Policy & Regulation News

AHA Reacts to Proposed Rule for Medicare Shared Savings Program

By Stephanie Reardon

CMS’s proposed changes to the Medicare Shared Savings Program would save approximately $280 million more than the median net savings in federal funds from 2016 through 2018.

- The Medicare Shared Savings Program (MSSP) seeks to save money for Medicare and qualified Accountable Care Organizations (ACOs). On December 8, 2014, the Centers for Medicare & Medicaid Services (CMS) proposed a new rule to make changes to refine MSSP and improve transparency throughout the program.

CMS’s proposal indicates the suggested changes would save approximately $280 million more than the median net savings in federal funds from 2016 through 2018. It would also reduce the median shared loss amount by $140 million.

“A key driver of an anticipated increase in net savings is through improved ACO participation levels in a second agreement period,” the proposed rule states. “We estimate that at least 90 percent of eligible ACOs will renew their participation in the Shared Savings Program if presented with the new options.”

The Rule continues by indicating it estimates ACOs continued participation will result in a greater improvement in care and services.

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  • “By encouraging greater Shared Savings Program participation, the changes proposed in this rule will also benefit beneficiaries through broader improvements in accountability and care coordination than would occur under current regulations,” the proposed rule states.

    On February 5, 2015, the American Hospital Association (AHA) has responded to these proposed changes in a letter to CMS Administrator, Marilyn Tavenner. In the letter, AHA indicates the need for CMS to encourage new ACOs to participate in MSSP. Yet, it also indicates that CMS has not provided enough incentive.

    “As currently designed, and as proposed in this rule, the MSSP applies too many ‘sticks’ and offers too few ‘carrots’ to participating providers and, possibly, to those entities contemplating MSSP participation,” the letter states. “In other words, the MSSP places too much risk and burden on providers, with too little opportunity for reward in the form of shared savings.”

    Instead, the AHA suggests several changes to improve MSSP.

    • Balance risk and reward without penalizing ACOs for needing more time or experience with the program.
    • Change Medicare beneficiaries’ assignment to focus on primary care services and expand assignment options for ACOs to improve services to beneficiaries
    • Eliminate challenges to care coordination through the adoption of payment waivers
    • Change the benchmark method to avoid an ACO from competing against its own performance
    • Determine a method to provide more timely data to ACOs

    “These changes would help strike a balance between better, quality care for Medicare beneficiaries; savings for the Medicare program; and sufficient opportunity for rewards to encourage ACOs to invest in the infrastructure necessary to successfully take on risk.” the letter states.

    A previous report on EHRIntelligence.com indicated that thus far, the ACOs currently involved in the MSSP saw varied financial results. Out of 220 ACOs that participated in the program, 52 saw reduced levels in spending and qualified for shared savings.