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CMS Proposes Rules to Improve Accountable Care Organizations (ACOs)

Contributed by Michael A. Cassidy

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule intended to make ACOs and Medicare Shared Savings Plans more practical and attractive to potential providers. Theproposed rule was released on December 1, 2014, along with a CMS Fact Sheet.

Longer Lead Time to Develop

In order to provide more development time, CMS is proposing to permit ACOs to participate in one additional agreement under track 1 (which was the shared savings without risking losses track), but at a lower sharing rate than the previous agreement to encourage progression along the performance risk continuum. The new option would be available to ACOs that had already met the quality performance standards in at least one of the first two years, and which have not generated losses that exceed the negative medical savings rate (MSR) in both of the first two years of the previous agreement.

Revised Beneficiary Assignment Protocols

Under the existing rules, beneficiaries are assigned to ACOs in two steps, after first identifying actual service by a primary care physicians, based on the plurality of primary care services furnished by either primary care physicians or by specialists physicians, nurse practitioners, physician assistants, and clinical nurse specialists. CMS is proposing to revise the second step of the assignment methodology to remove certain specialty types whose services are not likely to be indicative of primary care services. In addition, CMS is proposing to include nurse practitioners, physician assistants, and clinical nurse specialists primary care services in step one in order to recognize the primary care delivered by those professionals.

Encouraging ACOs to Take on Greater Performance Base Risk

CMS is looking for methodologies to allow ACOs to progress further along the performance risk continuum. CMS is seeking comment on a number of modifications including:

  • Proposing to implement an additional performance risk based model (track 3) for ACOs to participate in the shared savings program. Track 3 would offer a higher sharing rate than tracks 1 and 2 and would prospectively assign beneficiaries to the ACO rather than preliminarily assigning beneficiaries to ACOs and then doing a retrospective reconciliation.
  • Proposing to modify track 2 to increase it’s attractiveness by making the minimum savings and loss rates variable rather than current flat 2%.
  • Seeking comment on what other design elements would be necessary for organizations to consider taking on greater financial risk including allowing beneficiary assignment based upon beneficiary attestation and waiving certain fee for service payment and regulations relating to qualifying hospital stays for skilled nursing facility admission, telehealth, qualifications for home health services, and qualifications for post acute referrals.
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