Skip to main content

Give MSSP Track 1 Advanced APM Status, Researcher Urges

Analysis  |  By Christopher Cheney  
   October 17, 2016

The most popular track of Medicare's largest accountable care organization program should be included under MACRA, the just-finalized payment system for physicians, a healthcare policy researcher says.

Net savings generated through the Medicare Shared Savings Program in 2014 were understated by at least $398 million, a researcher at the Harvard Medical School Department of Health Care Policy says.

"It is a pretty good guess and certainly not a wild overestimate," J. Michael McWilliams, MD, PhD, told HealthLeaders last week. He penned an opinion piece which was published last week in the Annals of Internal Medicine.

Launched in 2012, MSSP has drawn more healthcare provider participation than any other ACO program created by the Centers for Medicare & Medicaid Services. This year, 434 ACOs are participating in the payment program, providing care to more than 7.7 million Medicare beneficiaries, according to CMS.

On an annual basis, CMS sets a total spending benchmark for each MSSP ACO's attributed patient population. An ACO can earn a shared-saving bonus payment from CMS if total spending is significantly below the organization's benchmark. The bonus payments are reduced if an MSSP ACO falls short on the program's three dozen quality measures.

For 2014, MSSP generated $287 million in net savings for Medicare, according to a research paper McWilliams published last month in the Journal of the American Medical Association.

In last week's Annals of Internal Medicine opinion piece, the Harvard Medical School researcher wrote that the CMS data understates the net savings that MSSP generates for three reasons:

  1. It is likely that MSSP ACO contracts not only reduce healthcare spending on Medicare patients attributed to the ACO, but also on other patients who are treated by the ACO. "Such spillovers would have added upward of $126 million in savings to Medicare in 2014."
  1. In the year-to-year benchmarking process, CMS understates actual savings that MSSP ACOs generate. "ACO spending reductions—regardless of offsetting bonuses—reduce ACO benchmarks because they lower the spending growth rates used to update benchmarks each year."
  1. MSSP is designed to promote reduced fee-for-service spending by giving ACO's a bonus payment if they beat their spending benchmark. As a result, MSSP drives down spending rates for Medicare Advantage patients because Medicare Advantage payment rates are linked to local fee-for-service spending levels. In 2014, he estimates this indirect financial impact of MSSP cut Medicare Advantage spending about $272 million.

On Friday, CMS released the MACRA final rule (Medicare Access & CHIP Reauthorization Act of 2015).

MACRA Payment Reforms Finalized

The final rule does not recognize MSSP Track 1, which is the most popular track of the program because it has no downside risk, as an Advanced Alternative Payment Model. However, the final rule says CMS is considering creation of MSSP Track 1+ in 2018: "It would test a payment model that incorporates more limited downside risk than is currently present in Tracks 2 or 3 of the Shared Savings Program but sufficient financial risk in order to be an Advanced APM."

MACRA's new payment system for doctors is set to be implemented in 2019.

Before the release of the MACRA final rule, McWilliams said that CMS would miss a significant opportunity if the agency barred MSSP Track 1 ACOs from attaining Advanced APM status under MACRA.

MACRA Final Rule Eases Pay Changes, Initially

"Downside risk will not be appealing to ACOs with unfavorable benchmarks. This will include ACOs with spending above their regional average in the MSSP and smaller organizations that may not have the financial reserves to assume downside risk. These groups of ACOs have driven the bulk of the savings so far."

"Thus," he continued, "one could certainly argue that limiting the Advanced APM bonus payments to ACOs taking downside risk may do little more than increase Medicare prices for organizations that have not consistently demonstrated the ability to lower spending and that already negotiate higher commercial rates."

Christopher Cheney is the CMO editor at HealthLeaders.

Get the latest on healthcare leadership in your inbox.