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CMS Releases New Proposal to Improve Accountable Care Organizations

Focus is on primary care and improved incentives for participation, quality, and efficiency

The Centers for Medicare and Medicaid Services (CMS) has released a proposal to strengthen the Shared Savings Program (SSP) for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and on promoting transitions to performance-based risk arrangements. The proposed rule reflects input from program participants, experts, consumer groups, and the stakeholder community at large.

Through the Patient Protection and Affordable Care Act (PPACA), ACOs encourage physicians, hospitals, and other health care providers to work together to better coordinate care when people are sick and to keep people healthy, which help reduce the growth in health care costs and improve outcomes, the CMS says. ACOs become eligible to share savings with Medicare when they deliver that care more efficiently while meeting or exceeding performance benchmarks for quality of care.

The SSP includes more than 330 ACOs in 47 states, providing care to more than 4.9 million beneficiaries in Medicare fee-for-service. Recently, the CMS announced the following first-year SSP results:

  • Fifty-eight SSP ACOs held spending below their benchmarks by a total of $705 million and earned shared savings payments of more than $315 million.
  • Another 60 ACOs had expenditures below their benchmark, but not by a sufficient amount to earn shared savings.

Other PPACA initiatives to improve care and to reduce costs have helped reduce hospital readmissions in Medicare by nearly 10% between 2007 and 2013 (translating into 150,000 fewer readmissions), and quality improvements have resulted in saving 15,000 lives and $4 billion in health spending during 2011 and 2012.

CMS is seeking comment on a number of adjustments to improve the SSP, including the following:

  • Providing more flexibility for ACOs seeking to renew their participation in the program. Many ACOs elect to enter the SSP under a one-sided risk model, in which the organization participates in shared savings with the Medicare program but does not take on additional performance-based risk. More experienced ACOs that are ready to share in financial losses in return for the opportunity for a higher share of savings may elect to enter a two-sided model. CMS is proposing to give ACOs the option of a longer lead time to transition to a two-sided performance risk model after their first agreement period. ACOs would have the opportunity to renew under the one-sided model for one additional agreement period. ACOs that enter the SSP under the two-sided performance risk model would see no change.
  • Encouraging ACOs to take on greater performance-based risk and reward. CMS is proposing to create a new two-sided risk model, called “track 3,” that integrates some elements from the Pioneer ACO model, such as higher rates of shared savings and prospective attribution of beneficiaries. A list of assigned beneficiaries will be provided at the start of the performance year, and no further beneficiaries will be added to the list during that year.
  • Putting an emphasis on primary care. CMS proposes to refine the way Medicare beneficiaries are assigned to an ACO to place greater emphasis on primary care services delivered by nurse practitioners, physician assistants, and clinical nurse specialists and to allow certain specialists not associated with primary care to participate in multiple ACOs.
  • Devising alternative methods for benchmarks. CMS seeks comment on alternative methodologies that would make ACO benchmarks for determining shared savings and losses gradually more independent of the ACO’s past performance and more dependent on the ACO’s success in being more cost-efficient relative to its local market. For example, the CMS is considering whether shared savings received by an ACO should be added back to the benchmark in future performance periods.
  • Streamlining data-sharing and reducing administrative burden. CMS proposes to streamline the process for ACOs to access beneficiary claims data necessary for health care operations, such as quality improvement activities and care coordination, while retaining the opportunity for beneficiaries to decline to have their claims data shared with the ACO.

The new proposal is open for public comment until February 6, 2015.

Sources: CMS; December 1, 2014; and Proposed Rule; December 1, 2014.

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