A proposed overhaul would require Medicare Shared Savings Program Accountable Care Organizations to move to two-sided risk models after two years.
A long-awaited update to the Medicare Shared Savings Program (MSSP) came Thursday, with a proposed rule from the Centers for Medicare & Medicaid Services.
The change would overhaul the way MSSP Accountable Care Organizations (ACO) share in the risks and rewards of their work, dramatically narrowing the time span and circumstances in which such organizations can qualify to participate without downside risk.
"It's time for the program to evolve," CMS Administrator Seema Verma said Thursday in a call with reporters.
Under the renovated program—which the administration has dubbed "Pathways to Success"—the number of tracks would be consolidated to two: one "basic," the other "enhanced."
The basic path would begin with up to two years of "upside-only" participation before three years of gradually increasing two-sided risk, as Verma explained in a Health Affairs blog. The fifth year in the basic track would meet the standard to qualify as an advanced alternative payment model (APM).
The enhanced track, meanwhile, would take on risk and qualify as an advanced APM immediately, offering consistent risk for the full five-year agreement, Verma added.
Some Dropouts Expected
Currently, MSSP ACOs are permitted to stay in the upside-only track for up to six years, so lowering that maximum down to two years is a significant change that could spook many organizations.
Survey results released last May by the National Association of ACOs (NAACOS) indicated that 71.4% of ACOs currently participating in the upside-only track would likely leave the program if they had to assume risk. (That figure includes 8.6% who said they were "completely likely" to leave, 20% who said they were "very likely" to leave, 11.4% who said they were "moderately likely" to leave, and 31.4% who said they were "slightly likely" to leave, NAACOS noted.)
Analysis conducted by the CMS Office of the Actuary suggests the policy changes being proposed could result in significantly fewer participating organizations. There are 561 MSSP ACOs participating this year, CMS said. There will be an estimated 20 fewer next year and 109 fewer a decade from now, according to projections released with the proposal.
If those projections hold, there will be 19.4% fewer MSSP ACOs in 2028 than there are today.
That drop can primarily be attributed to the fact that CMS expects the program to attract fewer ACOs in the future as a result of the current six-year upside-only window shrinking to two years, according to the proposed rule.
"However, the changes are expected to increase continued participation from existing ACOs, especially those currently facing mandated transition to risk in a third agreement period starting in 2019, 2020, or 2021 under the existing regulations, as well as certain other higher cost ACOs for which the capped regional adjustment would not reduce their benchmark as significantly as prescribed by current regulation," the proposal states.
The changes are projected to save Medicare more than $2.2 billion over the next decade, according to the proposed rule.
Criticism & Concern
While praising some components of the administration's proposed ACO overhaul, industry groups expressed reservations as well, especially about the truncated timeline for upside-only models.
Blair Childs, senior vice president of public affairs for Premier, issued a statement saying CMS fails to appreciate how much investment and adjustment is required for an organization to move to two-sided risk.
"Forcing providers to accept risk too quickly will deter participation," Childs said.
Premier took issue also with the government's claim that physician-led ACOs outperform hospital-led ACOs.
"We, therefore, disagree with treating physicians and hospitals any differently," Childs added.
NAACOS President and CEO Clif Gaus, meanwhile, released a statement that bashed the proposal as "misguided," saying it would likely drive many ACOs from the program.
"It's naïve to think that ACOs that aren’t ready can be forced to take on risk, given that the program is voluntary. The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value," Gaus said. "This would be a significant setback for Medicare payment reform efforts and would undermine implementation of the overwhelmingly bipartisan Medicare Access and CHIP Reauthorization Act (MACRA), which is designed to move providers into alternative payment models such as ACOs."
Not all stakeholders, however, panned the proposal.
Jeff Micklos, executive director of the Health Care Transformation Task Force—a collaboration of payers, providers, and other industry stakeholders—released a statement welcoming the "Pathways to Success" overhaul.
"This is an important step to promote value-based transformation and to push industry momentum forward. At first pass, the proposed rule presents novel ideas and careful thinking on how ACOs may better lower cost and improve patient outcomes," Micklos said. "Our members look forward to sharing their feedback and collaborating with CMS on advancing this leading value-based payment program."
And former acting CMS Administrator Andy Slavitt, who served under the Obama administration and has criticized some of the Trump administration's policies, tweeted his preliminary support: CMS is proposing changes to Medicare pay for value (ACO) models. They include patients more and push towards expanded incentives faster and add telehealth," Slavitt wrote. "At first look, they look positive to me."
Given the timing concerns associated with finalizing and implementing this rule, CMS proposed a six-month extension for current ACOs that have agreements set to expire at the end of this year. The proposal includes a special one-time start date on July 1, 2019, with an application period during the spring.
CMS recognizes the timing issues associated with the implementation of any final policies and the need for organizations to make decisions about participation in an ACO track. To that end, CMS proposes a 6-month extension for current ACOs whose agreements expire at the end of 2018, along with a special one-time July 1, 2019 start date that will have a spring 2019 application period for the new participation options.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.