Five key takeaways from proposed changes to the Medicare shared savings program

In a recent ECG Management Consultants' blog post, they provide five key takeaways from proposed changes to the medicare shared savings program.

After a long delay in publishing guidance for the 2019 Medicare Shared Savings Program (MSSP) application cycle, CMS issued a proposed rule on August 9, 2018, featuring significant revisions to the program. These revisions are designed to move ACOs more rapidly toward accepting downside risk, which could represent a more aggressive posture from CMS under the Trump administration than has been experienced in past years. The following are five key takeaways from the proposed rule:

1. The ACO track system is being revamped.
In lieu of the current four-track system (Tracks 1, 1+, 2, and 3), CMS is proposing a system consisting of only two tracks (BASIC and ENHANCED). The ENHANCED track is effectively the same as today’s Track 3, whereas the BASIC track represents a staged transition, or “glide path,” from a one-sided to a two-sided model. To accomplish this, CMS is proposing that the term of its agreements with ACOs be extended from three years to five. Even with the five-year contract, however, first-time ACOs would have to make the transition to two-sided risk more rapidly than is required under the current system.

2. CMS is creating a potential lifeline for long-standing Track 1 ACOs.
The above changes notwithstanding, some existing Track 1 ACOs may find it easier to remain in the program. A National Association of ACOs survey released in May indicated that 71% of the 82 ACOs that had been participating in Track 1 since 2012 or 2013 were likely to drop out of the MSSP before 2019, when they would be forced to enter a two-sided risk model (Track 1+, 2, or 3). The proposed BASIC track would allow such long-standing Track 1 ACOs to remain in a one-sided risk model for up to an additional 18 months if they begin on July 1, 2019. Furthermore, the downside risk that these ACOs would have to take on in 2021 is less than what they would have had to assume previously. Not until 2023 would these ACOs have to take on risk equivalent to what is necessary in the current Track 1+. Due to these reduced downside risk requirements, more long-standing Track 1 ACOs may be willing to continue their participation in the MSSP.

3. Benchmark tweaks will help some ACOs and harm others.
CMS is proposing several tweaks to its historical benchmark calculations. For example, regional FFS expenditures would become a factor in calculating the benchmark for an ACO’s first performance period (to date, regional expenditures have not been incorporated into the benchmark calculation until the second performance period). Additionally, CMS is proposing to cap regional adjustments in a manner that should make the benchmarks more achievable for ACOs that are high-spending relative to others in their regions because, for example, they might have higher-acuity patient populations. These tweaks may make the MSSP more attractive to ACOs in higher-cost regions or to those with higher-cost patient populations than their neighbors, since their benchmarks would likely increase. The changes make sense from CMS’s perspective, because high-spending ACOs likely offer the greatest potential to generate cost savings. On the other hand, these adjustments could hurt ACOs in lower-cost regions or with low-cost patient populations, which would likely see their benchmarks decrease.

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