August 16, 2018

CMS Proposes Major Changes to Medicare's ACO Program

On August 9, 2018 the Centers for Medicare and Medicaid Services (CMS) released a proposed rule on its proposed changes under the Medicare Shared Savings Program (Shared Savings Program), for Accountable Care Organizations (ACOs) for 2019. It provides for a 60-day comment period. The MSSP providers of services and suppliers that participate in an ACO continue to receive traditional Medicare fee-for-service (FFS) payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. The policies included in this proposed rule would provide a new direction for the Shared Savings Program by establishing pathways to success through redesigning the participation options available under the program to encourage ACOs to transition to two-sided models (in which they may share in savings and are accountable for repaying shared losses). CMS proposes to eliminate Track 1 and Track 2 models and introduce a new Basic track which forces ACO’s to move towards taking on risk and offers a gradual phasing-in of the amount of risk they assume. CMS feels that not enough ACOs have elected to move out of Track 1 (which is sharing in savings only) and into Track 2 (which begins to take on risk) and they say that the program must move forward with its program goals. Also it would allow for more ACOs to qualify to participate and Advanced APMs under the Quality Payment Program. Track 3 would become an Enhanced Track where the highest level of risk is taken and thus the highest level of sharing in the savings.

CMS’ data shows that ACOs in two-sided models perform better over time than one-sided model ACOs, low revenue ACOs, which are typically physician-led, perform better than high revenue ACOs, which often include hospitals. CMS says that they also want to promote free-market principles by encouraging the development of physician-only and rural ACOs in order to provide a pathway for physicians to stay independent, thereby preserving beneficiary choice.

CMS seeks comment on approaches to developing the program’s quality measure set in response to the agency’s Meaningful Measures initiative as well as to support ACOs and their participating providers/suppliers in addressing opioid utilization within the FFS population.

Implementation of these policies would take effect July 2, 2019. They will extend the contracts of ACO’s whose are set to expire by December 31, 2018. This gives the ACOs time to prepare to participate at some risk level by the implementation date. The full notice is scheduled to be published in the Federal Register on August 17, 2018.