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New results from the Medicare Shared Savings Program (MSSP) prove that participants are reining in Medicare spending and increasing quality. According to the Centers for Medicare & Medicaid Services (CMS), in performance year 2017, MSSP accountable care organizations (ACOs) generated $314 million in net Medicare savings with 60% achieving savings – a 56% increase compared to 2016. And they did so with a mean quality score of 90.5%.
Additionally, the National Association of ACOs (NAACOS), recently released a report that MSSP ACOs saved a gross $1.8 billion, nearly double the amount CMS has reported, in performance years 2013 through 2015.
It is evident that MSSP program participants are seeing positive results. However, these results were announced shortly after CMS released its much anticipated proposed rule to redesign the program. While the proposed redesign presents significant implications for MSSP ACOs, many of the changes are expected and positive. Here, we summarize key components of the proposal to help ACOs understand and evaluate their options.
There’s A Lot of Good
Many of the proposed changes are positive and modifications Premier has been advocating for, signaling the permanence of value-based care delivery and payment models.
Here’s a breakdown of what’s good.
These proposed changes will continue to provide opportunities for ACOs to build the capabilities needed to succeed in a risk-based environment.
A recent report from Health Affairs indicates that 10% of the U.S. population is now receiving care through an ACO. Commercial ACO contracts account for a little more than half of all ACO-covered lives, while Medicare contracts account for 37% and Medicaid account for the remaining 10%. As the number of ACOs continues to rise, so do other value-based payment models, such as bundled payments and direct-to-employer contracts. In particular, the commercial space has seen a flurry of activity, with moves by UnitedHealth, Humana and Walmart to expand into bundled payment.
With industry-wide growth and investment in new payment models, now is the time for providers to embrace the MSSP so that they don’t get left behind.
The Bad May Not Be That Bad
At its core, the proposed rule aims to accelerate movement toward risk-sharing models, which solidifies the push toward more provider accountability. While we believe ACOs need more time in an upside-only risk track, providers need to keep in mind that this is only a proposed rule and modifications are likely in the final rule (expected in November).
Specifically, the rule proposes to consolidate current MSSP Tracks 1 and 2 into a new Basic Track. In this track, upside-only risk participation is permitted for two years (and existing Track 1 ACOs would only be allowed to continue for another year before moving into the higher-risk tracks). The rule renames the current MSSP Track 3 as an Enhanced Track, but with some modifications.
Additionally, the proposed rule distinguishes between high-revenue and low-revenue ACOs (typically primary care practices). High-revenue ACOs would be required to move to the Enhanced Track after one five-year contract, while low-revenue ACOs could stay in the Basic Track for two agreement periods (10 years total).
Recent MSSP ACO results from performance year 2017 show that it takes time to achieve positive results in this program, but MSSP ACOs are clearly garnering savings for both themselves and Medicare. According to CMS, more experienced ACOs are more likely to earn shared savings and save money overall for Medicare. Premier sees this with our MSSP ACO member participants, as well.
There is no doubt that the industry is moving toward alternative payment models that assume greater risk, but this must be done with a methodical, data-driven approach to care delivery redesign. ACOs in it for the long haul are improving performance overtime, and gradually assuming more risk. Premier has provided comments around an alternative approach to CMS for the final ruling.
The Ugly
Among CMS’s proposed changes to the MSSP is a suggestion to privilege physician-led ACO models over hospital-led models. Physician-led ACOs play an important role in advancing value-based payment and population health. But imposing different requirements on physician-led versus hospital-led ACOs is problematic and could undermine progress toward a value-based system. CMS is concerned that independent practices are at a disadvantage and are pushed into consolidation. Yet, our experience does not support this notion. Many of Premier’s successful ACOs partner with independent practices instead of employing physicians.
The bottom line—we believe in a level playing field and the same rules and incentives for everyone. Imposing varying requirements on physicians as opposed to hospitals could have unintended consequences that are contrary to value-based payment model goals.
Again, this is only a proposed rule and modifications are likely. Premier will continue to illustrate our stance on this with CMS.
Value-Based Payment is Evolving Quickly
Clint Eastwood wasn’t wrong. If you want to play the game, you’d better know the rules.
The broader value-based payment landscape is continuing to evolve at a fast pace, regardless of the proposed MSSP redesign implications. It’s high time for healthcare providers to learn how to succeed in these models in order to stay financially and competitively viable in the healthcare environment of tomorrow.
In the aforementioned Health Affairs report, the authors conclude by underscoring the importance of learning from organizations that are succeeding. This is something Premier has witnessed firsthand in its Population Health Management and Bundled Payment Collaboratives, which bring together hundreds of providers to compare performance and share learnings from each other’s experiences and successes.
Our experts are helping providers understand forthcoming changes and devise a strategy for moving forward successfully.
For additional information, contact us.