The Centers for Medicare and Medicaid Services on Thursday issued a proposed rule to overhaul the Medicare Shared Savings Program.

The program, which serves 10.5 million beneficiaries, was established by the Affordable Care Act as a key component of Obamacare’s delivery system reform initiatives. The MSSP—now called Pathways to Success by the Trump administration—is the program under which the vast majority of Medicare’s Accountable Care Organizations operate. ACOs, which are meant to improve quality and health outcomes while reducing the cost of care, are groups of doctors and other providers who voluntarily work with Medicare.

However, according to CMS, the ACA-created program has shown increases in net spending for the agency in part because the majority of ACOs—460 of the 561 ACOs—are not taking on risk for increases in costs. To address the problem, Pathways to Success is meant to save Medicare $2.2 billion over 10 years by meeting the goals of accountability, competition, engagement, integrity, and quality.

“After six years of experience, the time has come to put real ‘accountability’ in Accountable Care Organizations,” said CMS Administrator Seema Verma. “Medicare cannot afford to support programs with weak incentives that do not deliver value. ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.”

Seema Verma
Seema Verma

Under the MSSP, ACOs had up to six years without taking on risk, while being granted waivers from certain federal requirements. However, in its new rule, CMS proposes reducing the amount of time that an ACO can remain in the program without taking on risk down to—at most—two years.

As part of the agency’s proposal, eligible ACOs would be offered two tracks, which they would agree to participate in for at least five years. In addition, CMS is proposing a six-month extension for current ACOs whose agreements expire at the end of 2018, along with a special one-time July 1, 2019, start date that will have a spring 2019 application period for the new participation options.

“The proposed rule fails to account for the fact that building a successful ACO, let alone one that is able to take on financial risk, is no small task; it requires significant investments of time, effort and finances,” said Tom Nickels, executive vice president at the American Hospital Association.

“Hospitals and health systems must build upon their current infrastructure, which entails forming new and different contractual relationships and incentivizes successful strategies,” Nickels noted. “While some have already taken significant steps toward achieving such alignment, others are not as far down this path. A more gradual pathway is critical for hospitals and health systems that are interested in participating in risk-bearing models—particularly those that are exploring such models for the first time.”

Nickels added that for hospitals and health systems, and other providers that “want to come together to provide the highest quality care for patients, the proposed rule would create barriers to entry in transitioning to value-based care.” As a result, he said AHA urges CMS to “ensure that it strikes a balance between quality care for Medicare beneficiaries; savings for the Medicare program; and sufficient opportunity for ACOs to invest in the infrastructure necessary to successfully take on risk.”

ACOs are currently evaluated based on their performance, as well as their improvement on an array of metrics including how highly patients rate their doctors, how well clinicians communicate, whether patients are screened for high blood pressure, and their use of electronic health records.

“As part of the Administration’s broader MyHealthEData initiative, this proposed rule promotes interoperability and patient control of their medical data by proposing a new requirement around ACO adoption of the 2015 edition of Certified EHR Technology,” states the CMS announcement. “And as part of the Administration’s broader Meaningful Measures initiative to reduce burden, the proposal aims to streamline the measures that ACOs are required to report, to ensure that all measures have a meaningful impact on patient care.”

According to the AHA, the methodology for determining quality performance under the proposed rule “would remain mostly consistent with the existing MSSP program, but CMS solicits input on ways to enhance the program’s measure set, including how to address opioid use.” In addition, AHA notes that the agency’s rule also proposes to require ACOs to attest that a certain percentage of clinicians are using certified EHR technology.

CMS will accept public comments on the rule until October 16. Additional information about the Medicare Shared Savings Program Notice of Proposed Rulemaking can be found here.

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