CMS adjusts rules for ACOs affected by hurricanes, wildfires: 5 things to know

CMS issued an interim final rule Tuesday to adjust the Medicare Shared Savings Program to account for "extreme and uncontrollable circumstances" ACOs may have encountered during performance year 2017.

Here are five things to note about the interim final rule, which will take effect Jan. 20, 2018, with a comment period ending Feb. 20, 2018. 

1. CMS will determine an ACO was affected by an extreme or uncontrollable event if either (a) its legal entity is based in or (b) 20 percent or more of its assigned beneficiaries reside in counties designated as an emergency declared area during performance year 2017. CMS estimates 105 of the 480 ACOs currently meet this description. These "emergency declared areas" include those designated as a major disaster by the Federal Emergency Management Agency or as a public health emergency declared by the secretary of HHS. 

2. For those applicable ACOs, their minimum quality score will be set to equal the mean quality score of all MSSP ACOs in performance year 2017. "The mean reflects the full range of quality performance across all ACOs in the Shared Savings Program," CMS wrote. If the ACO is able to completely and accurately report on all quality measures, CMS will use whichever is higher — the ACO's quality performance score or mean quality performance score for all ACOs in the MSSP program. 

3. CMS will modify payment methodology for ACOs in Tracks 2 and 3, which face shared losses. For ACOs determined to be affected by disasters, the agency will account for the number of months disaster was declared and the percentage of assigned ACO beneficiaries residing in the disaster area. If an ACO was facing a $100,000 loss for the performance year but operated in a declared disaster area for three months with 25 percent of its patient population residing in said area, CMS would calculate payment as: $100,000 – ($100,000 x 0.25 x 0.25) = $100,000 - $6,250 = $93,750. 

CMS says this approach "balances the need to offer relief to affected ACOs with the need to continue to hold those ACOs accountable for losses incurred during the months in which there was no applicable disaster declaration and for the assigned beneficiary population that was outside the area affected by the disaster." 

4. ACOs will continue to be entitled to share in any savings they achieve in performance year 2017. CMS' calculations of savings and determination of shared savings payments will not be affected by new policies to account for natural disasters. 

5. Overall, CMS said the revised policy is unlikely to yield a significant economic impact on the MSSP. "The total increase in shared savings payments and total reduction in shared loss payments anticipated for ACOs impacted by the policies in this rule in 2017 is estimated to be approximately $3.5 million in total," the agency wrote. 

Read the interim rule in full. 

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