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CMS MSSP Proposed Rule Provides Clarity, Additional Risk Track, and Potential Relief from ACO Exclusivity for Certain Specialists

On December 1, 2014 the Centers for Medicare and Medicaid Services (CMS) issued a Proposed Rule that would implement several changes to the Medicare Shared Savings Program (MSSP). The most significant proposed changes relate to extending the term for participating in the MSSP under Track 1, the beneficiary assignment process, data sharing, the addition of a third risk track, and codification of some of CMS’ current guidance relating to the MSSP and Accountable Care Organizations (ACOs). Notably, the proposed changes to the beneficiary assignment process would have the indirect effect of allowing certain specialists to participate in multiple ACOs; which, under the current MSSP regulations, is prohibited in most cases. If implemented, this change would be significant in that many specialty groups have chosen not to participate in ACOs due to the exclusivity requirement. The following is a summary of some of the major provisions of the Proposed Rule.

Agreement Renewal for Track 1 ACOs

Under current MSSP rules, ACOs have the option of choosing to participate under two different tracks—Track 1 or Track 2. Under Track 1, ACOs are eligible to share in 50% of any savings but assume no downside risk. Track 2 ACOs share both savings and downside risk. Currently, Tack 1 ACOs which wish to continue participating in the MSSP after the expiration of the initial three year term, can only do so if they enter Track 2. This policy is designed to encourage ACOs to gradually assume financial risk.

The Proposed Rule would allow Track 1 ACOs to renew under the Track 1 model and avoid taking on risk under Track 2, but in exchange would receive a lower share of savings during the renewal term—40%, instead of 50%. CMS cited stakeholder feedback which indicated that Track 1 ACOs needed more time to gain more experience in managing the health of their attributed members before taking on financial risk. The proposed change is expected to especially encourage smaller, less experienced provider-sponsored ACOs to continue participating in the MSSP without the fear of having to assume downside risk.

Changes to Track 2 ACO Savings/Loss Shares

Under the current Track 2 model, an ACO must generate savings in excess of a flat 2% of the ACO’s cost target (benchmark), in order to share in any savings. This is called the Minimum Savings Rate (MSR). A similar threshold applies to a Track 2 ACO’s share of losses—the ACO is only responsible for its share of losses if losses exceed 2% of the benchmark. This is called the Minimum Loss Ratio (MLR). The MSR/MLR are designed to ensure that any savings/losses generated in the managing the health of the attributed members are in fact a result of the ACO’s implementation of care management techniques, rather than purely a function of normal variations in the health status of the population. In contrast, under the current Track 1 model the MSR/MLR are based on a sliding scale (ranging from 2.0%-3.9%) tied to the size of the population. The MSR/MLR are inverse to the population size—the smaller the ACO’s population, the higher the MSR/MLR. The practical effect of this design is to require smaller ACO’s to achieve a higher percentage of savings before being eligible to share in savings; but it also gives greater protection from downside risk to smaller ACOs. Nearly half of the current ACOs have populations fewer than 10,000 members.

The flat, relatively low 2% MSR/MLR under Track 2 was originally designed to entice larger ACOs to enroll in Track 2, where the ACO’s share of savings is higher than under Track 1, 60% vs. 50%. However, of the current 330 ACOs enrolled in the MSSP only 5 have thus far elected the Track 2 option. In light of the disproportionately large number of smaller ACOs, and in order to encourage broader participation in the Track 2 model, under the Proposed Rule CMS is proposing to use the same sliding scale MSR/MLR for Track 2 ACOs as Track 1 ACOs. CMS assumes that the greater protection against downside risk afforded by this new MSR/MLR configuration will encourage greater numbers of small ACOs to elect Track 2.

New Track 3 Option

In furtherance of its stated goal of encouraging providers to assume greater accountability and performance risk for the patients they serve, CMS is proposing to add a third MSSP participation option—the “Track 3” option. Track 3 would be targeted toward more experienced ACOs seeking to assume a greater share of performance risk. The Track 3 option would be very similar to Track 2 with a few key differences: 1) members would be attributed to the ACO on a prospective basis (as in the Pioneer program), rather than the preliminary prospective/retrospective reconciliation model used under Tracks 1 and 2; 2) the ACO’s shared savings/loss percentage would be 75%, compared to 50% and 60% under Tracks 1 and 2, respectively; 3) the MSR/MLR would be a flat 2%; and 4) the cap on the ACO’s share of any savings would be 20% of the ACO’s benchmark, and its share of losses would be capped at 15% of its benchmark, as compared to the 15% cap on savings and 5%-10% cap on losses under Track 2. Other distinctions between Tracks 2 and 3 include the manner in which the ACO’s quality score would impact its share of losses under Track 3. In contrast to Track 2, a higher quality score under Track 3 would not reduce the ACO’s share of losses.

Proposed Changes to Patient Attribution Methodology

Under the current MSSP rules, members are assigned to an ACO using a 2-step process--Step 1: a member is assigned to an ACO if he/she received the plurality of his/her primary care services from a primary care physician in that ACO; Step 2: if the member did not receive any primary care services from a primary care physician (whether in or outside of the ACO), but received at least one primary care service from a specialist physician (of any specialty) in the ACO, then the member is assigned to that ACO if he/she received the plurality of his/her primary care services either from that ACO specialist physician, or a combination of that ACO specialist and other primary care practitioners in the ACO, such as NPs, PAs, and CNSs. Both “primary care services” and “primary care physician” are defined terms under the MSSP rules.

In the Proposed Rule, CMS seeks to change this 2-step attribution process in 2 key respects. First: CMS is proposing to include primary care services provided by NPs, PAs and CNSs (along with primary care physicians) under Step 1 when determining whether the member received the plurality of his/her primary services from a provider in that ACO. Thus, this determination would no longer be limited to just services provided by primary care physicians in the ACO. CMS indicated that this change would reflect the increasingly important role played by physician-extenders, such as NPs, PAs, and CNSs in the delivery of primary care, and the fact that many beneficiaries already use these provider types as their primary care providers. In addition, CMS indicated that since the beginning of the MSSP nearly 92% of ACO beneficiaries have been assigned under Step-1. Second: CMS is proposing to exclude certain specialists from the assignment process under Step-2, in particular those who rarely, if ever, provide primary care to beneficiaries. In doing so, the assignment process would be more focused on the delivery of care by primary care providers and specialists who have historically served in primary care roles, eg. nephrology, Ob/Gyn, cardiology, oncology and endocrinology, among others. CMS is further proposing to codify the specialty areas which would be excluded from the definition of “specialist physician”. Notable examples would include most hospital-based specialties, such as radiology, pathology, and anesthesiology. Other excluded specialties would include orthopedic surgeons, urologists, cardiac and vascular surgeons, ENTs and dermatologists.

Provider Exclusivity

Under the current MSSP rules, if any specialist in a physician group bills a primary care service code, then every specialist in that group, regardless of specialty, who bills under the group’s Federal Tax ID Number (TIN) must be exclusive to one ACO. This rule has created reluctance on the part of many specialty groups to join ACOs, especially groups in subspecialties like those listed above, and for groups located in rural areas whose service areas typically cover large geographic areas and which rely on referrals from physicians affiliated with ACOs of potentially competing health systems in that service area. By reducing the scope of specialties considered in the attribution process, the Proposed Rule would make it possible for physicians and groups on the list of excluded specialties to participate in multiple ACOs, whether or not they submit claims for primary care services. This would be especially helpful to smaller, single specialty groups. It would also likely result in more specialists joining ACOs, and could, in turn, result in lower overall costs of care through better care coordination across all specialties, including the excluded specialites.

Other Notable Proposed MSSP Changes

In addition to the major changes described above, the Proposed Rule also targets several other MSSP areas for improvement, including:

  • Beneficiary Opt-Out of Data Sharing: Under the current MSSP rules, ACOs must either notify ACO beneficiaries at the point of care of their option to opt-out of Medicare sharing the beneficiary’s claims data with the ACO and other ACO providers, or provide notice of such right via mail at least 30 days prior to requesting the beneficiary’s data from CMS. The 30 day wait period is intended to allow the beneficiary the opportunity to opt-out. The current MSSP rules allow beneficiaries to opt-out either by notifying the ACO, which in turn notifies Medicare, or by calling 1-800-Medicare. Many ACOs complained to CMS that this process is cumbersome and expensive, and causes delays in the ACO’s receipt of beneficiary claims data. The delay in receipt of beneficiary claims information has resulted in delays in ACOs’ ability to begin care coordination and impact utilization of resources, particularly for chronically ill patients. Under the Proposed Rule CMS is attempting to remedy this problem by eliminating the requirement to send opt out letter via email, and instead allow ACO providers to simply post signs in their offices informing beneficiaries of the right to opt-out of data sharing by calling 1-800-Medicare.

  • Flexibility on Population Size. Under the current MSSP rules, if an ACO’s attributed population falls below 5,000 members, CMS will issue a warning notice advising the ACO of non-compliance, and may require the ACO to submit a corrective action plan indicating how it intends to reach the membership threshold again. Several ACOs commented to CMS that it is very difficult to bring the population size back up to the required level due to lengthy process of enrolling new ACO providers. CMS is therefore proposing to extend the timeframe within which the ACO can meet the 5,000 member minimum threshold before sending the ACO a warning notice.

  • Codification of Existing MSSP Guidance. With the exception of changes to the quality measures applicable under the MSSP, CMS has not issued any regulations amending the MSSP since its inception. CMS has, however, issued routine guidance, particularly in the area of providers’ enrollment in ACOs, participation requirements and agreements, and changes in the makeup of an ACO’s participating providers. CMS indicated that it has received numerous questions around the eligibility of different providers and entity types to participate in an ACO, and has found several instances of provider non-compliance with MSSP requirements. As a result, under the Proposed Rule CMS would codify much of its existing guidance around providers’ relationships with ACOs. CMS indicated that it intends to specifically prohibit existing provider network entities, such as IPAs, from enrolling in the MSSP as ACOs, unless a separate network entity is formed specifically for the purpose of participating in the MSSP.

There is a 60 day comment period on the Proposed Rule. The rule would take effect for MSSP contract years starting in 2016.

© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume IV, Number 342

About this Author

The Health Care Practice Group has represented the health care industry for more than 90 years, and we currently maintain one of the largest national practices in the representation of health care organizations. Our practice serves clients nationwide and our health care lawyers have in-depth knowledge of this complex, highly regulated industry and the rapidly changing issues that impact the various sectors of the health care industry (including providers, health care vendors, health professional...