On August 9, 2018, CMS published the long-awaited Pathways to Success proposed rule. CMS Administrator Seema Verma published a related article on the Health Affairs Blog. The proposed rule would usher in significant changes for Accountable Care Organizations (ACOs). Groups of providers, such as doctors and hospitals, can join together to form an ACO and be held accountable for the quality and cost of care provided to a group of assigned beneficiaries. If the ACO meets quality and savings thresholds, they are eligible to share a portion of the savings with CMS. As a result of the Affordable Care Act there have been several ACO initiatives since 2012:
- Pioneer ACO Model;
- MSSP Track 1, 2, and 3;
- Track 1+ Model;
- Next Generation ACO Model; and
- Comprehensive End-Stage Renal Disease Care Model.
Additional information about these ACO programs may be found here. CMS results have shown that two-sided model ACOs have performed better over time than one-sided model ACOs. In a one-sided model, the ACO may receive a share of any savings below their benchmark. An ACO participating in a one-sided model will not be responsible for repayment of any losses if their spending exceeds the benchmark. On the other hand, an ACO participating in a two-sided model may be eligible to share in a larger portion of savings but is also required to share in losses where their spending exceeds the benchmark. CMS states that ACOs in Track 1 that have been generating losses while having access to certain fraud and abuse waivers as a result of their participation “may be encouraging consolidation in the market place, reducing competition and choice for Medicare FFS beneficiaries”. In January, CMS announced that 561 ACOs were participating in MSSP, covering 10.5 million Medicare fee-for-service beneficiaries. 58 percent of ACOs were physicians, hospitals and other facilities, 30 percent were physician only, and 12 percent were federally qualified health centers or rural health clinics. Presently, 82 percent (460 of 561) of MSSP ACOs participate as upside-only Track 1 ACOs.
Proposed changes include:
- Retiring Track 1, Track 2, and Track 1+ and creating two new tracks: BASIC and ENHANCED. ACOs currently participating in Track 1, Track 2, or Track 1+ may finish their current agreement or terminate and apply to immediately participate in a BASIC or ENHANCED track. A comparison of BASIC and ENHANCED track characteristics can be found in Appendix A of the CMS fact sheet;
- The BASIC track would use a “glide path” to permit ACOs to use a one-sided model with incremental phasing into higher levels of risk. An ACO would have two years (Levels A and B) of upside-only risk and then gradually move to increased shared risk (Levels C, D, and E). Once the ACO is at the highest level of risk, they would qualify as an Advanced Alternative Payment Model under the Quality Payment Program;
- Renaming Track 3 the ENHANCED Track. The ENHANCED track would provide two-sided risk immediately and qualify as an Advanced APM;
- Agreement periods of five years instead of the current three year agreement periods;
- ACOs with experience would be limited to participation in the higher-risk options. To date, ACOs have been able to participate in MSSP Track 1 with upside-only risk for two agreement periods (six years). The proposed rule would limit upside-only risk to two years, and only a single year for ACOs that have previously participated in the MSSP;
- The BASIC and ENHANCED tracks would permit ACO selection of prospective assignment or preliminary prospective assignment with retrospective reconciliation prior to the start of each agreement period. An ACO would be able to change their selection for each subsequent performance year;
- Permitting eligible physicians and practitioners in ACOs in a performance-based risk track to receive payment for telehealth beneficiaries, even where geographic limitations have not been met;
- Allowing ACOs with performance-based risk under either prospective assignment or preliminary prospective assignment with retrospective reconciliation to use the existing skilled nursing facility 3-day rule waiver;
- Requiring that a written notice be provided to beneficiaries at their first primary care visit during a performance year. The notice would inform beneficiaries that they are in an ACO and what it means for the care they receive;
- Permitting beneficiaries to choose from a broader range of ACO professionals as their “primary clinician”;
- Benefit incentive programs for certain two-sided ACOs. The incentive payment could be up to $20 for each qualifying primary care service received by the beneficiary;
- Require a certain threshold of an ACO’s eligible clinicians to use Certified Electronic Health Record Technology;
- Holding ACOs participating in the two-sided model accountable for partial year losses if they leave the program more than mid-way through a performance year and terminating ACOs with a record of poor financial performance; and
- Seeking comment on a beneficiary “opt-in” methodology whereby the beneficiary could choose to be attributed to an ACO.
CMS is proposing a mid-year start date of July 1, 2019 for the first agreement period under the BASIC and ENHANCED tracks. ACOs participating in this initial agreement period would have an agreement period of five years and six months. ACOs that have a participation agreement ending December 31, 2018 would be allowed to extend their agreement through June 30, 2019. The ACO could then apply for a new agreement under the BASIC or ENHANCED tracks.
The agency projects savings from the proposed changes would save Medicare $2.24 billion over the next decade. They also predict a decrease in participation of 109 ACOs in 2028.
Comments must be submitted to CMS by October 18, 2018 and may be submitted here.