and Director of Delivery System Reform at CMS during the Obama administration, greeted the announced rule in a statement to HealthLeaders .

“We’re glad to see CMS’s responsiveness to many important issues raised by Caravan Health and leading ACO participants," Gronniger said. "CMS has made an important change from the proposed rule in the shared savings rate. A sharing rate of 40 percent in the earliest years and 50 percent for the rest of the BASIC track under two-sided risk will help ease physicians into risk-bearing models with Medicare." 

"We expect that this final rule will allow health systems to move forward in delivering on the promise of Medicare’s ACO program – namely, improving quality while managing total costs.”

Related: Double the Savings? ACO Group Questions CMS Analysis of MSSP Performance

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.


CMS Administrator Seema Verma said the new rule will reduce the time an ACO can participate in MSSP without "taking accountability for healthcare spending."

The rule is projected to drive $2.9 billion in savings over the next decade.

The Trump administration expects the policy change to promote flexibility and innovation for performance-based risk ACOs.

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