CMS Establishes New Rules For Medicare Shared Savings Programs

The Centers for Medicare & Medicaid Services (CMS) recently issued a final rule addressing changes to the Medicare Shared Savings Program (MSSP) that included provisions relating to Accountable Care Organization (ACO) payments.  The rule will significantly affect current and new ACOs.  In a December 2014 proposed rule, CMS discussed making revisions to key policies adopted in the previous final rule that implemented the original regulations for the Shared Savings Program.  The current final rule states that the intent for the new program regulations is “to make refinements to the Shared Savings Program, to encourage continued and enhanced stakeholder participation, to reduce administrative burden for ACOs while facilitating their efforts to improve care outcomes, and to maintain excellence in program operations while bolstering program integrity.”

Rita Isnar, JD, a long time healthcare consultant, noted that “CMS has listened to public commentary and is working to increase the program’s success and sustainability.”  Isnar further noted that CMS seeks to provide greater certainty for program participants by “refining how an ACO’s financial benchmark is calculated.”  To do this, CMS is establishing what they hope will be a clear and achievable transition path to financial risk by engaging more patients and aligning the MSSP with other Medicare payment programs.  Catie Heidel, JD, another healthcare compliance expert, notes “CMS continues its commitment, through the MSSP, to move away from the fee-for-service (FFS) system, improve quality of care and lower costs.”  In furtherance of this goal, CMS has taken careful note on the evolution of the MSSP from its early pioneer days.  Heindel noted that CMS has responded with a slow incremental adjustment to the program through their rulemaking process to improve the program and expects that this trend will continue for a number of years.

The new rule codifies existing guidance intended to reduce administrative burden and improve MSSP program function by focusing on a number of key provisions.  These provisions include data-sharing requirements, eligibility, and other requirements for ACO participants, providers, and suppliers.  Other efforts were made to clarify key definitions, agreement requirements, and identification and reporting requirements.

In order to improve processes, CMS also: modified management of the ACO participant, provider, and supplier lists; updated the number of beneficiaries required for ACO application and eligibility; and updated the required processes for coordinating care.  Notably, CMS made modifications and clarifications regarding expectations in relation to ACO legal, governing body, and leadership/management structures.  Lastly, CMS issued further rules in relation to assignment methodologies, methodologies for determining ACO financial performance, and program integrity and transparency which will include additional public reporting, terminations, and reconsideration reviews.

Heindel, who has worked with ACOs, stated that “CMS will begin accounting for savings generated by the ACO in the prior performance period by adding the average per capita savings of the ACO over the three previous performance years to the rebased historical benchmark.”  Heindel further noted that this will “result in effectively increasing the financial benchmark for those ACOs that have done well and earned shared savings over the previous three years.”

There are a number of ways in which CMS proposes to achieve these goals including clarifying and codifying current ACO guidance related to participant agreements and resolving issues related to participant and provider/supplier lists.  CMS has added a process to renew the ACO 3-year participation agreement for an additional period.  In part, the process will include adding, clarifying and revising the beneficiary assignment algorithm – expanding the kinds of beneficiary identifiable data that will be made available to ACOs in various reports under the MSSP.  Also, the new process will simplify the process for beneficiaries, encourage greater ACO participation in risk-based models, reset benchmarks and implement the use of programmatic waiver authority to improve provider participation in Track 3 (by offering regulatory relief from requirements related to the Skilled Nursing Facility (SNF) 3-day stay rule).

Isnar believes CMS understands that more work is necessary due to their stated intent to address other modifications to program rules in future rulemaking and their interest in improving ACO willingness to take on performance-based risk.  CMS states they are considering modifying the assignment methodology to hold ACOs accountable for beneficiaries that have designated ACO practitioners as responsible for their care.  CMS is also weighing waiving the geographic requirement for the use of telehealth services and modifying the methodology for resetting benchmarks by incorporating regional trends and costs.

Isnar advises ACOs to “pay close attention to the modifications made to the shared governance requirements since CMS will provide further specifications related to ACO boards and organizations – a move that may require some ACOs to restructure board composition.”  Isnar expressed the belief that CMS intends to clarify these requirements to ensure that organizations make further efforts to ensure mitigation against existing or potential conflicts of interest.  Isnar stated that “historically, CMS has provided more latitude and flexibility; however, as this program matures, CMS appears to be moving towards placing additional constructs dictating how ACOs must establish their governing structure.”  With providing additional structure and expectations around the governing body, Isnar stated that “it appears that the objective is reduce potential conflicts of interest and to improve transparency, reliability and benefits for beneficiaries in the end.”