More flexibility, options under Medicare ACO final rule

For the most part, industry experts are pleased with the changes the Centers for Medicare & Medicaid made to the Medicare Shared Savings Program (MSSP), which provides more options and opportunities for accountable care organizations (ACOs) to participate in the risk-based shared savings initiative. But others say that some of the policy changes are lopsided and unfair to ACOs in the lower-risk options.

Jeffrey Spight, president of Collaborative Health Systems (CHS), which operates 25 MSSP ACOs--more than any other single organization--told FierceHealthcare in an exclusive interview that the final rule includes many of the changes the industry hoped for and it is clear that CMS recognized the underlying business model had to change in order for the program to survive. The agency, he said, used the opportunity in the final rule to capitalize on the momentum it has with the creation of 400 organizations and eight million beneficiaries.

[RELATED: CMS releases final rule on MSSP ACOs]

CMS late Thursday released the 590-page final rule, which aims to simplify rules for ACOs, reduce their administrative burdens and provide more flexibility within the risk-sharing options to encourage participation in the program.

The agency announced that it took into account the concerns raised after the release of the proposed rule and made several changes to its initial proposal. The final rule:

  • Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings
  • Announces CMS' intent to propose further improvements to the benchmarking methodology later this year 
  • Creates a new Track 3 option, based on some of the successful features of the Pioneer ACO Model, which includes higher rates (75 percent) of shared savings, the prospective assignment of beneficiaries and the opportunity to use new care coordination tools
  • Allows Track 3 participants to apply for a waiver to the the three-day stay Skilled Nursing Facility (SNF) rule for beneficiaries
  • Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries' care

The MSSP was created as part of the Affordable Care Act to encourage physicians, hospitals, and other healthcare providers to improve patient health and patient experience while reducing costs. and experience of care and to reduce growth in costs. The program is voluntary abut organizations must participate in the program for three years.

Although CMS announced the MSSP ACOs achieved savings and improved quality of care in its second year, most of the ACOs in the program lost money due to the cost of operations and collecting quality metrics, FierceHealthcare previously reported. 

Changes considered good news

The changes to the program announced in the final rule came as welcome news to most participating ACOs and industry experts who have said organizations would exit the program under the current requirements and the proposed changes.

Robert M. Wah, M.D., president of the American Medical Association, said in a statement that he commends CMS for recognizing there is no "one size fits all" approach to MSSP ACOs.

CHS' Spight told FierceHealthcare he was most pleased that CMS announced that it is committed to making changes to its financial benchmarking methodology, which it will finalize later this year,  and also backtracked on its initial proposal to require ACOs in the one-sided model to move to a two-sided risk, which would have been difficult for many of the organizations. The final rule maintains the one-sided risk model, which Spight said will allow in the learning stages of the process to remain in the program.

CHS, a division of Universal American, a publicly traded company, has invested heavily in the MSSP program. It initially created 35 MSSP ACOs but reduced that to 25 primary care physician-led organizations involving 5,000 physicians who care for 300,000 beneficiaries. During the first performance year of the program, 11 of its ACOs generated savings for CMS and three generated enough revenue to actually get a savings payment back. 

"The first version had challenges for the ACOs that were low in the benchmark range," he said, noting obstacles of high-cost geographical areas made it difficult for participating physicians to be successful.

Spight said the final rule will make it easier for ACOs to participate and success. "There were a number of structural problems with the program and they figured out how to streamline and ease some of it. It's going to make it easier to convince physician partners that this is a worthwhile exercise," he said.

But some advocate for further changes

Blair Childs, senior vice president, public affairs for Premier health alliance, said in a statement said that the organization was particularly pleased that CMS will reconsider its benchmarking methodology, and will allow providers to remain in the one-sided risk option without reducing the shared savings percentage, as well as provide more options through Tracks 2 and 3. 

However, Childs is concerned the agency was not willing to extend certain payment waivers to ACOs in the first and second tracks, a problem that he said CMS must address in the future. CMS only provides that option to participants in the new Track 3 highest-risk option.

"CMS has seriously handicapped providers who are working in good faith to reduce utilization and deliver care in the most appropriate setting," he said. "We also believe it is extremely concerning that CMS will not allow an increase in the acuity of the continuously enrolled population to improve an ACO's payment, but will consider acuity to reduce payment. This lopsided policy is unfair and needs to be changed to either allow a positive adjustment, or remove the negative adjustment."

Childs also said Premier is disappointed that CMS will not move forward with a beneficiary attestation process, but the alliance hopes it will include it in the 2017 physician fee schedule rule.

Because the final rule doesn't go far enough with its changes, Childs said he believes it will inhibit new providers from joining the program.

The National Association of ACOs (NAACOS) also released a statement commending CMS for making improvements to the program, but said the organization is disappointed that it didn't adopt some recommendations for the majority of ACOs in the lower, one-sided risk Track 1 option. The association believes the MSSP program can only succeed if it creates a sustainable business model for first-track participants.

"I remain skeptical that enough improvements have been made to Track 1 to sustain the growth we have been seeing and am concerned that large numbers of current ACOs are not ready to take on the higher risks of Track 2, 3 or CMMI's Next Generation ACO program," said NAACOS CEO Clif Gaus in the announcement.

To learn more:
- read the final rule (.pdf)
- here's the CMS announcement
- check out the AMA statement
- read the Premiere statement
- here's the NAACOs announcement

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