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New Reporting, Shared Losses Rules for MSSP ACOs in Disaster Areas

CMS relaxed quality reporting and shared losses requirements for MSSP ACOs impacted by recent natural disasters to offset the financial impact of the circumstances.

MSSP ACOs, quality reporting, and shared losses

Source: Thinkstock

By Jacqueline LaPointe

- In a new interim final rule, CMS modified quality reporting and shared losses policies for Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs) affected by recent natural disasters, such as this year’s major hurricanes and wildfires.

Hurricanes Harvey, Irma, and Maria, as well as the recent California wildfires, sparked concerns for MSSP ACOs in affected areas. ACO participants told CMS that the disasters could impact their ability to successfully report quality measures. Beneficiary displacement and infrastructure damage resulted in limited medical record data access for quality reporting and reduced beneficiary response rates on surveys.

MSSP ACOs taking on downside financial risk in Tracks 2 and 3 also may not be able to avoid shared losses because of the disasters, the organizations explained to CMS. The disasters resulted in significant upticks in emergency department use, hospitalizations, and skilled nursing facility care.

Chronically ill patients in disaster zones also faced limited access to primary care and were unable to acquire timely prescription refills, resulting in hospital and skilled nursing facility admission hikes, as well as increased use of other healthcare services.

The unpredictable growth in utilization and avoidable costs from the disasters prevents MSSP ACOs in downside financial risk tracks from meeting quality standards and avoiding shared loss payments.

READ MORE: For Ongoing ACO Shared Savings, Look Outside Inpatient, Primary Care

In addition, increases in healthcare utilization and costs stemming from the uncontrollable circumstances could affect the ACO’s performance year expenditures that are used to determine ACO benchmarks for future performance years, the organizations added.

Downside financial risk organizations warned CMS that they may not continue as an MSSP Track 2 or 3 ACOs if the organizations are required to repay financial losses resulting from extreme and uncontrollable circumstances.

CMS responded to MSSP ACO concerns by relaxing quality reporting requirements for organizations impacted by the hurricanes and wildfires in 2017.

The federal agency will set an ACO’s minimum quality score to the mean MSSP ACO quality score for all organizations participating in the 2017 performance year.

The policy will apply to ACOs if 20 percent or more of its assigned beneficiaries live in a region affected by the disaster or the ACO’s legal entity resides in a disaster area. CMS estimates that 22 percent of the MSSP ACOs will meet the minimum threshold.

READ MORE: How Pioneer ACOs Earn Shared Savings, Improve Care Quality

If MSSP ACOs in disaster areas can report quality measures in 2017, CMS will take the higher score if the organization’s reported score is greater than the mean MSSP score.

However, MSSP ACOs that receive the mean quality score will not be eligible to earn bonus points for year-over-year quality improvement points. The program awards up to 4 bonus points for ACOs that improve quality scores compared to the previous year.

CMS also noted that the relaxed quality reporting rules will impact MSSP ACOs participating in MACRA’s Merit-Based Incentive Payment System (MIPS) under the alternative payment model scoring track. ACOs that receive the mean quality score will receive a score of zero percent in the MIPS quality performance category for the 2017 performance year.

But the ACO providers will earn a complete score in the MIPS Improvement Activities category, giving the eligible clinicians enough points to qualify for a final MIPS score above the performance threshold.

To mitigate shared losses for downside financial risk ACOs, CMS will reduce any shared losses owed by MSSP ACOs impacted by extreme and uncontrollable circumstances in 2017.

READ MORE: Accountable Care Organizations Grow, But Face New Challenges

If an affected ACO owes shared losses payments under the existing MSSP methodology for the 2017 performance period, CMS will multiply the shared losses by the percentage of the total months in the performance year impacted by the uncontrollable circumstances and the percentage of the ACO’s assigned beneficiaries who live in an area affected by the uncontrollable circumstances.

“The approach we are adopting in this interim final rule with comment period balances the need to offer relief to affected ACOs with the need to continue to hold those ACOs accountable for losses incurred during the months in which there was no applicable disaster declaration and for the assigned beneficiary population that was outside the area affected by the disaster,” CMS wrote.

The federal agency also pointed out that the revised shared losses policy will not change the status of MSSP Track 2 or 3 ACOs as Advanced Alternative Payment Model participants under MACRA. The ACOs will still be eligible to earn the automatic 5 percent incentive payment based on 2017 performance.

CMS did not modify the financial benchmarking methodology for MSSP ACOs impacted by the hurricanes and wildfires this year. An ACO’s historical expenditures for the three base years should offset additional expenditures incurred during the disaster period, the federal agency explained. Increases in regional expenditures should also mitigate the effects of an ACO’s costs from the disaster.

While the federal agency did not change the benchmarking methodology, officials plan to revisit how the historical benchmarking approach works during a time of disaster in future rulemaking.

The interim rule will go into effect on Jan. 20, 2018. Stakeholders can comment on the rule until Feb. 20, 2018.

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