On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued changes to the Medicare Shared Savings Program to advance CMS’ broader strategy of growth, alignment, and equity. To improve the overall operations of the Shared Savings Program, CMS is finalizing changes that, among other things, will impact payment and Accountable Care Organization (ACO) beneficiary assignment, update quality reporting and performance requirements, and reduce the administrative burden for ACOs.

I. Payment

In order to advance equity within the Shared Savings Program, CMS is finalizing regulations that provide upfront capital to allow health care providers treating rural and underserved populations to make investments in accountable care and that also allow for additional time under a one-sided shared savings model before transitioning to performance-based risk.

• Advance Investment Payments (AIPs). Beginning January 1, 2024, there will be a new option in the Shared Savings Program (the Program) under which eligible ACOs that are new to the Program will be able to receive a one-time fixed payment of $250,000 and quarterly payments for the first two years of the five-year agreement period. AIP eligibility is limited to new, low-revenue ACOs that are inexperienced with performance-based risk and have applied to participate in the Program under any level of the BASIC track’s glide path. To participate, AIP supplemental application information must be submitted as part of the application to participate in the Program, meeting the requirements of 42 C.F.R. § 425.630(d). Re-entering and renewing ACOs will not be eligible for the AIPs.

• AIPs have restricted uses and are only allowed to be used to improve the quality and efficiency of items and services furnished to beneficiaries by investing in increased staffing, health care infrastructure, and the provision of accountable care for underserved beneficiaries, which may include addressing social determinants of health. Quarterly payments will be capped at 10,000 assigned beneficiaries and will be determined using a risk-factors-based score. The AIPs will be recouped from shared savings the ACO has earned in the current agreement period, or in the next agreement period if a balance remains. ACOs will need to make publicly available on their websites the amount of AIPs received and the amount spent in each spend plan category.

• Performance-Based Risk Changes. CMS noted that it does not want to force ACOs to take on two-sided risk before they are ready. Therefore, for agreement periods beginning January 1, 2024 and subsequently, CMS will allow inexperienced ACOs to participate in one five-year agreement under a one-sided shared savings model as a transition to two-sided risk. This requires inexperienced ACOs to enter the BASIC track’s glide path and remain in Level A for all five years, with possible eligibility for two additional years under a second agreement period for a total of seven years under a one-sided model before transition. Furthermore, because new participation changes are occurring during an agreement period for currently participating ACOs, those already participating in Level A or Level B of the BASIC track may elect to remain at their current level for the remainder of their agreement.

• For agreement periods beginning on January 1, 2024, and subsequently, CMS will also remove the limitation on the number of agreement periods an ACO can participate in Level E of the BASIC track, essentially making participation in the ENHANCED track optional. This includes ACOs currently participating in the ENHANCED track, which are permitted to enter a new agreement under Level E. This decreases the chance that experienced ACOs will terminate participation to avoid higher levels of risk. This will be finalized under 42 C.F.R. § 425.600(g).

II. ACO Beneficiary Assignment

Beginning January 1, 2023, CMS is expanding the definition of “primary care services” used for beneficiary assignment in the Shared Savings Program, to include Current Procedural Terminology (CPT) codes for:

• Prolonged nursing facility services and prolonged home or residence services performed by physicians or NPPs, and

• Chronic Pain Management services performed by physicians or other qualified health care professionals.

III. Quality Performance and Reporting

According to CMS, the following changes are intended to strengthen Shared Savings Program participation by reducing the effect of ACO performance on historical benchmarks, addressing market penetration, and strengthening incentives for ACOs serving medically complex and high- cost-of-care populations.These changes will apply to establishing, updating, and adjusting the benchmark for agreement periods beginning on January 1, 2024, and in subsequent years.

• Growth Factor. CMS is incorporating a prospectively projected administrative growth factor, referred to as the Accountable Care Prospective Trend (ACPT), into a three-way blend with national and regional growth rates to update an ACO’s historical benchmark for each performance year in the ACO’s agreement period. CMS will set the ACPT growth factors for the ACO’s entire five-year agreement period near the start of the agreement period and these ACPT factors will remain unchanged throughout the ACO’s agreement period.

• ACO Benchmarks. CMS is incorporating an adjustment of an ACO’s benchmark based on the higher of either the prior savings adjustment or the ACO’s positive regional adjustment. This will apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs that were reconciled for one or more performance years in the three years preceding the start of their agreement period. The adjustment is aimed at returning to an ACO’s benchmark an amount that reflects its success in lowering growth in expenditures and is also intended to ensure that high performing ACOs have incentives to remain in the program for the long-term.

• Negative Regional Adjustment. In an effort to limit the impact of negative regional adjustments on ACO historical benchmarks, CMS is reducing the cap on negative regional adjustments from negative 5 percent of national per capita expenditures for Parts A and B services under the original Medicare Fee-for-Service program in base year 3 for assignable beneficiaries to negative 1.5 percent. Additionally, after the cap is applied to the regional adjustment, CMS will gradually decrease the negative regional adjustment amount as an ACO’s proportion of dually-eligible Medicare and Medicaid beneficiaries increases or its weighted-average prospective hierarchical condition categories risk score increases.

• County FFS Expenditures. CMS is finalizing its proposal to calculate risk-adjusted regional expenditures using county-level values computed using an assignment window that is consistent with an ACO’s assignment methodology selection for the applicable performance year. CMS expects this change to bring greater precision to the calculation of factors based on regional Fee-for-Service expenditures.

• Risk Adjustment Methodology. Under the current approach for calculating risk adjustments for ACOs, a 3 percent cap is applied separately for the population of beneficiaries in each Medicare enrollment type. CMS is finalizing the proposal to instead allow the 3 percent cap to be applied in the aggregate across the four Medicare enrollment types.

• Opportunities for Low Revenue ACOs. Finally, CMS is expanding the eligibility criteria to qualify for shared savings for agreement periods beginning on January 1, 2024, and in subsequent years. This change allows certain low revenue ACOs participating in the BASIC track to share in savings even if the ACO does not meet the minimum savings rate requirement. Eligible ACOs that meet the quality performance standard required to share in savings at the maximum sharing rate will receive half of the maximum sharing rate for their level of participation. ACOs that do not meet the quality performance standard required to share in savings at the maximum sharing rate but do meet the alternative quality performance standard being established with this final rule, will have a sharing rate that will be further adjusted according to the finalized sliding scale approach for determining shared savings.

The following set of changes focus on transitioning ACOs to all payer quality measure reporting and adjusting for health equity.

• Determining Shared Savings/Losses. Starting on January 1, 2023, CMS is changing the all-or nothing approach to determining an ACO’s eligibility for shared savings based on quality performance. Under the new approach, CMS will allow scaling of shared savings rates for ACO’s that fall below the 30th/40th percentile quality standard threshold required to share in savings at the maximum sharing rate.  These ACOs must also meet certain minimum quality and reporting performance requirements. Under the final rule, an ACO’s quality score for a performance year and the determination of whether the ACO met the Shared Savings Program quality performance standard will affect the determination of shared savings for that performance year.

• Reporting Quality Measures. CMS is extending the incentive for reporting electronic clinical quality measures (eQCMs) and Merit-Based Incentive Payment System (MIPS) Clinical Quality Measures (CQMS) through performance year 2024 to align with the end of the CMS Web Interface reporting option.  This gives ACOs an extra year to gauge their performance on the eCQM/MIPS CQMs before there is a requirement to fully report these measures in performance year 2025.

• Health Equity Adjustment. Furthermore, CMS is finalizing a proposal to implement a health equity adjustment of up to 10 bonus points to an ACO’s MIPS quality performance category score when reporting all-payer eCQMs/MIPS CQMs based on high quality measure performance and providing care for a higher proportion of underserved or dually-eligible beneficiaries.  CMS notes that this policy will only positively impact ACOs and will not penalize them.

• CMS Discretion to Correct Errors. In the final rule CMS also clarifies that if CMS learns of errors in the MIPS quality performance category score identified through the MIPS targeted review process, CMS would exercise discretion to re-open an ACO’s initial determination to correct the errors. CMS states that for good cause CMS would “correct errors in the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO due to the miscalculation of MIPS quality performance category scores.”

• Unweighted Scores. CMS has clarified that CMS uses and will continue to use the unweighted distribution of scores to determine the 30th percentile and 40th percentile MIPS quality performance category scores for purposes of establishing the applicable quality performance standard under the Shared Savings Program.

• Benchmarking Policies. CMS is amending the regulation at § 425.512, which governs the ACO quality performance standard for performance years beginning on or after January 1, 2021, to include a new paragraph (a)(6).  This new paragraph will provide that for performance years 2022, 2023, and 2024, CMS designates a performance benchmark and minimum attainment level for each CMS Web Interface measure and establishes a point scale for the measure as described in § 425.502(b). CMS is also finalizing the proposal to use the approach to set flat percentage benchmarks for “the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) measure and the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) measure” for performance year 2022.

IV. Reducing Administrative Burdens for ACOs

The following changes are intended to reduce ACO administrative burdens in order to improve MSSP operations, and go into effect beginning January 1, 2023.

• Marketing Materials. ACOs will no longer be required to submit marketing materials to CMS for review and approval prior to use, but CMS will maintain its ability to review marketing materials upon request and issue a compliance action if necessary. Failure to comply with marketing requirements will subject the ACO to penalties and/or termination.  This will be codified at 42 C.F.R. § 425.310.

• SNF 3-day Rule Waiver Application. To streamline the Skilled Nursing Facility (SNF) 3-day rule waiver application review process, ACOs will no longer be required to provide narratives describing their communication, care management, and beneficiary evaluation and admission plans describing how the ACO plans to implement the waiver when applying for the SNF 3-day rule waiver. Instead, ACOs will be required to attest that they have such plans and make available such plans upon request. As a reminder, the SNF benefit applies to beneficiaries who require a short-term intensive stay in a skilled nursing home, rehabilitation facility, or both. These changes will be codified at 42 C.F.R. § 425.612(a)(1)(i)(A).

• Data Sharing. CMS is updating data sharing regulations to reduce the administrative burden for ACOs that organize as Organized Health Care Arrangements (OHCAs) to allow for more seamless exchange of patient information across the ACO. Therefore, ACOs organized as OHCAs may request aggregate reports and beneficiary-identifiable claims data from CMS. These changes will be codified at 42 C.F.R. §§ 425.702(c)(2) and 425.704(b).

V. Signage and Beneficiary Notifications

In an attempt to increase beneficiary comprehension and program transparency, CMS has clarified requirements for signage and beneficiary notifications, codified at 42 C.F.R. § 425.312.  These include, among other requirements:

• Signage. ACO participants must post signs at all facilities notifying beneficiaries of their participation in an ACO and their ability to decline claims data sharing and voluntarily align to their primary clinicians.

• Notices. ACOs must make a standardized written notice available upon request in all settings in which beneficiaries receive primary care services. Beneficiaries must be provided with a standardized notice prior to or at the first primary care service visit of the agreement period. A separate, follow-up communication must take place within 180 days.

*This post was co-authored by Paul Sevigny, law clerk at Robinson+Cole. Paul is not yet admitted to practice law.