CMS Releases Proposal to Improve ACOs

The Centers for Medicare & Medicaid Services (CMS)  released a proposal it says will  “strengthen the Shared Savings Program for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and promoting transitions to performance-based risk arrangements.”  The agency said its proposed rule reflects input from program participants, experts, consumer groups, and the stakeholder community, at large. CMS is seeking to continue this important dialogue “to ensure that the Medicare Savings Program ACOs are successful in providing seniors and people with disabilities with better care at lower costs.”

ACOs encourage doctors, hospitals and other health care providers to work together to better coordinate care when people are sick and to keep people healthy, which helps to reduce growth in health care costs and improve outcomes. ACOs become eligible to share savings with Medicare when they deliver that care more efficiently, while meeting or exceeding performance benchmarks for quality of care.

The Shared Savings Program now includes more than 330 ACOs in 47 states, providing care to more than 4.9 million beneficiaries in Medicare fee for service. Recently, CMS announced first year Shared Savings Program (SSP) results:

  • 58 SSP ACOs held spending below their benchmarks by a total of $705 million and earned shared savings payments of more than $315 million
  • Another 60 ACOs had expenditures below their benchmark, but not by a sufficient amount to earn shared savings

CMS is seeking comment on a number of adjustments to improve the Medicare Shared Savings Program:

  • Providing more flexibility for ACOs seeking to renew their participation in the program. Many ACOs elect to enter the program under a one-sided risk model, where the organization participates in shared savings with the Medicare program, but does not take on additional performance-based risk. More experienced ACOs that are ready to share in financial losses in return for the opportunity for a higher share of savings may elect to enter a two-sided model. CMS is proposing to give ACOs the option of a longer lead time to transition to a two-sided performance risk model after their first agreement period. ACOs would have the opportunity to renew under the one-sided model for one additional agreement period. ACOs that enter the Shared Savings Program under the two-sided performance risk model would see no change.
  • Encouraging ACOs to take on greater performance-based risk and reward. CMS is proposing to create a new two-sided risk model, called “track 3,” which integrates some elements from the Pioneer ACO model, such as higher rates of shared savings and prospective attribution of beneficiaries – a list of assigned beneficiaries will be provided at the start of the performance year, and no further beneficiaries will be added to the list during the performance year.CMS seeks comments on a number of care coordination tools that would make two-sided performance risk models more attractive to ACOs, such as expanded use of telehealth, beneficiary attestation, and more flexibility around post-acute care referrals to help ACOs better coordinate care for beneficiaries using these services. CMS maintains these tools could help encourage participating providers to improve quality and care coordination for Medicare beneficiaries, which it said would result in better patient experiences and greater shared savings for both the ACO and the Medicare program.
  • Emphasis on primary care. CMS proposes to refine the way Medicare beneficiaries are assigned to an ACO to place greater emphasis on primary care services delivered by nurse practitioners, physician assistants, and clinical nurse specialists, and to allow certain specialists not associated with primary care to participate in multiple ACOs.
  • Alternative methodologies for benchmarks. CMS seeks comment on alternative methodologies that would make ACO benchmarks for determining shared savings and losses gradually more independent of the ACO’s past performance and more dependent on the ACO’s success in being more cost efficient relative to its local market. For example, CMS is considering whether shared savings received by an ACO should be added back to the benchmark in future performance periods.
  •  Streamlining data sharing and reducing administrative burden. CMS proposes to streamline the process for ACOs to access beneficiary claims data necessary for health care operations such as quality improvement activities and care coordination, while retaining the opportunity for beneficiaries to decline to have their claims data shared with the ACO.

A fact sheet provides more information about the proposed rule, which will be open to a 60-day comment period.

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Brad Ericson

Brad Ericson

Publisher at AAPC
Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.
Brad Ericson

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Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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