Improved ACO Participation Saves $240M, Says CMS Final Rule
By - Established payment algorithms of Accountable Care Organizations (ACOs) are up for review. Following a hearty cache of recently proposed physician fee schedules and payment policies, the Centers for Medicare & Medicaid Services (CMS), in conjunction with the department of Health and Human Services (HHS), releases a new 592 page rule today – CMS-1461-F – focused on changing payment structures for Medicare, the Medicare Shared Savings Program, and ACOs.
Some of the primary objectives of the Medicare Shared Savings Program, of which 400 organizations currently participate, are to promote patient population accountability, promote coordination of fee-for-service items and services, and stimulate active investment in infrastructure and redesigned care process with a result of high quality, cost effective healthcare.
Those healthcare providers under the Medicare Shared Savings Program participating in ACOs will continue to receive traditional Medicare fee-for-service payments under Parts A and B. Those ACOs that meet certain quality and savings requirements may be eligible to receive a shared savings payment with Medicare, CMS confirms.
“Our intent in this rulemaking is to make refinements to the Shared Savings Program, to encourage continued and enhanced stakeholder participation, to reduce administrative burden for ACOs while facilitating their efforts to improve care outcomes, and to maintain excellence in program operations while bolstering program integrity,” CMS states within the final rule.
In direct alignment with the Shared Savings Program, CMS' final rule promotes a tri-fold result to provide enhanced care for individuals, advance the health of various populations, and decrease expenses.
Through a reduction of administrative burden and improved transparency of data sharing and ACO-based financial initiatives, CMS proposes substantial modifications to its currently implemented program rules.
One of many modifications CMS proposes involves “resetting the benchmark in a second or subsequent agreement period by integrating previous financial performance and equally weighting benchmarks for subsequent agreement periods.”
Additionally, CMS intends to strengthen ACO willingness to embrace performance-based risk. For instance, CMS aims to amend the assignment methodology holding ACOs responsible for those beneficiaries who selected ACO practitioners with responsibility over their care.
CMS predicts sizable savings with active ACO participation
Improved ACO participation will lead to a substantial increase in net savings, CMS confirms. The total cumulative average impact adds up to $780 million in net federal savings, CMS states. Without the changes adapted within CMS’s final rule, such savings may comparably peak at $540 million, CMS says.
“We estimate that at least 90 percent of eligible ACOs will renew their participation in the Shared Savings Program when presented with the new options,” CMS states. “This expansion in the number of ACOs willing to continue their participation in the program is estimated to result in additional improvements in care efficiency of a magnitude significantly greater than the reduced shared loss receipts estimated at baseline and the added shared savings payments,” adds CMS.
CMS additionally predicts the cumulative average of ACO shared savings payments from 2016 through 2018, combined with average aggregate start-up investment and continuous operating costs of $822 million, will yield a net private benefit of $278 million.
As CMS continues to finalize rules for the Medicare Shared Savings Program and other related initiatives, it is hopeful economically smart, high quality of care will improve the collective health of beneficiaries and lay down a solid foundation for successful ACO adaption.
