Medicare Compliance & Reimbursement

Hint: Expect reporting to decrease while financial risks increase.

The Medicare Shared Savings Program (MSSP) promotes the principles of quality care, clinical coordination, and cost sharing utilized through Accountable Care Organizations (ACOs). New policy proposals suggest some groups need to carry their fair share of the weight instead of only reaping the rewards of participation. And the suggested realignments and requirements could really hurt struggling ACOs bottom lines.

Definition: The MSSP encourages federal healthcare savings and enhanced provider reimbursement through cooperation to provide optimal patient care. Falling under the jurisdiction of the MSSP, ACOs are defined as the voluntary and coordinated efforts of a group of clinicians, suppliers, and hospitals to offer “high-quality care” to Medicare beneficiaries, suggests CMS guidance.

Context: Last month, CMS published a proposed rule in the Federal Register that streamlines ACO participation guidelines as well as altering quality measure reporting and benchmarking to cut down on federal healthcare costs. The proposal, with the tagline “Pathways to Success,” moves the MSSP forward with “five goals: Accountability, Competition, Engagement, Integrity, and Quality,” says a CMS release on the proposed rule.

Though better data-sharing, increased communication, and more patient involvement are the focus of the proposals, some of the updates and changes make joining an ACO more risky and don’t necessarily translate to financial rewards.

CMS acknowledges ACO change-ups outlined in the Bipartisan Budget Act of 2018 (BBA), too. More telehealth options, patient-centered programs, and voluntary election on the part of the beneficiary are all part of the agency’s plan.

“Medicare cannot afford to support programs with weak incentives that do not deliver value,” said CMS Administrator Seema Verma in a release on the MSSP proposal. “ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.”

See the proposed rule at www.federalregister.gov/documents/2018/08/17/2018-17101/medicare-program-medicare-shared-savings-program-accountable-care-organizations-pathways-to-success.

Here’s Why CMS Wants to Upgrade ACOs

In 2018, “460 of the 561 or 82 percent of all ACOs in the Shared Savings Program [MSSP]” weren’t taking on enough risk and actually increased Medicare spending, according to a CMS news brief. In a nutshell, one-sided ACOs are reaping the rewards of the MSSP, but they aren’t settling their losses — and CMS is covering those costs at a great expense to Medicare. The proposals hope to eradicate this issue and make ACOs more financially accountable and competitive with new standards that echo other recent agency initiatives on quality, interoperability, patient engagement, and opioid addiction.

CMS also “observed that low revenue ACOs (which are typically composed of physician practices and rural ACOs) outperform high revenue ACOs (typically ACOs that include hospitals),” indicates the fact sheet on the MSSP proposed rule. Moreover, this past year’s statistics highlight that two-sided models with minimal risk allow for a more rapid succession to performance-based paths. And that’s why the agency wants to ensure that low-revenue ACOs and rural providers have a “pathway to transition from a one-sided model to more modest levels of performance-based risk that recognize their having less control over the Medicare FFS expenditures for their assigned beneficiaries,” says the fact sheet.

Cost: “CMS estimates the proposed rule will result in $2.24 billion in federal savings over the next ten years,” advise attorneys Christine Clements, Vinay Bhupathy, and Patrick Callaghan of national law firm Sheppard, Mullin, Richter & Hampton LLP in online analysis on the Sheppard Mullin Healthcare Law Blog.

Warning: But Clements, Bhupathy, and Callaghan warn that the savings may be shortsighted as many ACOs won’t be able to meet the new standards. “CMS expressed a lack of concern about ACOs in one-sided risk models exiting the program because those ACOs have led to program losses overall” despite advice from a study done by the National Association of ACOs (NAACOS) on the issue, the attorneys note. “The findings of the NAACOS survey suggest CMS may be underestimating the magnitude of the exodus that will occur should the proposed rule be finalized,” they write.

Next Generation ACO Spurs MSSP Proposals

The feds also point to success with the risk-heavy Next Generation ACO model as reasoning for the MSSP turnarounds. That particular model “generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries,” according to a MLN Connects release.

“These results provide further evidence that ACOs succeed under two-sided risk,” stressed Verma in a release. “ACOs in the Next Generation Model are being held accountable with strong financial incentives and are provided with substantial flexibility and regulatory relief.”

She added, “They are delivering value and providing quality care to patients and taxpayers even in their first performance year, and we believe that these results are achievable for other ACOs under similar incentives.”

Due to the late summer proposal, CMS plans to extend the sign-up period for current ACOs whose contracts come due on Dec. 31, 2018. “CMS proposes a 6-month extension for current ACOs whose agreements expire at the end of 2018, along with a special one-time July 1, 2019 start date that will have a spring 2019 application period for the new participation options,” informs the release on the MSSP changes.

Caveat: Not everyone is convinced that the proposals will benefit patients and encourage providers to double up on risk. In fact, several organizations have delivered statements that refer to the upfront costs and other infrastructure factors that must be addressed if the changes are to be successful.

“The proposed rule fails to account for the fact that building a successful ACO, let alone one that is able to take on financial risk, is no small task,” reminds the Tom Nickels, executive vice president of the American Hospital Association (AHA) in a statement on the MSSP proposed rule. “It requires significant investments of time, effort and finances. Hospitals and health systems must build upon their current infrastructure, which entails forming new and different contractual relationships and incentivizes successful strategies.”

Resource: Review the CMS fact sheet on the MSSP proposed rule “Pathways to Success” at www.cms.gov/newsroom/fact-sheets/proposed-pathways-success-medicare-shared-savings-program.