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Medicare Shared Savings Program in Pathways to Success

Medicare Shared Savings Program in Pathways to Success

On December 31, 2018, the Facilities for Medicare and Medicaid Providers (CMS) revealed a ultimate rule (Remaining Rule) establishing the “Pathways to Success” program that overhauls the Medicare Shared Savings Program (MSSP). The Ultimate Rule largely mirrors CMS’ proposed rule (see our abstract right here), however with a number of modifications in response to public feedback. Accountable care organizations (ACOs) might take part in the Pathways to Success program starting July 1, 2019, and people ACOs in starting participation in July should submit to CMS a discover of intent to apply by January 18, 2019. CMS steerage on submission of the NOIA is obtainable right here. CMS expects to launch software deadlines in the close to future.

Vital options of the Pathways to Success program, that are described in element under, embrace:

  • Alternative of Monitor 1, Monitor 2 and Monitor Three with two participation choices: the BASIC monitor (consisting of 5 ranges) and ENHANCED monitor (comparable to the present Monitor Three),

  • Creation of a “glide path” that requires ACOs to incrementally settle for performance-based draw back danger over the settlement interval,

  • Requiring ACOs skilled with draw back danger to assume draw back danger whereas permitting inexperienced ACOs an choice to start participation with no draw back danger earlier than advancing to riskier fashions,

  • Alternative of the earlier three-year participation settlement interval with a five-year interval,

  • Creation of a six-month efficiency yr from July 1, 2019, via December 31, 2019, to coincide with the one-time mid-year begin date,

  • Revisions to the benchmarking methodology to incorporate regional developments from the start of an ACO’s participation in the MSSP,

  • Enlargement of ACOs’ use of telehealth and availability of the SNF Three-Day Rule Waiver, and

  • Potential for ACOs to present financial incentives to encourage beneficiaries to obtain sure main care providers.

MSSP Background

The MSSP was established by way of laws issued in November 2011 and subsequently revised in June 2015 (see our evaluation of these guidelines right here and right here). Beneath the MSSP, ACOs consisting of ACO members – akin to doctor teams and hospitals (recognized by Taxpayer Identification Quantity (TIN)) – and ACO suppliers/suppliers (particular person physicians and different suppliers/suppliers which will invoice via the TINs of individuals) agree to turn into accountable for the standard, value and general care furnished to Medicare beneficiaries. ACO individuals and suppliers/suppliers obtain Medicare fee-for-service (FFS) funds for providers rendered, which might be reconciled on the finish of every efficiency yr towards a historic benchmark decided by CMS. ACOs that fulfill sure high quality efficiency metrics and get monetary savings in contrast to the benchmark are eligible to share financial savings with CMS. Sure ACOs collaborating in two-sided fashions additionally settle for performance-based danger and subsequently could also be responsible for shared losses with CMS in the occasion prices exceed the ACO’s historic benchmark.


The Last Rule replaces Tracks 1, 2, and three beneath the MSSP with two tracks, referred to because the BASIC and ENHANCED tracks.

The BASIC monitor accommodates 5 ranges (Ranges A by way of E), which CMS refers to as a “glide path,” beneath which ACOs assume incrementally greater ranges of danger. Ranges A and B of the BASIC monitor haven’t any draw back danger and provides ACOs a chance to share up to 40 % of its financial savings generated in extra of the minimal financial savings fee (MSR). ACOs collaborating in Ranges C by way of E can be answerable for 30 % of losses in extra of the minimal loss price (MLR), however might be eligible for up to 50 % of financial savings in extra of the MSR. The losses in Ranges C by means of E are capped at growing quantities, such that the ACO assumes a probably larger share of losses because it progresses via the glide path (whereas remaining eligible for a similar quantity of shared financial savings at every degree). Notably, Degree E of the BASIC monitor (which is equal to the MSSP’s present Monitor 1+ mannequin) qualifies as an Superior Various Cost Mannequin (AAPM) for functions of the CMS High quality Cost Program (QPP). The ENHANCED monitor is actually the identical as MSSP Monitor Three and requires the collaborating ACO to assume performance-based danger. Underneath the ENHANCED monitor, as in Monitor Three, an ACO could also be eligible for financial savings of up to 75 % however is uncovered to potential shared losses between 40 % and 75 %. The ENHANCED monitor additionally qualifies as an AAPM.

Every ACO in the BASIC monitor will routinely advance to the subsequent degree inside the BASIC monitor beginning after the efficiency yr which commences January 1, 2020 (apart from sure inexperienced, low-revenue ACOs). Nevertheless, low-revenue ACOs which might be new authorized entities and are inexperienced can be permitted to keep at Degree B (with no draw back danger) for a further yr and can then be mechanically superior to Degree E for the next efficiency yr. An ACO may select to advance extra shortly alongside the glide path to settle for larger ranges of danger by skipping ranges.

Eligibility for BASIC and ENHANCED tracks

Eligibility for participation in both the BASIC or ENHANCED tracks relies upon upon an ACO’s expertise with performance-based danger and an ACO’s income. Underneath the Ultimate Rule, a low-revenue ACO is an ACO whose complete Medicare Elements A and B FFS income of its individuals is lower than 35 % of the whole Elements A and B FFS expenditures of the ACO’s assigned beneficiaries; high-revenue ACOs are ACOs that don’t meet the definition of a low-revenue ACO. CMS expects high-revenue ACOs will usually be these ACOs that embrace an institutional supplier (e.g., a hospital) as a participant. An ACO is skilled with performance-based danger the place both (1) it’s the similar authorized entity as an ACO that has beforehand participated in a Medicare performance-based danger initiative, resembling Tracks 1+, 2 or Three; or (2) at the very least 40 % of an ACO’s members have participated in a Medicare performance-based danger initiative inside the earlier 5 efficiency years.

Excessive-Income ACOs

Excessive-revenue ACOs which have expertise with performance-based danger will usually be restricted to collaborating in the ENHANCED monitor solely. Nevertheless, high-revenue ACOs which are presently collaborating in Monitor 1+ and that had a primary or second settlement interval starting in 2016 or 2017 might “renew” their participation settlement in the Pathways to Success program on both July 1, 2019 or January 1, 2020, and should take part in both Degree E of the BASIC monitor or the ENHANCED monitor. Excessive-revenue ACOs which are inexperienced with performance-based danger might usually take part in any Degree of the BASIC monitor or the ENHANCED monitor. Nevertheless, such ACO might not enter beneath Degree A if the ACO (1) beforehand participated in Monitor 1 of the MSSP or (2) has greater than 50 % of its members who’ve expertise in a Monitor 1 ACO. For instance, an ACO that included a hospital as a participant (and thus probably certified as high-revenue) and beforehand participated in Monitor 1, might enter the BASIC monitor at Degree B or larger or the ENHANCED monitor.

Low-Income ACOs

Low-revenue ACOs which have expertise with performance-based danger are in a position to enter the Pathways to Success program at both Degree E of the BASIC monitor or the ENHANCED monitor. Low-revenue ACOs which are inexperienced with performance-based danger might usually take part in any Degree of the BASIC monitor or the ENHANCED monitor. As famous above, new, low-revenue ACOs which might be inexperienced with performance-based danger might elect to stay in Degree B for a further yr after which the ACO would progress instantly to Degree E. Low-revenue ACOs might stay in the BASIC monitor for up to two five-year settlement durations, offered that such a low-revenue ACO should stay at Degree E (or transfer to the ENHANCED monitor) throughout the second settlement interval. For instance, if a brand new low-revenue ACO is shaped and that ACO is inexperienced with performance-based danger, the ACO might enter the BASIC monitor underneath Degree A in January 1, 2020, then transfer to Degree B as of January 1, 2021 and stay in Degree B till January 1, 2023, at which era it will transfer to Degree E.

2019 Efficiency Yr

Beneath the Ultimate Rule, ACOs might enter the BASIC or ENHANCED tracks beginning on July 1, 2019 – a one-time mid-year begin date to accommodate the CMS rulemaking course of and ACOs who entered right into a six-month extension of their prior agreements as of January 1, 2019. ACOs in participation in the MSSP as of July 1, 2019, are required to submit a Discover of Intent to Apply (NOIA) to CMS by January 18, 2019. CMS will resume its annual software and efficiency yr cycle for settlement durations starting January 1, 2020.

To take part beneath both monitor, an eligible ACO (as mentioned under) would enter right into a five-year participation settlement with CMS to take part in both the BASIC monitor or ENHANCED monitor. For ACOs that make the most of the one-time begin date of July 1, 2019, the preliminary settlement interval will probably be for 5 and a half years. CMS explains that MSSP outcomes have proven that “ACOs tend to perform better the longer they are in” the MSSP, and the prolonged settlement durations give ACOs extra time to carry out towards their benchmark.

ACOs which are presently in the center of a three-year MSSP participation settlement can be allowed to proceed their participation beneath the phrases of that settlement till its expiration; nevertheless, CMS affords these ACOs an choice to terminate early to be a part of the Pathways to Success program. Moreover, ACOs whose agreements have been prolonged for six months from January 1, 2019, via June 30, 2019, shall be in a position to begin new participation agreements in the Pathways to Success program as of July 1, 2019.

Minimal Savings Price/Minimal Loss Price

Within the Ultimate Rule, CMS finalized a number of modifications pertinent to the choice and timing of the MSR/MLR, and it additionally took steps to tackle the MSR/MLR for ACOs with small inhabitants sizes.

ACOs collaborating in a one-sided mannequin of the BASIC monitor’s glide path (Ranges A or B) could have a variable MSR decided based mostly upon the variety of beneficiaries assigned to the ACO. The variable MSR might be decided in the identical method that the MSR was decided underneath Monitor 1. Prior to transitioning to a two-sided mannequin underneath the BASIC monitor, an ACO could have the chance to choose its MSR/MLR. ACOs collaborating in the ENHANCED monitor may even find a way to choose their MSR/MLR. As soon as an ACO selects its MSR/MLR, it might not change it all through the settlement interval. ACOs collaborating in a two-sided mannequin (BASIC monitor Ranges C via E or ENHANCED monitor) will probably be in a position to choose a MSR/MLR among the many following out there choices:

  • zero % MSR/MLR;
  • Symmetrical MSR/MLR in zero.5 % increments between zero.5 % and a couple of %; or
  • Symmetrical MSR/MLR that varies based mostly on the ACO’s variety of assigned beneficiaries.

For ACOs which might be unable to keep 5,000 beneficiaries, there’s concern that the consequences of regular expenditure variation might both unduly reward or penalize such ACOs due to the out-sized impact regular expenditure variations might have on a small inhabitants measurement. In response to this concern, CMS will allow a variable MSR/MLR if an ACO’s assigned beneficiary inhabitants falls beneath 5,000 for the relevant efficiency yr.

Beneficiary Task

Underneath the Ultimate Rule and starting July 1, 2019, CMS will permit all ACOs collaborating in the Pathways to Success program (whether or not on the BASIC or ENHANCED monitor) to select their beneficiary task methodology: (1) potential task or (2) preliminary potential task with retrospective reconciliation. ACOs will even be allowed a chance to change their number of beneficiary task methodology on an annual foundation.

Observe that the November 2018 doctor charge schedule ultimate rule revised the definition of “primary care services” used in the beneficiary task methodology. Particularly, the definition of main care providers was expanded to embrace process codes for advance care planning, administration of well being danger evaluation, extended analysis and administration or psychotherapy providers past the standard time of the first process, annual melancholy screening, and alcohol misuse screening, in addition to add-on codes for go to complexity associated to analysis and administration providers.

Waiver of the SNF Three-Day Rule

Within the Last Rule, CMS adopts its proposal to broaden entry to the Expert Nursing Facility (SNF) Three-Day Rule Waiver (SNF Waiver). The SNF Waiver waives applicability of the Medicare cost requirement of a three-day inpatient keep as a prerequisite for Medicare protection of post-acute SNF providers. Eligible ACOs can get hold of a SNF Waiver in half by getting into into affiliate agreements with SNFs.

The Remaining Rule expands entry to the SNF Waiver to ACOs accepting performance-based danger in the BASIC or ENHANCED tracks and allows risk-bearing ACOs to apply for the SNF Waiver no matter their selection of beneficiary task methodology. Beforehand, solely ACOs that chosen potential task and took part in Monitor Three (now the ENHANCED Monitor) or the Monitor 1+ mannequin have been eligible to apply for the SNF Waiver. Notably, ACOs in the midst of MSSP settlement durations in Tracks 1+ or Three that proceed collaborating in these tracks additionally stay eligible to apply for the SNF Waiver.

CMS additionally expands entry to the SNF Waiver by permitting essential entry hospitals and different small rural hospitals offering SNF providers beneath a swing mattress association to associate with Pathways to Success ACOs as SNF associates for functions of the SNF Waiver.


At present, CMS calculates the fee benchmark for brand spanking new individuals in the MSSP based mostly in half on using nationwide progress charges to development ahead Medicare expenditure knowledge for every of the years making up the ACO’s historic benchmark. Beginning with an ACO’s second or successive renewal time period in the MSSP, CMS shifts to use regional progress charges to calculate an ACO’s historic benchmark, which is predicated on the ACO’s precise risk-adjusted historic expenditures. Within the Ultimate Rule, CMS revised the ACO benchmarking methodology to tackle its considerations that (1) the regional adjustment can lead to overly inflated benchmarks for ACOs which are comparatively low spending in contrast to their area, and (2) ACOs with larger spending in contrast to their area might have little incentive to take part in the MSSP when confronted with a considerably lowered benchmark. Efficient for all ACOs getting into or renewing in the Pathways to Success program starting on July 1, 2019, historic benchmarks will use a mix of nationwide and regional development elements; nevertheless, the ACO’s historic benchmark will now additionally incorporate regional changes. Additional, the load of the regional adjustment will part in over time based mostly on whether or not the ACO has larger or decrease expenditures for its service space and is capped at a most weight of 50 % (down from the present cap of 70 %). These modifications are meant to extra precisely mirror prices of the regional service space whereas encouraging higher participation from each larger and lower-cost ACOs.


At present, there are a number of necessities for Medicare reimbursement of telehealth providers. A few of these necessities embrace that the affected person receiving telehealth providers have to be at an “originating site” situated in sure geographic areas. The originating website additionally have to be a doctor’s workplace, hospital or different specified well being middle. Within the Remaining Rule, CMS relaxes these necessities for telehealth providers offered by an ACO supplier/provider to beneficiaries prospectively assigned to an ACO through the related efficiency yr. For sure telehealth providers offered by eligible practitioners billing via the TIN of an ACO participant, CMS removes the geographic limitation on the originating website and permits a affected person to use his or her house as an originating website. Nevertheless, Medicare won’t pay a facility payment the place the originating website was a affected person’s house, nor does this coverage apply to telehealth providers not applicable for furnishing in a affected person’s house if the originating website is the affected person’s residence. These telehealth cost insurance policies are efficient for providers furnished on and after January 1, 2020, and apply solely to ACOs collaborating in a two-sided danger mannequin that select to assign beneficiaries utilizing the potential task technique.

Beneficiary Incentives

Beneath the Ultimate Rule, ACOs bearing two-sided danger might set up beneficiary incentive packages that present incentive funds to assigned beneficiaries who obtain qualifying main care providers. Incentive funds to beneficiaries could also be in quantities up to $20 (adjusted yearly by the share improve in CPI) and have to be money equivalents (comparable to a verify, debit card or different traceable money equal) and never money. A qualifying main care service is a service with respect to which coinsurance applies beneath Half B and is furnished by an ACO skilled who qualifies as a main care doctor, a doctor assistant, nurse practitioner, licensed (i.e., medical) nurse specialist, a federally certified well being middle or rural well being clinic. Incentive funds have to be offered by the ACO inside 30 days of a beneficiary receiving a qualifying service.

ACOs should notify beneficiaries of the motivation program prior to or at a beneficiary’s first main care service go to of every efficiency yr. In any other case, the ACO might not promote this system to a beneficiary or any potential affected person enrolled in a federal well being care program. ACOs should additionally keep data of the motivation funds and should not settle for funds for incentives from an outdoor entity or in any other case shift such prices to a federal well being care program.

Importantly, materials modifications to present beneficiary incentive packages and all new packages have to be accepted by CMS. CMS will approve packages established as of July 1, 2019, for an 18-month time period, or as of January 1, 2020, for a 12-month time period. Moreover, in the Last Rule, CMS additionally amends a present regulation that permits ACOs and their individuals to present in-kind gadgets and providers as incentives to beneficiaries to make clear that such in-kind incentives may be offered to all Medicare fee-for-service beneficiaries – not simply beneficiaries assigned to an ACO – so long as they meet relevant necessities.

Reimbursement Mechanism

ACOs making use of to enter a two-sided mannequin beneath the Pathways to Success program have particular necessities with respect to demonstrating that they’ve established an enough reimbursement mechanism to repay shared losses to CMS. The reimbursement mechanism could also be by means of an escrow account, line of credit score or surety bond. The reimbursement mechanism quantity varies based mostly upon the relevant monitor. For a BASIC or ENHANCED monitor ACO, the quantity have to be equal to the lesser of (1) 1 % of the Medicare Elements A and B FFS expenditures for the ACO’s assigned beneficiaries for the newest calendar yr for which 12 months of knowledge is accessible; or (2) 2 % of the Medicare Elements A and B FFS income of its ACO members for the newest calendar yr for which 12 months of knowledge is accessible. CMS will yearly recalculate the reimbursement mechanism quantity, and if it falls under a sure degree, CMS would require the ACO to improve its reimbursement quantity. Usually, the mechanism have to be in impact throughout the ACO’s participation in a two-sided mannequin and for 12 months thereafter.

Beneficiary Notifications

Within the Ultimate Rule, CMS additionally addressed its concern that beneficiaries could also be unaware of the totally different assets obtainable relating to the MSSP and what participation means for the beneficiary’s care. CMS, subsequently, expanded necessities for content material and supply of beneficiary notifications. Going ahead, ACOs should notify all Medicare FFS beneficiaries of the next: (1) every ACO supplier/provider collaborating in the ACO, (2) the beneficiary’s capacity to decline claims knowledge sharing and (Three) the beneficiary’s potential to change the clinician designated as their main clinician for functions of voluntary alignment (and the method for doing so). As well as, the ACO should notify its assigned beneficiaries of any beneficiary incentive program. Discover have to be offered in writing at or prior to the beneficiary’s first main care service go to of every efficiency yr. To alleviate any related administrative burden, CMS might be creating template beneficiary notices for ACOs and ACO suppliers/suppliers to use.

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