In what it describes as an “overhaul” of the program, CMS released this evening a proposed rule making changes to its Shared Savings program for Accountable Care Organizations (ACOs). Called “Pathways to Success,” the proposal significantly alters the ACO program that was established in 2011 and expanded in 2015. CMS estimates that these changes will save the federal government $2.24 billion over the next 10 years, primarily due to a $2.17 billion reduction in ACO net earnings. In addition to better-coordinated care, beneficiaries would receive reduced Part B premium payments of $310 million over the same period.

There are currently 561 ACOs participating in the Shared Savings program with approximately 10.5 million assigned beneficiaries, with the vast majority only participating in one-sided risk arrangements. Under the proposed changes, CMS expects this number to grow by 20 to 50 new ACOs per year.

The proposed rule is expected to appear in the Federal Register on August 17, 2018 and comments will be due no later than October 16, 2018.

CMS Consolidates Existing 3 ½ ACO Tracks to 2

The 2011 Shared Savings Program final rule included two tracks: a 1-sided model (Track 1) and a 2-sided model (Track 2). The 2015 final rule added an alternative 2-sided model (Track 3) with a higher reward for shared savings (as well as greater risk for shared losses). An additional Track 1.5 was also added. These tracks required a 3-year agreement period. CMS is now proposing to do away with Tracks 1 and 2 and replace them with a two-track system:

• BASIC track, in which ACOs would begin under a one-sided model and gradually transition to two-sided risk
  • Transition in year 4 of 5 for the first set of ACOs
  • Transition in year 3 of 5 for subsequent enrollees
• ENHANCED track (a renamed Track 3), which would continue to carry the greatest two-sided risk, albeit for a 5-year period.

Existing ACOs will have until July 1, 2019 to decide which track to transition into. All ACOs may annually choose a beneficiary assignment methodology (preliminary prospective assignment with retrospective reconciliation, or prospective assignment) as well as whether to opt into two-sided risk under the BASIC track.

	BASIC Track Year				ENHANCED Track
	1&2(Levels A&B)	3(Level C)	4(Level D)	5(Level E)
Shared Savings	Up to 25%, not to exceed 10% of benchmark	Up to 30%, not to exceed 10% of benchmark	Up to 40%, not to exceed 10% of benchmark	Up to 50%, not to exceed 10% of benchmark	Up to 75%, not to exceed 20% of benchmark
Shared Losses	None	Up to 30%, not to exceed 2% of revenue or 1% of benchmark	Up to 30%, not to exceed 4% of revenue or 2% of benchmark	Up to 30%, not to exceed revenue-based nominal amount stated in QPP or 1% more than expenditure-based nominal amount	1 minus final sharing rate (between 40 and 75 percent) not to exceed 15% of benchmark
Annual election to take on higher risk?	Yes	Yes	No, automatic transition	No, maxed out in BASIC track	No
Advanced APM status under QPP?	No	No	No	Yes	Yes

 

Changes to Benchmark Calculations Aim to Maintain Continued Program Participation and Improve Sustainability

CMS is proposing multiple updates to the calculation of the benchmark amounts, in an effort to strengthen financial incentives for ACOs to remain in the program, and to improve the sustainability of the program itself. Benchmarks are used to determine whether an ACO is reducing costs. The following updates are included in the proposal:

• Move benchmarks towards reflecting the costs of care deliver in the ACO’s region, instead of the ACO’s historical performance;
• Mitigate the effects of excessive positive or negative regional adjustment used to establish and reset benchmarks;
• Blend national and regional expenditure growth rates, with increasing weight placed on the national component of the blend as the ACO’s penetration in its region increases; and
• Use the full CMS-Hierarchical Condition Category (HCC) risk score to adjust benchmark performance to better account for certain health status changes.

If finalized, these changes would be used in the methodology to establish, adjust, update, and reset benchmarks for agreement periods beginning on July 1, 2019.

ACOs Could Elect Beneficiary Assignment Methodology Annually

The Bipartisan Budget Act states that ACOs in a track that provides retrospective beneficiary assignment will have the opportunity to choose a prospective assignment methodology. This would apply to agreement periods entered into or renewed starting January 1, 2020. CMS is now proposing to implement this provision of the act.

Under CMS’ proposal, beginning July 1, 2019, ACOs in the BASIC or EHANCED tracks can choose one of the following at the time of application:

• Prospective Assignment
• Preliminary prospective assignment with retrospective reconciliation

Additionally, CMS is proposing the ACOs be allowed to either retain or switch their beneficiary assignment methodology selection annually. ACOs would have to indicate they want to change methodology before the start of the performance year it wants to change for. The new selection would be effective for that year as well as the remainder of the agreement period, unless the ACO again chooses to change methodology. The rule clarifies that this proposal has no effect on the voluntary alignment process.

Patients May Designate a Primary Clinician That Does Not Provide Their Primary Care

CMS proposes to expand the definition of primary care services used in beneficiary assignment. Under current methodology, a beneficiary can select any provider who has a record on the Physician Compare website as their primary care clinician, but the beneficiary is only assigned to an ACO if they have chosen a provider who is a primary care physician (a primary care physician, nurse practitioner, physician assistant, or clinical nurse specialist). CMS will remove this requirement and revise this voluntary alignment policy so that the beneficiary can be assigned to the ACO provider they selected as his or her primary clinician, regardless of the provider’s specialty. If a beneficiary designates a provider outside the ACO as their primary care provider, the beneficiary will not be added to the ACO’s list of assigned beneficiaries for a performance year.  Additionally, CMS will also remove the requirement that a beneficiary must have visited at least one primary care service from an ACO provider within 12-month assignment window, reducing the burden on patients and providers by not requiring unnecessary care during a specified time period.

 Quality Performance Scoring Adjustment in Extreme and Uncontrollable Circumstances

CMS proposes to extend the automatic extreme and uncontrollable circumstances policies that are previously established in the Shared Saving Program and reduce the amount of shared losses owed by ACOs affected by a disaster. In 2019, CMS will use 12 months of expenditure data to determine quality performance for two 6-month performance periods (from January 2019 through June 2019, and from July 2019 through December 2019). ACOs affected by a disaster in any month in 2019, regardless of whether the ACO is actively participating in the Shared Saving Program at the time of the disaster and if 20 percent or more of the ACO’s assigned beneficiaries reside in an area that is affected by an extreme and uncontrollable circumstance,  will be scored on an alternative methodology to determine the quality performance score for the 2019 quality reporting period. For ACOs that are  in the 6-month performance period and affected by a disaster during CY 2019, CMS will determine shared losses for the ACO over the full calendar year and adjust the ACO’s losses for the 6-month performance period. CMS discusses application of this proposed rule to BASIC track and Track 3 ACOs under performance-based risk.

 CMS Makes Proposals for Beneficiary Incentive Programs in ACOs

CMS is proposing to allow ACOs that participate under certain two-sided models to establish beneficiary incentive program for certain beneficiaries receiving qualifying primary service care to incentivize healthy decisions and behaviors. ACOs will be allowed to establish a program beginning no earlier than July 1, 2019. ACOs that are approved for a beneficiary incentive program will conduct it for at least 1 year, as required by statute. However, ACOs that start an incentive program on July 1, 2019 would have to commit to an initial term of 18 months. CMS is proposing to allow an ACO to apply to establish the incentive program during the application cycle prior to the performance year the ACO wants to begin the program. In order to continue offering its program, CMS is proposing that the ACO would be required to certify this intent and that the program meets all applicable requirements.

For eligibility, CMS is proposing that any beneficiary assigned to an ACO that is participating in Track 2; Levels C, D, or E of the BASIC track; or the ENHANCED track may receive the incentive program. CMS is also proposing a $20 incentive payment limit, which will be updated annually based on the CPI. Additionally, CMS is proposing that an incentive payment be given to a beneficiary each time they receive a qualifying service and that the ACO legal entity give the incentive payment directly to the beneficiary. The rule proposes to prevent incentive payments in the form of cash. CMS is also proposing that records of the program be maintained and that ACOs publicly report the total number of beneficiaries who receive an incentive payment and the total number of incentive payments given.

Repayment Mechanism

ACOs entering a two-sided model are required to demonstrate that they have a repayment mechanism in place by which they can repay any losses for which they are responsible. CMS proposes to apply this requirement to both the BASIC and ENHANCED tracks, but in the interest of increasing participation CMS will only require demonstration of an ability to repay under the lower of a revenue-based or a benchmark-based repayment system in the BASIC track. This can be demonstrated by placing funds in escrow, obtaining a surety bond, or establishing a line of credit. In the ENHANCED track, the minimum repayment mechanism amount will be 1 percent of Medicare Part A and B fee-for-service expenditures in the most recent calendar year. This repayment amount will be recalculated annually while the ACO is in a two-sided model, but the ACO need only revise its repayment plan if the amount has increased by more than 10 percent or $100,000.

New Rules Proposed for Renewing and Reentering ACOs

CMS proposes definitions for renewing and reentering ACOs. Currently, no such definitions exist. The proposed definitions are as follows:

• Renewing ACO: “an ACO that continues its participation in the program for a consecutive agreement period, without a break in participation, because it is either:
  • an ACO whose participation agreement expired and that immediately enters a new agreement period to continue its participation in the program; or
  • an ACO that terminated its current participation agreement and immediately enters a new agreement period to continue its participation in the program.”
• Reentering ACO: “an ACO that does not meet the definition of a “renewing ACO” and meets either of the following conditions:
  • Is the same legal entity as an ACO that previously participated in the program and is applying to participate in the program after a break in participation, because it is either:
    • (a) an ACO whose participation agreement expired without having been renewed; or
    • (b) an ACO whose participation agreement was terminated;
  • Is a new legal entity that has never participated in the Shared Savings Program and is applying to participate in the program and more than 50 percent of its ACO participants were included on the ACO participant list, of the same ACO in any of the 5 most recent performance years prior to the agreement start date.

Secondly, CMS proposes to revise the eligibility requirements for both types of ACOs. CMS will remove the required “sit-out” period to allow ACOs to transition to new agreement options. It encourages ACOs to minimize the gap in time between its existing and new agreements to maintain the program policies.

Lastly, CMS proposes a number of technical changes applicable to both types of ACOs. It will refer to agreement changes as “applications” rather than “renewal requests” to include reentering ACOs. It will require ACOs in two-sided models to reapply to participate in two-sided models. It will change the code of federal regulations to align with requirement that ACOs demonstrate its ability to repay losses if necessary. Finally, it will update evaluation criteria to consider the ACO’s history of compliance, shared losses owed, and deficiencies corrected. CMS will use a 5 performance year look back period.

Termination Notice Shortened, but Two-Sided Risk ACOs Could be Liable for Pro-Rated Shared Losses

Current rules require ACOs to provide at least 60-days notice before they terminate participation in the program. However, this timeframe means that ACOs wishing to terminate participation effective at the end of a calendar year will only have access to two quarters of performance data on which to make a decision. CMS is proposing to shorten the notice requirement to 30 days, which would provide ACOs additional time, as well as access to three quarters of performance data, before making a decision.

Additionally, two-sided risk ACOs that voluntarily terminate participation prior to the end of a performance year are not held liable for losses, but are also not eligible for savings. In order to prevent ACOs projected to have shared losses from terminating participation early in order to avoid financial liability, CMS is proposing that ACOs that terminate after June 30 of a performance year will be liable for a pro-rated portion of shared losses. Furthermore, the prorated amount will apply to any month in which the ACO was active for at least one day. For example, if an ACO terminates participation effective July 1, the ACO would be liable for 7/12 of the shared losses (if any). CMS hopes that this change will prevent gaming as well as encourage ACOs to continue to control spending and report quality even after they leave the program, in order to reduce the amount of shared losses owed.

ACOs Required to Use Certified Electronic Health Record Technology (CEHRT)

As of January 1, 2019, CMS propose to require ACOs to certify that eligible clinicians participating in the ACO use CEHRT to document and communicate clinical care to their patients or other providers. For existing models that do not qualify as an Advanced APM, this threshold is 50%; for an existing APM to be considered an Advanced APM the threshold is 75%. If this proposal is finalized, CMS would use it to replace the current use of Certified EHR Technology quality measure to reduce burden on clinicians.

BASIC, ENHANCED Track ACOs Would be Eligible for SNF 3-Day Waiver

Current MSSP policies allow ACOs participating in the current Track 1+ Model to apply for a waiver that allows beneficiaries to transfer to a skilled nursing facility with an inpatient stay of fewer than three days. CMS is proposing to expand waiver availability to all ACOs electing to enter either the newly proposed BASIC or ENHANCED tracks, starting July 1, 2019. The agency hopes that this expansion will support ACOs in coordinating care across different care settings and meeting the needs of their patient populations.

Telehealth Restrictions Significantly Relaxed for ACOs

Under the Bipartisan Budget Act of 2018, ACOs are allowed to provide telehealth services that would not meet ordinary Medicare telehealth standards. In accordance with this statutory change, beginning in 2020 CMS proposes that for telehealth services furnished by physicians in an ACO, the originating site for a telehealth service may be a beneficiary’s home, and the geographical limitations are waived.

Request for Information on Collaboration w/ Part D plans

CMS is asking for information from stakeholders on how Shared Savings programs, and other ACOs, can work together with Part D sponsors to improve coordination of pharmacy care for Medicare beneficiaries while reducing cost.  CMS wants to hear from any ACOs that are already doing this to understand what barriers there are and ways they could be mitigated. Further CMS asks for ideas related to how agreements between an ACO and a plan might be structured, what financial incentives would entice plans to participate and ways to encourage robust data sharing.

Comments Sought on Meaningful Measures

CMS is looking to update the program’s quality measure set as part of the agency’s Meaningful Measures initiative for addressing opioid epidemic and addition by adding three new measures. The agency seeks comments on addition of any other measures related to aspects of opioid use or opioid use disorder treatment and suggestions on any information and aggregate data that would be useful to ACOs to combat opioid misuse in their beneficiary population.