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Taking the Medicare Shared Savings Program to the Next Level

Earlier this year, the Centers for Medicare & Medicaid Services (CMS) announced strong Next Generation Accountable Care Organization (NGACO) results with 32 of the 44 participants earning shared savings, saving Medicare $129 million. Six of these NGACOs participate in the Premier Population Health Management Collaborative, achieving higher average quality scores and significantly more savings compared to all others. In fact, Premier-facilitated ACOs constitute only 13 percent of all NGACOs, but deliver more than 36 percent of the model’s overall savings.

Premier is encouraged that CMS is working on a new iteration of the NGACO program.

This model represents the most advanced of all Medicare’s ACO models. Participating NGACOs take the greatest amount of risk, but can also earn the greatest reward compared to any of the tracks in the Medicare Shared Savings Program (MSSP). In fact, NGACOs represent a logical next step from MSSP.

Providers need a clear vision of what lies ahead to determine which models to embrace and how to invest in care redesign. An annual rulemaking approach, like the process for MSSP, would create stability in the NGACO program by allowing participants advanced notice of changes and the opportunity to comment, while aligning timelines for ACO models. CMS should make NGACO a permanent voluntary program, on its own or as an optional track within MSSP. This will give ACOs the ability to evaluate all options and determine the most appropriate model. As a part of making NGACO a permanent option, other enhancements will also help achieve both patient-centric and cost-effective care.

Allow for true primary care capitation within ACO models

  • CMS should test an approach with true capitated payments, including primary care capitation, unlike the option available in the current Next Generation ACO model.
  • Participating providers can now take part in the capitated arrangements with NGACOs via an all-inclusive population-based payments (AIPBPs) option, but there are serious flaws in the structure. Premier recommends a set per-beneficiary per-month (PBPM) payment.
  • The Next Generation ACO model is best equipped to provide an option for expanding capitation. Ideally, this will give clinicians, hospitals and other ACO participants the aligned incentives to make the best decisions about care with their patients, while also reducing unnecessary spending.

Allow multiple choices of incentives

  • Currently participants can select either from infrastructure payments, performance-based payments, or AIPBP (capitation-like), but they cannot select all of them. We recommend that participants be allowed to choose any or all of these options so they can better innovate the care delivery process.

Provide greater stability in ACO Models

  • Providers need greater additional regulatory and payment flexibility to truly innovate the care delivery process, such as targeted benefits for certain populations similar to the approach in the Medicare Advantage Value Based Insurance Design Model.
  • NGACO currently offers flexibility through numerous waivers, including a skilled nursing facility three-day rule, coinsurance and telehealth waivers; however, the documentation, reporting and auditing required for these waivers are cumbersome. CMS should ease the burden associated with implementing these waivers.
  • The rollout of several alternative payment models (APMs) within a relatively short time frame often results in portions of the patient population qualifying for multiple models. Because model overlap impacts the financial performance of providers who participate in multiple models, CMS should give preference to the total cost of care models. Specifically, CMS should:
    • Give attribution and financial reconciliation preference to longitudinal, total cost of care models;
    • Allow ACO entities to choose if beneficiaries can be aligned to other models (that is NGACOs should be able to choose if their beneficiaries can also be included in bundled payments); and
    • Reward APM entities participating in multiple risk-based models.

Improving the accuracy of measuring ACOs’ savings

  • Adjusting financial benchmarks will help to remedy problems with the current approaches that raise the bar for successful ACOs every year and disadvantage low cost regions, as well as providers who are the dominant provider in the region. Viable approaches include:
    • Removing the ACO’s beneficiaries from the historical benchmark calculation;
    • Continuing to allow regional spending to account for the majority of the benchmark determination; and
    • Exploring a tiered benchmarking methodology, where benchmarks are increased for low cost regions and decreased for high cost regions.
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