How Medicare Shared Savings Program Changes Could Affect You

The Centers for Medicare and Medicaid Services (CMS) last week announced proposed changes to the Medicare Shared Savings Program (MSSP), the best-known and largest program for accountable care organizations (ACOs) currently run by the federal government. We discuss below these proposed changes and how they might affect physicians and medical practices.

What is the MSSP?

The MSSP was established by the Affordable Care Act and launched in 2012. Under this program, groups of health care providers combine into ACOs that agree to take on responsibility for the total cost and quality of care for their patients. If the ACOs are able to provide this care at a lower-than-expected cost, while still maintaining quality of care, then the ACOs receive a portion of the savings they achieve. More than a quarter of current fee-for-service Medicare beneficiaries are in an ACO participating in the MSSP.

The MSSP has evolved over time and currently consists of multiple “tracks.” Track 1 is an “upside-only” program, meaning that participating ACOs may qualify to receive a portion of the amount saved, but are not responsible for paying CMS back for any spending above the projected benchmark. Most MSSP ACOs—460 of the 561 (approximately 82%)—are participating in Track 1. Tracks 2 and 3 are considered “two-sided” tracks, and participating ACOs may receive shared savings or may be required to make payments back to CMS as shared losses. In return for accepting risk, ACOs participating in two-sided tracks are eligible for higher shared savings payments than ACOs in the upside-only program. Under current program rules, ACOs may participate in Track 1 for up to six years (consisting of two three-year agreement periods) before needing to either exit the program or begin participating in one of the two-sided tracks.

What are the Proposed Changes?

CMS data indicates that, taking shared savings payments made to eligible ACOs into account, upside-only ACOs end up increasing aggregate Medicare spending. (Other analysts dispute this assertion, noting that CMS’ savings calculation is based on the ACO spending benchmarks set by CMS, rather than on what ACOs would be projected to spend in the absence of the ACO program.) Based on this analysis, CMS now proposes to redesign the program so that it consists of only two tracks: “Basic” and “Enhanced.” In both cases, participating ACOs would be required to enter into agreement periods of at least five years and assume two-sided risk.

• Basic track: Under this option, ACOs could begin under an upside-only model (generally for one or two years) and gradually phase in higher levels of risk in a prescribed manner over the five-year agreement period. Certain “low-revenue” ACOs would be able participate in the Basic track for up to two agreement periods, spending the second agreement period at the Basic track’s highest risk/reward level.
• Enhanced track: This option is based on the MSSP’s current Track 3 and includes risk and reward levels higher than the Basic track’s highest levels.

CMS also proposes increasing flexibility around certain existing regulatory requirements, including the following:

• Allowing expanded use of telehealth services
• Expanding waiver eligibility for the Skilled Nursing Facility Three-Day Rule
• Allowing ACOs to establish a beneficiary incentive program (under which ACOs could provide an incentive payment of up to $20 to an assigned beneficiary for each qualifying primary care service the beneficiary receives from certain ACO professionals)

What Does it Mean for Practices?

Mandating that all ACOs participating in the MSSP assume two-sided risk is a significant change in the operation of the program, with major implications both for existing ACOs and those considering joining the MSSP.

• For ACOs (and affiliated providers) currently participating in the MSSP: Existing participants will need to decide whether they are prepared to assume down-side financial risk. Many ACOs likely will decide that they are not ready to do so. In a survey conducted by the National Association of ACOs this past spring, 71% of the 82 ACOs approaching their six-year limit for participation in Track 1 indicated that they were likely to leave the MSSP if forced to take on more risk. CMS also believes that the program changes will result in fewer participants, estimating that by 2026 there will be at least 100 fewer ACOs participating in the MSSP than would have been under the current program.
• For physicians considering joining ACOs and ACOs deciding whether to participate in the MSSP: Prospective participants will need to reevaluate these decisions in light of the potential need to assume down-side risk. For many providers in this position, the investment of time, effort, and financial resources needed to build a successful ACO already was a significant barrier to entry, even knowing that there was a significant period of time in which the ACO could participate in an upside-only program. The need to commit to assuming two-sided risk after a much shorter time period may make ACOs less willing to invest these resources.

Whether already involved in an ACO or considering joining, one, physicians and medical practices should review the proposed changes to determine how the changes might affect their specific situations. They may also want to consider submitting comments to CMS on their own behalf or in coordination with their ACOs regarding these proposed changes to the MSSP. As always, Curi member physicians and practices may contact me for support in evaluating how to proceed.