Changes designed to boost Medicare's largest accountable care program would result in greater federal savings, but the country's largest hospital association says CMS's risk-sharing deals need to be sweeter.
Three years after launching the Medicare Shared Savings Program, federal officials are trying to fine-tune their most popular accountable care model.
MSSP has grown from 27 inaugural participants in April 2012 to more than 330 participants this year. According to MSSP Year 1 performance data released last month, Medicare reaped about $383 million in shared savings.
In proposed rule changes set to be enacted in 2016, the Centers for Medicare & Medicaid estimates higher levels of MSSP shared savings if the revisions are implemented: "The proposed changes detailed in this rule would result in median estimated federal savings of $280 million greater than the $730 million median net savings estimated at baseline for calendar years 2016 through 2018."
Via email this week, CMS spokesman Alper Ozinal said MSSP has reached a significant milestone.
"The Shared Savings Program is designed to promote accountability for a specific Medicare fee-for-service (FFS) population, coordinate items and services under Medicare Parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery. While we are pleased with the first year results and the implementation of the program, we have identified certain policy modification proposals."
Ozinal says the proposed rule changes, which are open to public comment until Feb. 6, include the following goals:
- Growing ACO participation, especially from small and solo practices, as well as providers in underserved areas.
- Encouraging greater participation in "two-sided" risk tracks similar to Medicare's Pioneer ACO program, which features both gain and cost sharing.
- Simplifying operations for stakeholders, reducing market and beneficiary confusion, and promoting better information sharing.
- Continuing to provide national leadership for accountable care.
Risk Tracks Key to Running MSSP Railroad
The proposed MSSP rule changes would adjust the existing pair of risk tracks and create a third track.
Currently, Track 1 features upside-only risk with a 50% maximum gainsharing rate, and Track 2 features two-sided risk with a 60% maximum gainsharing rate. According to CMS, only five MSSP participants have chosen Track 2.
"Track 1 was designed to get organizations interested in ACOs, but Track 2 was supposed to be the serious program that would implement real changes to healthcare delivery," says Sarah Baumann, JD, a legal analyst at New York-based Wolters Kluwer Law & Business.
Now CMS is tweaking the MSSP risk tracks.
"Under the current regulations, Track 1 ACOs are expected to transition to Track 2 at the end of the three-year agreement period. CMS recognizes that many of those ACOs will need more time and experience before they are comfortable transitioning to Track 2 and may drop out of the program to avoid potential shared losses in Track 2. To prevent that, the agency is suggesting the elimination of the requirement for Track 1 ACOs to transition to Track 2 when their first agreement period ends," Baumann says.
The addition of Track 3 gives MSSP participants a potentially profitable but more perilous two-sided risk option.
"Track 3 is the new Track 2," Baumann says. "As proposed, Track 3 is now the riskier model for experienced organizations willing to expose themselves to higher risk for the chance to reap shared savings up to 75%… The shared loss rate would range from 40% to 75%; losses in excess of 15% would not be shared."
Track 3 also seeks to ease ACO concerns over the lack of beneficiary assignment under MSSP rules. The proposed rule changes include enhanced prospective assignment of patients to MSSP ACOs. "As in other models, beneficiaries would be assigned prospectively; however, unlike those in other models, Track 3 ACOs would not be forced to undergo retrospective reconciliation," Baumann says.
"This means that Track 3 ACOs would not need to account for beneficiaries who were not assigned to them at the beginning of the year but who received ACO services later in the year." The proposed rule changes are "an acknowledgment that the MSSP is a program in transition."
"MSSP was designed to be a landmark program that would change the healthcare landscape overnight. Organizations would take the plunge to form ACOs, improve the delivery and quality of care, and that would be the future of healthcare. CMS has realized that the MSSP was, instead, a chance for organizations long engaged in fee-for-service culture to get their toes wet in performance-based risk models."
"Only five ACOs took the plunge and entered Track 2 initially. The proposed rule is attempting coax hesitant organizations into accepting a pay-for-performance culture and to convince some of the braver ones to commit fully to coordinated care."
'They Really Didn't Go Far Enough'
The American Hospital Association says CMS needs to up the coaxing ante.
"They really didn't go far enough in this regulation," Ashley Thompson, VP and deputy director of policy at AHA, said this week.
The proposed changes are insufficient to encourage widespread adoption of the program, she says. "We're very pleased with the three-year renewal. We're not pleased they are proposing a lower sharing rate from 50% to 40%," Thompson said. "If anything, they may be moving in the wrong direction."
While calling the Track 3 option "very helpful" and welcoming enhanced prospective assignment, she says the proposed rule changes represent "a missed opportunity" for CMS. Thompson cited several areas where healthcare providers are looking for more robust reforms, such as stronger improvement in data sharing, more attainable financial thresholds, and allowing Medicare beneficiaries to "opt-in" as ACO-linked patients. "We have a long list of things that they could have done that they didn't do," she says.
Comment Sought on Financial Benchmarks
CMS is also mulling a shift in financial benchmark evaluation away from year-to-year performance improvement. Equally weighting the three years in the next round of the program could "reduce the disincentive to generate savings in any one year," Ozinal says.
Says Ozinal: "We seek comment on using regional FFS expenditures instead of national FFS expenditures in establishing and updating the benchmark, holding an ACO's historical costs constant relative to its region, and transitioning to using regional FFS cost data to make ACO benchmarks gradually more independent of the ACO's past performance and gradually more dependent on the ACO's success in being more cost efficient relative to its local market."
Replacing year-to-year improvement as an accountable care evaluation model would be a welcome change, but healthcare providers need more concrete coaxing from CMS before they will sign up to participate in MSSP, Thompson says. "They put forth options for changes in the benchmarks but didn't adopt changes," she says. "We are reviewing those options with our members."
Christopher Cheney is the CMO editor at HealthLeaders.