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Curbside Consult with Dr. Jayne 1/7/19

January 7, 2019 Dr. Jayne No Comments


The government shutdown has impacted some electronic media, including the National Zoo’s Giant Panda Cam and the National Park Service website. It hasn’t slowed CMS, which continues to send regular emails about the recent final rule redesigning the Medicare Accountable Care Organization (ACO) program. Referred to as “Pathways to Success,” it is designed to advance five goals: accountability, competition, engagement, integrity, and quality. The program modifies the participation options available to push ACOs toward taking on real financial risk faster than they had been under the previous programs.

I have been under the weather and tried to use my illness-imposed downtime to read my way through various fact sheets and documents around the program, but have had trouble making sense of some of it. The CMS press releases reference different announcements and rules that have been put out, including the Calendar Year 2019 Physician Fee Schedule (aka the November 2018 final rule). According to the release, the Pathways to Success final rule also takes a step back in time, finalizing policies for extreme or uncontrollable circumstances for performance year 2017, which were initially established via an interim final rule in December 2017. I had to read that part of the announcement several times since I’m not exactly sure how that works to modify a program year that ended 370 days ago. I thought maybe it was confusing because I was reading it while I was hopped up on cold medicine, but I eventually decided that it’s just confusing.

In trying to distill the communications, my assessment is this. Medicare has figured out that the majority of ACOs are participating in Track 1 for the maximum time allowable and some of them are generating losses. Track 1 is a one-sided model with sharing of savings without the ACO having to take on risk, therefore Medicare absorbs any losses. The original idea was for organizations to use Track 1 as a way to get their feet wet with shared savings in hopes that they’d quickly move to more risk-bearing agreements. That hasn’t happened, so now the proverbial stick has to come out.

The other existing ACO varieties (Track 2 and Track 2) are two-sided. Eligible ACOs share a larger portion of any savings, but in exchange they’re required to share losses if spending exceeds benchmarks. These programs have been shown to generate savings for Medicare and are improving quality, so Medicare wants to further those types of arrangements.

Medicare has also figured out that so-called low-revenue ACOs (mainly made up of physician practices or rural hospitals) are outperforming high-revenue ACOs, which typically include hospitals. There are challenges for the low-revenue ACOs to move to a more risk-bearing arrangement because those organizations may have less control over how their assigned beneficiaries use services and therefore spend money. Medicare piloted the “Track 1+ ACO Model” during 2018, with the goal of proving that a two-sided model with lower risk would be attractive. Its success influenced the construction of the new redesigned program, according to CMS.

The redesigned program offers two tracks, named BASIC and ENHANCED, which are open for five-year agreement periods starting July 1, 2019. The BASIC track lets ACOs start under a one-sided model and gradually accept higher risks as they move through five levels A, B, C, D, and E. Once they reach the highest level, they’d be recognized as an Advanced Alternative Payment Model (APM) under the Medicare Quality Payment Program. The ENHANCED track is based on the existing Track 3 and allows flexibility for ACOs willing to take on the highest levels of risk. The existing Track 1 and Track 2 programs will be discontinued, as will new application cycles for Track 1+. CMS feels those options would be redundant to the new program.

CMS aims to move BASIC organizations through the alphabetical levels (which they refer to as the “glide path”) by automatically advancing them at the start of a new performance year. Organizations would also be able to jump to a higher level faster if desired. The ultimate goal is to move all ACOs to the ENHANCED track, with high revenue ACOs being required to transition more quickly. There are also stratifications based on whether ACOs are identified as experienced or inexperienced with performance-based risk but to be honest I skimmed over those particulars in my pharmaceutical-induced fog.

The final rule updates the mechanisms for repayment when ACOs have shared losses. Both new tracks may start with lower repayment amounts based on a percentage of Medicare Part A and Part B revenues, with the amounts recalculated annually based on changes in the ACO participant list. Benchmarks will also be recalibrated, incorporating data from ACO experience and regional performance measures. The rule also aims to reduce “opportunities for gaming” by holding terminated ACOs accountable for pro-rated shared losses. ACOs are also able to choose between different beneficiary assignment methodologies and to change their selections for subsequent performance years. Starting in January 2020, eligible ACO providers will be able to receive payment for telehealth services for certain beneficiaries in certain situations. There are also changes to expand the Skilled Nursing Facility (SNF) 3-day rule waiver.

The redesign also allows ACOs under certain two-sided models to operate a beneficiary incentive program, which may allow for incentive payments of up to $20 to assigned beneficiaries who receive certain qualifying primary care services from ACO members. It also clarifies that under existing program regulations, vouchers and gift cards can be provided to beneficiaries assuming they meet other program requirements such as being connected to the beneficiaries’ medical care. There are a few other tidbits in the rule including updates to beneficiary notification requirements. Beneficiaries have to be notified of the opportunity to opt-out of claims data sharing along with how to change their assigned primary clinician. CMS is developing templates for these notices in an effort to reduce the burden to participating practices.

I’m only marginally involved in the ACO realm, so I’m sure those who are deeper in the process might have additional insights. I’ll be looking to read digests and summaries in the coming days until I’m on the mend. Until then, my next reading list involves chicken soup.


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