On Tuesday, Nov. 1, the federal Centers for Medicare & Medicaid Services (CMS) issued its calendar year 2023 Physician Fee Schedule (PFS) final rule, and with it, the agency made meaningful changes to the parameters of the Medicare Shared Savings Program (MSSP), with health equity the principle around which the major changes announced were made. The changes will impact how the leaders of accountable care organizations (ACOs) participate in the program going forward.
CMS officials explained their changes to the MSSP in a fact sheet posted to the agency’s website on Tuesday. The fact sheet began thus: “On November 01, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) final rule that includes changes to the Medicare Shared Savings Program (Shared Savings Program) to advance CMS’ overall value-based care strategy of growth, alignment, and equity. Through the changes we finalized,” CMS officials wrote, “we seek to reverse certain recent trends in the Shared Savings Program: in recent years growth in the number of beneficiaries assigned to ACOs in the Shared Savings Program has plateaued; higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks; and access to ACOs appears inequitable as shown by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts.”
What’s more, CMS officials wrote, “Several of the provisions in this final rule are expected to advance equity within the Shared Savings Program. Based on feedback from health care providers treating rural and underserved populations that they require upfront capital to make the necessary investments to succeed in accountable care and may also need additional time under a one-sided model before transitioning to performance-based risk, we are finalizing policies to advance shared savings payments (referred to as advance investment payments) to low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, that are new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and that serve underserved populations. These advance investment payments will increase when more beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS), are dually eligible for Medicare and Medicaid, live in areas with high deprivation (measured by the area deprivation index (ADI)), or a combination of those, are assigned to the ACO, and these funds will be available to address the social and other needs of people with Medicare. We are also finalizing other modifications to certain existing policies under the Shared Savings Program to support organizations new to accountable care by providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign their care processes to be successful under risk arrangements.”
Indeed, CMS officials stated, “As we seek to increase the percentage of people with Medicare in accountable care arrangements, we are balancing incentives and participation options to serve a dual purpose of sustaining participation by existing ACOs and increasing program growth, recognizing that ACOs vary in their composition of providers/suppliers, the needs of the populations they serve, and have varying degrees of efficiency relative to their region and experience with accountable care initiatives. In this final rule, we are building on the existing Shared Savings Program benchmarking methodology by finalizing modifications to strengthen financial incentives for long- term participation by reducing the impact of ACOs’ performance on their benchmarks, to address the impact of ACO market penetration on regional expenditures used to adjust and update benchmarks, and to support the business case for ACOs serving high-risk and high dually eligible populations to participate, which will help sustain participation and grow the program. Additionally, we are finalizing modifications to the benchmarking methodology to mitigate bias in regional expenditure calculations that benefit ACOs electing prospective assignment. The changes we are finalizing to the benchmarking methodology used in the Shared Savings Program align with our consideration of the more long-term benchmarking concepts that would move toward the use of administratively set benchmarks in order to grow and sustain long- term program participation as discussed in the related comment solicitation included in the CY 2023 PFS proposed rule. We are also finalizing policies to expand opportunities for certain low revenue ACOs participating in the BASIC track to share in savings even if they do not meet the minimum savings rate (MSR) to allow for investments in care redesign and quality improvement activities among less capitalized ACOs.”
What’s more, CMS officials noted, “We are finalizing changes to the quality reporting and the quality performance requirements that are responsive to interested parties’ feedback, and designed to support transition of ACOs to all payer quality measure reporting. These provisions include reinstitution of a sliding scale reflecting an ACO’s quality performance for use in determining shared savings for ACOs, regardless of how they report quality data, and to revise the approach for determining shared losses for ENHANCED track ACOs. We are finalizing an extension of the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. We are also finalizing a health equity adjustment to an ACO’s quality performance category score to recognize high quality performance by ACOs with high underserved populations. We are finalizing benchmarking policies to establish quality measure benchmarks and minimum attainment level for the CMS Web Interface measures for performance years 2022, 2023 and 2024 under the Shared Savings Program.”
The entire statement can be found here.
Following that announcement, the leaders of NAACOS, the Washington, D.C.-based National Association of ACOs, were quick to praise the changes coming out of CMS, though with qualifications. NAACOS published a statement in the form of a press release, attributing it to president and CEO Clif Gaus, Sc.D. Gaus’s statement began thus: “Today’s finalized changes to Medicare’s largest ACO program bring a win to patients and will absolutely help providers deliver accountable care to more beneficiaries. NAACOS thanks the Centers for Medicare and Medicaid Services (CMS) for its leadership and following through on its promise to create a stronger Medicare program by improving accountable care models and speeding the movement toward value for all patients. On balance, we believe this final rule will grow participation in accountable care organizations, which have already generated billions of dollars of savings for our health system.”
At the same time, Gaus’s statement continued thus: "However, we remain concerned with CMS’s use of a prospectively projected administrative growth factor for ACO benchmarks or their financial spending targets. As we stated in our comments on the proposed rule, more than a third of ACOs would be harmed by this change. Instead, we ask for more collaboration between CMS and the ACO community to build a better bridge to a more sustainable benchmarking strategy. Specifically, CMS should consider correcting the ‘rural glitch,’ where ACOs no longer benefit from the regional adjustment when lowering the spending of their assigned patients. This change would greatly help ACOs, but remains in effect even after today’s changes."
NAACOS found the following changes to be “positive,” given that CMS will:
> Give ACOs more time before being forced to take on financial risk, including allowing some up to seven years before taking on risk and making the Enhanced Track optional;
> Provide advance shared savings payments to some ACOs that serve underserved populations;
> Add a health equity quality adjustment for high quality performance in ACOs with high underserved populations; and
> Create better and more fair financial benchmarks for ACOs by accounting for prior shared savings to help mitigate the lowering of an ACO’s benchmark over time.
