ACO Update

New Proposed Shared Savings Regs Win Friends, Influence Organizations

Waivers and prospective attribution await ACOs in the proposed third track

Peter Wehrwein

Another 89 organizations joined the Medicare Shared Savings Program this month, bringing the total number of accountable care organizations (ACOs) in the program to just over 400. No one likes too many rules, but the new regulations that the Centers for Medicare & Medicaid Services ( CMS) proposed for its shared savings program may have something to do with the current sparkle to its popularity.

The mooted rules, published in early December 2014, would open up a third track in the shared savings program that could mean a shared savings rate of up to 75% for some organizations, compared with a 50% maximum in track 1 and a 60% maximum in track 2. Other track 3 goodies include prospective assignment of beneficiaries, which many ACOs see as the not-so-secret sauce of accountable care, and waiving of the three-day hospital stay requirement for coverage of care in a skilled nursing facility.

In another important move, CMS has also proposed that ACOs in track 1 be given a chance to sign up for another three years of upside-only risk instead of either leaving the program or moving to two-sided risk that could cost them money if they don’t meet financial and quality-of-care benchmarks. Most of the ACOs participating in the shared savings program are in track 1, so this extension affects a lot of organizations and could be the difference between the glow of success for the federal government’s ACO effort or a mass defection and failure.

The ACO world is still a small one, and the chattering class that dominates the conversation was, by and large, favorably disposed to CMS’s ideas for the shared savings program. Mark McClellan, a health care heavyweight in the George W. Bush administration who is now director of the health policy center at the Brookings Institution, had neutral-to-nice things to say in a blog post published on the Brookings Web site a few days after the proposed regulations came out. McClellan and his co-authors pat CMS on the back for recognizing “the significant challenges that many ACOs have faced” in the shared savings program and urge readers to take advantage of the comment period, which ends February 6. Others also noted that proposed regulations were unusual in how often they solicited comments. “I think CMS is really looking for feedback,” says David Muhlestein, PhD, an ACO expert at Leavitt Partners, a health consulting company in Salt Lake City.

Clif Gaus

CMS should waive Part B coinsurance for beneficiaries attributed to ACO primary care physicians, says Clif Gaus, CEO of the National Association of ACOs. “Let’s eliminate the barriers.”

But others — who are just as ACO savvy — are more critical, so they add some texture to the reaction to the regulations. Clif Gaus, the CEO of the National Association of ACOs, faults CMS for not going far enough in helping his members succeed. Gaus doesn’t like that CMS has added a major catch to track 1 extension. During the second, three-year hitch, the shared savings split between the ACO and the federal government goes to a 40% ACO–60% CMS split from a 50–50 split during the first three years. “Why does the government take more when you have a program that is saving money?” Gaus asks. He also wants CMS to try something bold, such as waiving the Part B coinsurance for beneficiaries attributed to ACO primary care physicians. “Let’s eliminate the barriers,” says Gaus. “We all know that primary care is the solution to lowering costs.”

Here is a rundown of a few notable provisions in the proposed regulations:

Track 3 treats

In addition to dangling the possibility of greater shared savings — it’s two-sided risk, so they come with the risk of greater losses — in front of ACOs who take the track 3 route, CMS has proposed a flat minimum savings and loss rate of 2% instead of a sliding scale based on the number of attributed patients. Flat minimum savings supply predictability and might make it easier for the ACOs in track 3 to hit financial benchmarks that put them in shared saving territory. CMS is also proposing to ply ACOs in the new track with other waivers beside the one requiring a three-day hospital stay before skilled nursing facility coverage, according to McClellan’s blog post. If proposed regulations were adopted, the track 3 ACOs might be free of certain restrictions on telemedicine payments and the prohibition on qualified providers referring patients to postacute care providers that they have financial relationships with, wrote McClellan and his colleagues.

Track 3 may eventually replace the Pioneer ACO program, which CMS set up as a pilot project for large provider organizations with risk-bearing experience.

Financial benchmarks fixes

CMS currently uses financial benchmarks based on national fee-for-service spending. Some ACO executives have cried foul, saying that their organizations are at a decided disadvantage because medical care is more expensive in their part of the country. CMS has proposed incorporating regional differences into the benchmarks in various ways that may ruffle some of those feathers. CMS has also suggested changes to deal with the criticism that ACOs that perform well are inadvertently penalized when benchmarks are reset that reflect their past success.

Attribution adjustments

In addition to luring organizations into track 3 with prospective attribution, CMS has proposed that the attribution in all three tracks factor in the primary care delivered not just by physicians but also nurse practitioners, physician assistants, and clinical nurse specialists. CMS also wants to adjust attribution so care given by certain specialists — surgeons and radiologists, for example — would be excluded from the attribution calculations because they don’t provide primary care.

Data sharing permission simplified

CMS currently shares claims data with ACOs in the shared savings program, but ACOs must notify beneficiaries about the data sharing and give them a chance to opt out (only 2% do). CMS says it wants to streamline the process. Instead of notifying the ACO of their preferences, beneficiaries would contact CMS directly through the 1-800-Medicare (800-633-4227) number. ACOs would be required to post prominent signs with template language about data sharing with the call-in number.

ACO executives worship at the altar of data, so if CMS’s proposal to supply claims data to the ACOs in tracks 1 and 2 on a monthly basis comes to pass, it will be well received. As CMS notes, because attribution in those tracks is a combination of prospective and retrospective reconciliation, timely supply of data is important so ACOs can track attributed patients, the care they receive, and how much it is costing.

Testing beneficiary “attestation.”

CMS is allowing the Pioneer ACOs to experiment this year with beneficiary “attestation.” Participating ACOs can contact beneficiaries and ask them to identify their “main doctor.” If that provider is part of the ACO, the patient is attributed to the ACO based on that choice, regardless of where they get their primary care. This scheme is attractive to ACOs because it eliminates churn and presumably helps them manage the care of beneficiaries for which they will be held accountable. CMS didn’t propose a specific attestation scheme for the shared savings ACOs but invited comments on one that might be applied to shared savings ACOs assuming two-sided risk.


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