Policymakers Concerned with ACO Shared Savings Under Updated MSSP

September 14, 2018 - The House Committee on Ways and Means recently voiced concerns that proposed changes to the shared savings arrangements under the Medicare Shared Savings Program (MSSP) overhaul would harm accountable care organizations (ACOs).

In a letter to CMS Administrator Seema Verma, Representatives Kevin Brady (R-TX) and Peter Roskam (R-IL) urged the federal agency to reconsider the cutting in half of the shared savings rate for ACOs in the one-sided financial risk track of the recently proposed Pathways to Success initiative.

Under the proposed initiative, the shared savings rate for ACOs in the one-sided financial risk track would fall from 50 percent to 25 percent.

“As you consider stakeholder comments on this proposal, we ask that you bear in mind one impactful issue all ACOs and healthcare providers must weigh in judging participation in this program and taking on risk: stability,” Brady and Roskam wrote. “As new contracts for shared savings arrangements are drawn up, we ask that a component of these negotiations include some level of regulatory and payment stability for the length of the agreement across all aspects of Medicare.”

The policymakers also commended CMS in the letter for pushing MSSP ACOs to take on two-sided financial risk. The proposed Pathways to Success initiative would require participating organizations to assume two-sided financial risk within two years versus six years under the current iteration of the MSSP.

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“It is important that the ACO program reward those who truly are improving care through coordination and doing so while creating efficiencies that might reduce unnecessary spending in the Medicare program writ large,” the letter stated. “However, we also recognize a central point in this proposal – that participation must include all parties carrying risk, or having ‘skin in the game.’”

Healthcare industry experts disagree with the House committee, arguing the accelerated two-sided risk adoption timeline would negatively impact ACOs.

“It’s naïve to think that ACOs that aren’t ready can be forced to take on risk, given that the program is voluntary,” the National Association of ACOs (NAACOS) recently stated. “The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value.”

“This would be a significant setback for Medicare payment reform efforts and would undermine implementation of the overwhelmingly bipartisan Medicare Access and CHIP Reauthorization Act (MACRA), which is designed to move providers into alternative payment models such as ACOs,” the association added.

The American Hospital Association (AHA) also criticized the proposed risk timeline.

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“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,” the hospital group told CMS.

While the House Committee on Ways and Means expressed a different viewpoint than the AHA and other industry groups on MSSP reform, the policymakers did agree with healthcare industry experts that the proposed changes to evaluation and management (E/M) payments under the 2019 Medicare Physician Fee Schedule should be abandoned.

CMS recently proposed the 2019 Medicare Physician Fee Schedule. Within the rule, the federal agency included E/M payment modifications to encourage paperwork simplification. For example, CMS proposed to collapse E/M Levels 2 through 5 into a single, blended payment rate and require providers only to document E/M Level 2 visits to qualify for the payment.

However, the House committee argued that the proposed payment change may be an oversimplification.

“Reducing the number of evaluation and management coding categories from five to two, which supports the spirit of burden reduction, may be an oversimplification that could result in unintended consequences,” the policymakers wrote. “We ask that you take a more deliberate approach working with stakeholders, and consider a policy with at least three coding categories, including considerations such as patient risk scores in addition to time spent, to ensure higher levels of accuracy while still reducing burdens.”

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The AHA agrees with the Representatives. The hospital group recently contended the federal agency was “confounding two separate issues” and the proposed E/M payment changes could negatively impact patient care.

“By reducing payments for many providers, the proposal to collapse the payment rates for E/M visits devalues providers’ time, increasing the already heavy pressure they face to maximize the number of patients they see each day,” the hospital wrote stated.

“Providers also may have to reduce the time they spend with patients if the additional time needed to fully treat more complex patients no longer earns payment commensurate with that time,” the association added. “This could incentivize providers to instead see patients multiple times for the same issues or divert them to higher cost settings such as emergency departments (EDs), increasing care fragmentation and undermining the transition to value-based care.”

The American Medical Group Association (AMGA), Aledade, and other industry groups also expressed concerns with the proposed E/M payment changes.

The House Committee on Ways and Means did applaud CMS for attempting to reduce the administrative burden on providers through the proposed 2019 Medicare Physician Fee Schedule rule. For instance, the policymakers commended CMS for adding service codes for remote telehealth patient access and removing the functional status reporting requirements for therapy.

“We continue to hear about issues such as physicians spending nearly two out of every three hours on additional paperwork; medical product makers finding it harder to serve Medicare patients; and medical equipment suppliers having trouble getting equipment to all the patients that need them,” the policymakers wrote. “These regulatory burdens and barriers do not reflect the intent of programs passed by Congress.”

The Congressmen urged CMS to continue calling on healthcare stakeholders to inform policy that benefits patients, providers, and payers.

“While there is undoubtedly a need for regulations to implement new policies, we firmly believe that such regulations must replace old ones, not continue to be layers upon one another,” they wrote. “A Washington-based top-down approach is harmful for the entire system from providers to patients, and as such we commend your commitment to including Requests for Information (RFIs) in each rule, particularly around the transparency in healthcare costs and efforts to combat the opioid crisis.”