On December 1, 2014, CMS issued a proposed rule that would make certain changes to the regulations governing the Medicare Shared Savings Program (Shared Savings Program) that were originally promulgated in November 2011. Congress in Section 3022 of the Affordable Care Act established the Shared Savings Program, which incentivizes hospitals, physicians, and other providers to create Accountable Care Organizations (ACOs). ACOs strive to improve the health and experience of care for individuals and reduce the rate of growth in health care spending. If they are successful, ACOs receive a share of the savings of Medicare Parts A and B expenditures.

The proposed rule would revise the original Shared Savings Program regulations in certain respects, including the following:

(i)    Provide more flexibility for ACOs that seek to renew their participation in the Shared Savings Program. The regulations currently require that ACOs participating in Track 1 of the Shared Savings Program (sharing savings but not losses) may continue their participation after their initial three-year agreement period but only if they enter a performance risk-based (two-sided) track. CMS proposes to give ACOs the option of participating in one additional agreement period under Track 1, but at a lower shared saving rate than the previous agreement period. This new policy would be available to certain ACOs, including those that have met the quality performance standard in at least one of the first two years and have not generated losses that exceed the negative Minimum Savings Rate (the minimum savings an ACO must achieve to be eligible to receive any shared savings) in both of the first two years of the previous agreement period.

(ii)   Provide more emphasis on primary care. Under the current regulations, Medicare fee-for-service beneficiaries are assigned to a particular ACO, if at all, based on a two-step beneficiary assignment process (after satisfying the statutory requirement by identifying beneficiaries who have received a primary care service from a physician who is an ACO provider/supplier in the ACO) based on the plurality of primary care services furnished by (1) primary care physicians, and by (2) specialist physicians, nurse practitioners, physician assistants, and clinical nurse specialists. CMS proposes to refine the way Medicare fee-for-service beneficiaries would be assigned to an ACO by placing more emphasis on primary care services furnished by non-physician practitioners and enabling certain specialists not associated with primary care to participate in multiple ACOs. Specifically, CMS proposes to revised Step 2 of the beneficiary-assignment methodology process to remove certain specialty types whose services are not likely to be indicative of primary care services. In addition, CMS proposes to include in Step 1 nurse practitioner, physician assistant, and clinical nurse specialist primary care services.

(iii)  Encourage ACOs to assume greater performance-based risk. CMS seeks to encourage ACOs to take on greater performance-based risk and reward. CMS proposes to implement an additional performance risk-based model (Track 3), which would enable an ACO to receive a higher sharing rate than ACOs participating in Tracks 1 and 2. In addition, CMS would prospectively assign Medicare beneficiaries to the ACO rather than preliminary assigning beneficiaries to ACOs and then performing a retrospective reconciliation. No additional Medicare beneficiaries would be assigned to the ACO during the performance year.

Read the proposed rule. CMS has published a fact sheet discussing the proposed rule. This proposed rule is scheduled to be published in the December 8th Federal Register and public comments are due by February 6, 2015.

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