On December 21, 2018, the Centers for Medicare & Medicaid Services (CMS) announced “Pathways to Success”, an overhaul of Medicare’s Accountable Care Organization (ACO) Program and issued a final rule that overhauls major features of the Medicare Shared Savings Program (MSSP).
The majority of Medicare ACOs (561 of the 649 active in 2018) are part of the MSSP, which was created by the Affordable Care Act and launched in 2012. Currently, MSSPs serve about 10.5 million beneficiaries across three tracks. The “Pathways to Success” overhaul redefines available participation options and encourages ACOs to transition more quickly to two-sided risk models – i.e., models allowing providers to share in cost savings while also holding them accountable for repaying losses.
Under the new rule, “low-revenue” or physician-led ACOs will have three years to transition to two-sided risk, while all other new ACOs will have two years and existing one-sided risk ACOs will have one year. The rule would also modify cost benchmark and risk adjustment methodologies and extend ACOs participation terms from three to five years.
In connection with the program redesign, CMS is offering an application cycle for a one-time new agreement period start date of July 1, 2019. New and existing ACOs interested in applying to the new BASIC or ENHANCED track must complete the non-binding Notice of Intent to Apply (NOIA) before January 18, 2019. CMS will resume the usual annual application cycle for agreement periods starting on January 1, 2020, and in subsequent years.
NextGen Analysis: This rule eliminates lingering uncertainty regarding the future for the Medicare ACO program and finalizes CMS’s overhaul of the program as proposed in August 2018. Most critically, the rule will force ACOs to accept risk or leave the program more quickly. Cost benchmark and patient engagement reforms will likely increase long-term success for ACOs in the program.
For more information, see CMS press release and final rule.