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CMS Finalizes Changes to the Medicare Shared Savings Program

The Center for Medicare and Medicaid Services (CMS) has published a 957-page final rule that confirms changes made to the Medicare Shared Savings Program (MSSP). This new rule will be expected to have a substantial impact on Accountable Care Organizations (ACOs) that rely on one-sided risk models, in so far as ACOs in the program will be forced to assume a larger amount of financial risk than under the current landscape. CMS’s new program, “Pathways to Success”, will afford smaller, physician-led ACOs a period of three years to remain in a one-sided risk model. All new ACOs will have two years, while existing ACOs with one-sided risk models will only have solely a year to adopt the new program and assume the additional financial risk.

CMS has also reduced the shared savings rate to 40% for ACOs that do not assume risk for health care costs, but the 50% rate for ACOs at all other levels of financial risk remains unchanged. With this new rule, announced December 21, 2018, CMS projects $2.9 billion in savings over the next ten years as ACOs take on more risk.

In CMS’s current program, which has been in effect for six years, ACOs were eligible to receive a portion of any savings that were generated, provided that they met quality standards for the care they provided to their patients. Currently, only a limited number of ACOs are subject to any sort of financial penalties in cases in which costs increase. However, from the experience running MSSP, CMS has been able to determine that ACOs that are required to take responsibility for costs tend to perform better than those that do not. This new rule provides incentives for ACOs to provide high-quality care in order to generate additional savings for themselves.

“Pathways to Success” allows CMS to work towards promoting competition in health care marketplaces, based on the ­­­­­­­­­­­­­­­agency’s assertion that smaller, physician-led ACOs have had greater efficacy controlling costs than hospital-led ACOs do. This promotes competition as well as helping to ensure that patients are able to make knowledgeable, informed choices of where to obtain care.

“In all that we do at CMS,” Administrator Seema Verma said in a December 21 blog post, “we aim to put patients first and ensure that they have the information they need to make decisions about their care. To this end, [“Pathways to Success”] requires ACOs to provide beneficiaries in an ACO with a written notice…that they are participating in this new approach to care delivery, and it must also explain what participating in an ACO means for their care.”

In addition to the announcement of the new program, CMS offered a one-time, six-month extension to ACOs that have a contract ending in 2018. These ACOs will now have time to adapt to the new policies under “Pathways to Success” as well as to adjust to the higher financial risk the ACO will be taking on. Similarly, any new ACOs will have a special, one-time start date of July 1, 2019 to allow for time to review and assess the new program.

For more information regarding the changes made to the ACO program, please contact Carey Kalmowitz, Esq. or Adrienne Dresevic, Esq.

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