CMS Aims To Grow ACO Participation – Healthcare

The Centers for Medicare & Medicaid Services
(“CMS“) recently 
published the proposed 2023 Physician Fee Schedule
(“PFS“), which contains several
important changes affecting Accountable Care Organizations
(“ACOs“) that participate in the
Medicare Shared Savings Program
(“MSSP“), including a new Advanced
Incentive Program. See Proposed 2023
PFS, 82 Fed. Reg. 45,860 (July 29, 2022).

ACOs enable health care providers to provide coordinated patient
care to Medicare beneficiaries, and to share in the savings
resulting from improved care. According to CMS, as of January 1,
2022, over 11 million Medicare beneficiaries receive care from 483
ACOs across the country. Id. at
46,093.

The proposed changes are intended to advance “growth,
alignment, and equity,” and to “increase the percentage
of people with Medicare in accountable care
arrangements.” Id. at 46,093-94. Of
note, and as described in a 
publication preceding the PFS, CMS proposed the changes to
increase (i)  the number of beneficiaries assigned to MSSP
ACOs; (ii) the number of higher spending populations in the
program, since the change to regionally-adjusted benchmarks; and
(iii) the representation of Black (or African American), Hispanic,
Asian/Pacific Islander, and American Indian/Alaska Native
beneficiaries assigned to MSSP ACOs, as compared to Non-Hispanic
Whites.

Below, we summarize several of the key proposals. CMS is
inviting the public to comment on the proposed
rules until  September
6, 2022.

Proposed Changes to Advance Equity

1. Advanced Incentive Payments
   
   Recognizing the start-up costs required for ACO
   participation and this burden on small organizations, CMS proposes
   to provide advance shared savings payments (“Advanced
   Incentive Payments” or “AIPs”) to low
   revenue ACOs that: (i) are inexperienced with performance-based
   risk and (ii) serve underserved populations. In 2011, CMS estimated
   that ACOs participating in the MSSP expend an average of $580,000
   in start-up costs and $1.27 million in ongoing annual operating
   expenses. According to CMS Innovation Center experiments, payments
   similar to the Advanced Incentive Payments “encouraged ACOs to
   form in areas where ACOs may not have otherwise formed and where
   other Medicare payment and delivery innovations were less likely to
   be present.” Id. at 46,098. To
   reduce the financial burden encountered by small providers, CMS
   envisions that the Advanced Incentive Payments will be distributed
   to ACOs over two performance years. While the payments may be
   offset against any shared savings that the ACO ultimately earns, if
   an ACO does not earn shared savings in its agreement period or a
   renewed agreement period, the ACO is not responsible for repayment
   of the AIPs and CMS is not in a position to recoup any of the AIPs
   from the ACO. Id. at
   46,109-10; see also 42 CFR 425.630(g)
   (as proposed). AIPs are to be comprised of two types of payments:
   (i) a one-time payment of $250,000 and (ii) eight quarterly
   payments based on the number of assigned beneficiaries in the ACO,
   capped at 10,000
   beneficiaries. See id. at
   46,103. The quarterly payments would be determined by: (i) a risk
   factors-based score set to 100 for dually-eligible beneficiaries
   (Medicare and Medicaid); or (ii) set to the Area Deprivation Index
   national percentile rank (an integer between 1 and 100) of the
   census block group in which the beneficiary resides for
   Medicare-only beneficiaries. Higher quarterly payment amounts would
   be provided for beneficiaries with higher risk scores. The proposed
   rules contain several eligibility criteria, which CMS intends to
   codify at 42 CFR 425.630(b). Specifically, to be eligible
   for the AIPs, the ACO: (i) must not be a renewing ACO or
   re-entering ACO as defined in 42 CFR 425.20; (ii) must apply
   participate in the MSSP under any level of the BASIC track glide
   path as specified in 42 CFR 425.600(a)(4)(i)(A); (iii) must
   be inexperienced with performance-based risk Medicare ACO
   initiatives as defined in 42 CFR 425.20; and (iv) must be a
   low revenue ACO as defined in 42 CFR
    425.20. Id. at 46,100. Note, to
   enable recoupment of the funds where permitted under the proposed
   regulations, CMS is proposing to modify the definition of
   “inexperienced with performance-based Medicare ACO
   initiatives” and “experienced with performance-based risk
   Medicare ACO initiatives,” as defined in 42
   CFR 425.20. Id. at 46,109-10.
   Under the existing regulations, an ACO is deemed to be
   inexperienced if, in part, less than 40 percent of the ACO’s
   participants participated in a performance-based risk initiative in
   each of the five most recent performance years prior to
   the agreement start date. See 42
   CFR 425.20. The newly proposed regulations, in contrast,
   adopt a rolling five year lookback period that starts from the
   then-present performance year. 82 Fed. Reg. at 46,109-10, 46,439.
   CMS notes that it “is concerned about the possibility that an
   ACO may be eligible to receive AIPs and then quickly thereafter
   seek to add ACO participants experienced with performance-based
   risk, thereby avoiding… inexperience and low revenue eligibility
   requirements.” Id. at 46,108. The
   rolling lookback period for example, would enable CMS to recoup
   AIPs made to an entity that, during the five year lookback period,
   becomes “experienced” and, thus, ineligible, for receipt
   of AIPs, unless otherwise remedied by the
   ACO. See id. at
   46,109 (setting forth that under the proposed 42
   CFR 425.316(e)(3), an ACO would be obligated to repay spent
   and unspent AIPs if CMS takes pre-termination action under 42
   CFR 425.216 and the ACO continues to be experienced with
   performance-based or high revenue). Finally, entities requesting
   AIPs will be required to submit a spending plan describing how the
   ACO will utilize the
   payments. Id.; see
   also 42 CFR 425.630(d)(1) (as proposed). In addition,
   CMS will limit the types of expenses for which the AIPs can be
   utilized. See 82 Fed. Reg. 46,101
   Specifically, CMS proposes to require that all AIPs be used to
   “improve the quality and efficiency of items and services
   furnished to beneficiaries by investing in increased staffing,
   health care infrastructure, and the provision of accountable care
   for underserved beneficiaries, which may include addressing social
   determinants of health.” Id.




2. Health Equity Adjustment for ACOs Treating Underserved
   Populations
   
   CMS is proposing a health equity adjustment that would
   upwardly adjust an ACO’s quality score. The purpose of the
   adjustment is to reward ACOs that are high performing and to
   support those ACOs serving a high proportion of underserved
   beneficiaries while also encouraging all ACOs to treat underserved
   populations. This proposed adjustment would add up to 10 bonus
   points to the ACO’s quality performance category score. Id. at
   46,113-142.




3. Benchmark Adjustment for Providers Treating High-Risk
   Dual Eligible Beneficiaries
   
   CMS proposes certain changes to its benchmarking
   methodology that is intended to encourage ACO participation by
   health care providers who treat a substantial number of high-risk
   Medicare/Medicaid beneficiaries. Specifically, the proposed
   methodology is intended to reduce the effect of ACO performance on
   ACO historical benchmarks, increase opportunities for ACOs caring
   for medically complex, high cost beneficiaries, and strengthen
   incentives for ACOs to enter and remain in the
   MSSP. See id. at
   46,158-218.

Operational Changes & Reductions in Administrative
Burdens

1. Term of Participation
   
   CMS is proposing to allow ACOs applying to the program
   that are inexperienced with performance-based risk to participate
   in one five-year agreement under a one-sided shared savings model.
   This proposal is intended to provide these ACOs with more time to
   invest in infrastructure and redesigned care processes, before
   transitioning to performance-based
   risk. Id. at 46,114-18.




2. Removal of Requirement to Review Marketing
   Materials
   
   CMS proposes to eliminate the requirement that ACOs submit
   marketing materials to CMS for review and approval prior
   to  disseminating materials to beneficiaries and ACO
   participants. Under the proposed rules, ACOs would be required to
   submit marketing materials upon CMS’s request and discontinue
   use of any marketing materials or activities disapproved by CMS.
   Notwithstanding the foregoing, CMS is not waiving its marketing
   rules, and ACOs must still comport with all marketing-related
   requirements. Id. at
   46,203-04; see also 42
   CFR 425.312 (as proposed).




3. Easing of Beneficiary Notification Rules
   
   Generally, an ACO is required to annually notify Medicare
   FFS beneficiaries that: (i) the ACO participates in the MSSP, (ii)
   the beneficiary may decline claims data sharing, and (iii) the
   beneficiary may identify or change identification of a primary care
   provider for purposes of voluntary alignment. CMS is proposing to
   only require the notice to once per agreement period. In addition,
   to promote beneficiary comprehension of the standardized written
   notice, CMS is proposing that the ACO follow up with each
   beneficiary to whom it furnished the standardized written notice.
   While such follow-up communication can be verbal or written, it
   must be provided no later than the earlier of the beneficiary’s
   next primary care service visit, or 180 days from the date the
   first standardized written notice was provided to the beneficiary.
   82 Fed. Reg. 46,204-205; see also 42 CFR
   § 425.312 (as proposed).

Comments to CMS on the PFS and these proposals to expand
access to ACOs are due by September 6, 2022. 

CMS Aims to Grow ACO Participation

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Food, Drugs, Healthcare, Life Sciences from United States