As we briefed in early December, CMS published a proposed rule (Proposed Rule), at 79 Fed. Reg. 72760, containing many changes to the Medicare Shared Savings Program (MSSP) that, if adopted, will have a significant impact on existing accountable care organizations (ACOs) and those organized in the future. CMS has requested comments on many aspects of the Proposed Rule, which must be submitted by February 6, 2015.

Norton Rose Fulbright will be presenting a webinar on the Proposed Rule on January 13, 2015. However, in light of the comment-submission deadline, we thought it would be helpful to provide our initial thoughts on the potential impact of the Proposed Rule on (1) ACOs that currently participate in the MSSP, including issues specific to high-performing ACOs and (2) health care providers that are considering forming and/or participating in new ACOs.

Given that CMS will likely make significant changes under the final MSSP rule, ACOs currently participating in the MSSP, as well as health care providers that are considering forming and/or participating in an ACO that will apply to participate in the MSSP, will want to assess the impact of the Proposed Rule and work with legal counsel to submit comments to CMS.

Submission of comments and proposals

  • CMS has made clear that it values the MSSP and it is at risk of having a large number of ACOs drop out if it doesn’t change the MSSP’s current structure. CMS has asked for comments on many aspects of the Proposed Rule, and on a number of important issues, has provided several options to be considered. In light of CMS’s recognition that the MSSP’s structure needs to be changed, it appears that comments from ACOs, particularly those that have performed well, will be carefully considered by CMS in writing the final MSSP rule.

Benchmarking for shared savings

  • CMS recognizes that the current benchmark methodology punishes high-performing ACOs because good performance in a previous year makes it harder to achieve shared savings in the current year. CMS has proposed several new approaches for benchmarking and is requesting comments on those approaches. Getting the current benchmark methodology changed is essential for high-performing ACOs to continue to be properly rewarded for their performance under the MSSP.

Selection of shared savings track

  • CMS wants ACOs to move to two-sided, performance-based risk, and it believes that high-performing ACOs will do so if appropriate changes are made to the MSSP. As such, CMS has proposed several changes to the shared savings track models. Most important are (1) extending the opportunity to continue in Track 1 (opportunity for shared savings with no downside risk) in the second three-year term of participation but at a reduced shared savings potential (40%), and (2) creating a new Track 3, which offers a higher maximum shared savings percentage (75%), but with increased downside exposure.
  • In addition to analyzing the direct financial implications of Track 3, organizations might also consider that there are several proposed changes to the MSSP that CMS is considering making unique to Track 3, meaning if an ACO is not in Track 3, the ACO and its participants do not get the benefit of these changes. Examples of potential Track 3-only changes include prospective attribution of beneficiaries and waiver of certain payment requirements. With prospective attribution, the ACO will know who its attributed beneficiaries are at the beginning of the period and can target their needs, which allows a more efficient use of resources. The waiver of certain payment requirements would allow the ACO and its participants  to re-configure their care processes. If CMS limits these types of changes to Track 3 ACOs, then being a Track 3 ACO or a participant in one may allow an organization to differentiate itself with regard to operational efficiency from others in its market who are not.

Payment requirement waiver

  • In encouraging ACOs to move to risk, CMS recognizes that greater flexibility in care processes may be desirable. Two notable examples of what CMS is considering are (1) waiver of the 3-day SNF rule and (2) the “homebound” requirement for home health services. Organizations may want to consider the impact of these potential changes on their operations. If CMS were to limit these waivers to only Track 3 ACOs, they could also be used as potential market differentiators, since only a Track 3 ACO and its participants would be able to use the waivers and their advantages; market competitors that are not in a Track 3 ACO could not. CMS is also open to considering the waiver of payment requirements for other types of non-acute services.

Additional flexibility for recommending affiliated post-acute services

  • CMS is considering for ACOs and their participants a modification of the current restrictions about what discharge planners can say to patients about post-acute care providers, and allow the planners to make recommendations about specific providers, presumably who are of high quality and participate in the ACO. This may create opportunities for ACOs and their participants. For example, it could encourage the development of stronger relationships between acute care and post-acute providers, thereby facilitating better care and more efficient use of resources.

Data sharing

  • CMS recognizes the value of clinical data in treating Medicare beneficiaries and other patients. To encourage ACOs to take more risk, CMS is considering expanding the data it would make available to ACOs about attributed beneficiaries and expanding the universe of Medicare beneficiaries for which an ACO may obtain data. ACOs should review their current clinical data set and determine if care processes could be improved through access to more clinical data from CMS. If so, the organization could consider submitting a comment to CMS about the benefits of the additional data.

Once implemented the final MSSP rule will have a significant impact on ACOs and their participants. CMS has actively solicited comments to the Proposed Rule and suggested that they will be carefully considered. By providing comments, ACOs have an important opportunity to shape the final MSSP rule.

If you have any questions, please contact Bernie Duco or Chris Kanagawa.

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