Medicare Compliance & Reimbursement

New Track 3 encourages more risk and reaps bigger rewards.

The Centers for Medicare & Medicaid Services (CMS) is trying hard to entice providers to join the Medicare Shared Savings Program (MSSP) and get on board with the Accountable Care Organization (ACO) model. Whether you’re considering jumping on the MSSP bandwagon, or if your ride is already underway, CMS has just made a myriad of changes to the program in a new final rule that you need to know about.

CMS released the final rule on June 4. “While the timing of the release of the final rule isn’t optimal for those that may have considered participating in the upcoming round of entrants, the final rule further clarifies CMS’ intent to facilitate the movement to value-based payment methodologies,” notes Tawnya Bosko, MHA, MSHL, MS, senior manager of The Camden Group.

1. Get Another Round of Track 1 Time

Good news: The final rule allows ACOs to participate in one additional three-year agreement period under Track 1. These ACOs can maintain the same maximum sharing rate as in their first agreement period, but only if they enter a performance-based risk (two-sided) track, according to CMS. ACOs must have met the quality performance standard in at least one of the first two years of their initial three-year agreement period and must be otherwise in good standing with the program.

ACOs can continue without the reduced sharing rate during the second three-year period, Bosko says. This allows “those ACOs who have seen modest improvements in their ACO operations and performance and/or those who are not ready for performance-based risk a little more time to implement and execute.”

2. Take a Look at the New Track 3

Additionally, the final rule introduces a new performance-based risk model under the MSSP for ACOs to participate in, called Track 3. To encourage ACOs to accept more performance-based risk, Track 3 offers a higher sharing rate than Tracks 1 and 2.

Track 3 is a so-called “two-sided” model, which means that it allows ACOs to reap greater financial rewards in exchange for accepting higher levels of risk, according to Ropes & Gray in a June 11 analysis. And unlike Tracks 1 and 2, Track 3 includes a modified beneficiary assignment methodology, an increased sharing rate and performance payment, and loss sharing limits.

Specifically, Track 3 has a higher sharing rate of 75 percent of all savings or losses and offers prospective assignment of beneficiaries instead of preliminary assignment with retrospective reconciliation, Bosko notes.

Track 2 also experienced some changes in the final rule, mainly to allow ACOs to choose from several options when setting their minimum savings rate (MSR) and minimum loss rate (MLR) in a symmetrical manner. ACOs can choose to either:

• Have no MSR/MLR; or

• Have an equilateral MSR/MLR in 0.5-percent increments between 0.5 percent and 2 percent; or

• Have an equilateral MSR/MLR that varies based on the number of assigned beneficiaries (as in Track 1).

Track 3 will also follow the same MSR/MLR methodology as Track 2.

The final rule also adopts a new skilled nursing facility (SNF) waiver for Track 3 ACOs. Effective Jan. 1, 2017, Track 3 ACOs no longer need to satisfy Medicare’s “SNF 3-Day Rule,” which requires a minimum three-day inpatient stay prior to a SNF admission, according to a June 17 analysis by attorneys Hannah Whitman Clark and Emily Wein for the Ober-Kaler Health Law Group. “To take advantage of this waiver, the SNF to whom beneficiaries are admitted must have a ‘SNF Affiliate Agreement’ with the ACO and have a quality rating of three stars or more.”

3. Take the Pain Out of Beneficiary Assignment

CMS also revised the beneficiary assignment methodology in the final rule. 

Old way: Before, the methodology assigned beneficiaries in two steps based on the plurality of primary care services furnished: 1) by primary care physicians; and 2) by specialist physicians, nurse practitioners, physician assistants, and clinical nurse specialists. 

New way: In the final rule, CMS revised the assignment methodology to remove from Step 2 certain specialty types whose services are not likely to be indicative of primary care services (such as dermatology and gastroenterology), placing greater emphasis on primary care physicians.

The final rule redefines “primary care services” to include the transitional care management codes and the chronic care management code, explained the law firm Ropes & Gray. Also, the final rule includes claims for primary care services furnished by nurse practitioners, physician assistants, and clinical nurse specialists under Step 1 of the assignment process, to help “ensure that a beneficiary is assigned to the ACO that actually provides the plurality of primary care to that beneficiary and thus should be responsible for managing the patient’s overall care.”

“Assignment methodology and fluctuations have been a pain point for many ACOs,” Bosko laments. “While this may not be a cure, it does work to address many of the concerns.”

Timing: You will continue to use the old assignment methodology for performance year 2015, including the final retrospective reconciliation set for mid-2016, according to Ropes & Gray. But you’ll need to begin using the new methodology for performance year 2016, including during the application review for ACOs applying for a 2016 start date.

4. Enjoy Streamlined Data Sharing

CMS streamlined the process for ACOs to access Medicare beneficiary claims data necessary for healthcare operations, eliminating the requirement that ACOs send out letters for beneficiaries to sign and return.

You will still need to provide written notification at the point of care by posting signs in your facility that include the template language regarding data sharing and the opportunity for beneficiaries to decline sharing their data by calling 1-800-Medicare. But instead of mailing notices to beneficiaries and waiting 30 days for a reply before requesting data, beneficiaries now will simply call the Medicare number to give their data sharing preferences directly to CMS.

Upside: This change in the final rule “removes the ACO from the data sharing consent process — a win for current ACOs who have found the beneficiary notification process to be exceedingly burdensome and a distraction from the primary work of population health management,” Bosko says.

5. How Your Financial Benchmarks Will Change

In the final rule, CMS finalized the following methods for resetting the ACO’s benchmark at the start of its second or subsequent agreement period:

• Equally weighting the historical benchmark years, instead of weighting these years 10 percent for benchmark year (BY) one, 30 percent for BY two, and 60 percent for BY three;

• Accounting for savings that the ACO generated in its prior agreement period; and

• Implement in rulemaking later this year a methodology that would reset ACO benchmarks in part based on trends in regional fee-for-service costs rather than solely on the ACO’s own recent spending.

CMS anticipates that it will use the revised rebasing methodology for the first time to set benchmarks for ACOs beginning new agreement periods in 2017, Ropes & Gray stated. “ACOs beginning new agreement periods in 2016 would convert to the revised methodology at the beginning of their next agreement period in 2019.”

Are Final Rule’s Changes Enough?

Clearly, the changes in the final rule are largely based on CMS’ attempt to attract more new participants and to make the MSSP attractive to existing ACOs. But many stakeholders see much more room for improvement.

“Though we are encouraged that CMS has removed some regulatory barriers, such as the three day SNF stay requirement for advanced ACOs, CMS needs to remove additional barriers for all ACOs to make the program more attractive to new and current participants,” Linda Fishman, senior vice president of public policy analysis and development for the American Hospital Association, said in a June 5 statement.

The ACO program “will be most successful if physicians in each specialty can design and be paid in ways that give them the flexibility to deliver the best care for their patients and allow them to take accountability for the aspects of quality and spending they can manage,” American Medical Association president Robert Wah, MD, said in a June 5 statement. “We encourage CMS to accelerate its efforts to accept and approve physician-designed alternative delivery and payment models in addition to its efforts to expand the ACO program.”

Resource: To read the MSSP final rule published in the Federal Register, go to www.gpo.gov/fdsys/pkg/FR-2015-06-09/pdf/2015-14005.pdf.