On June 16, 2014, the Medicare Payment Advisory Commission (“MedPAC”) issued a report proposing five changes to legislation or Medicare regulations to improve the Medicare Shared Savings Program.  MedPAC proposed, in the near term, the Centers for Medicare and Medicaid Services (“CMS”) should improve the methods through which beneficiaries are attributed to accountable care organizations (“ACOs”).  “Improving the methods used for attribution of Medicare beneficiaries to ACOs, using prospective attribution, and having prospective benchmarks are essential for ACOs to have the certainty they need to invest the necessary resources for a successful program.”  MedPAC also proposed that “because ACOs have the responsibility for a defined population,” “quality measurement and evaluation can be simplified by moving away from process measures toward population-based outcome measures.”  This proposal is intended to remedy a quality measurement and evaluation process that MedPAC has identified as “overly complex and expensive.”

MedPAC also proposed certain long-term revisions to the ACO program, including encouragement of moving ACOs into two-sided risk models.  Noting that most ACOs currently operate under one-sided risk models, MedPAC opined that “moving to two-sided risk models for ACOs as they gain experience with the program will be important both to strengthen incentives to control costs and to make it possible for CMS to give ACOs more latitude for innovation.”  MedPAC further proposed that “regulatory relief to allow for innovative models of care . . . should be given to ACOs as they transition to two-sided risk in the MSSP program as well.”  Finally, MedPAC proposed that “ACOs should have the ability to reward their beneficiaries by waiving some or all cost sharing when ACO providers are used.”

A copy of MedPAC’s report is available here.

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