The AHA recently recommended specific changes to the Medicare Shared Savings Program (MSSP) to encourage accountable care organizations (ACO) to invest in the infrastructure necessary to successfully take on risk.

“While some of [the Centers for Medicare & Medicaid Services’] proposed improvements are welcome and could make the program more attractive to new applicants and existing ACOs, we question whether other proposals go far enough to correct misguided design elements that emphasize penalties rather than rewards,” wrote AHA Executive Vice President Rick Pollack, commenting on a proposed MSSP rule published Dec. 8.

More than 400 organizations participate in the MSSP and provide care to some 7.2 million Medicare enrollees. The program ties financial incentives to the organization's performance on quality targets. The proposed MSSP rule would affect new ACOs entering the program in January 2016 as well as MSSP ACOs renewing their agreements for another three year performance period.

CMS said the proposed rule is intended to give more flexibility to those who want to renew their contracts, encourage ACOs to take on more performance-based risk, put more emphasis on primary care and streamline data sharing.

But the AHA faulted the proposal for “applying too many sticks and offering too few carrots.”

The association said hospitals and other providers had invested significant time, energy and resources to develop the clinical and operational infrastructures necessary to better manage patient care.  But they need CMS to “modify the shared savings determination so that more ACOs can share in more of the savings they generate,” Pollack’s Feb. 5 letter stated. “This will allow them to continue to invest in the program and give ACOs adequate tools to coordinate and manage care.”

In a final rule issued to kick off the program in October, 2011, CMS set up a Track 1 “savings-only” model without financial risk during the initial contract, while letting others choose a Track 2 model that includes a risk of losses in exchange for a greater share of the savings.

The Track 2 two-side model’s higher maximum sharing rate is 60%, provided that the minimum shared savings rate threshold of 2% is reached. The proposed rule would remove the fixed 2% threshold and base the rate on the size of the beneficiary population assigned to a Track 2 ACO, which could place the savings rate at 3.9% for ACOs covering between 5,000 to 6,000 beneficiaries, the AHA said.

“This proposed change would mean that Track 2 ACOs could generate more losses before being required to share in the losses, but they also would have to demonstrate higher savings before being able to share in the savings,” the AHA stated.

Under the proposed rule, participants can continue to stay in Track 1, which doesn’t involve downside risk and is the ACO model for more than 98% of participants. But it proposes lowering participants’ level of eligible shared savings from 50% to 40%. The proposed rule also would set up a new Track 3 two-sided shared savings and losses model that requires greater performance risk in exchange for greater potential savings.

In its letter, the AHA made five specific requests that could help create incentives for MSSP participation. As the organization notes, it will be necessary for the CMS to attract and maintain long-term ACO participation to meet Department of Health and Human Services Secretary Sylvia Burwell’s goal of tying 30% of fee-for-service Medicare payments to alternative payment models by the end of 2016, and to increase that amount to 50% by 2018. 

The AHA recommended CMS do the following: 

• balance the risk/reward equation in such a way that ACOs are encouraged to assume additional risk without penalizing ACOs that need “additional time and experience with the MSSP” before they are able to take on additional risk; 

• modify the assignment of Medicare beneficiaries to put the focus on primary care and give ACOs assignment options “allow[s] them to better identify and target services to those beneficiaries for whose care they will be held accountable;”

• implement payment waivers, like the skilled nursing facility three-day stay rule, telehealth payment restrictions and the two-midnight rule, that would open up care coordination opportunities;

• adjust the benchmark methodology to both account for regional cost differences and “ensure that an ACO does not have to compete against its own best performance;” and

• create a “rapid response” system that gives ACOs timelier and better data to assist in care coordination efforts. 

For more on the letter, click here.

Hear what Ashley Thompson, AHA vice president and deputy director of policy, has to say about the proposed MSSP rule. Listen in here.