The Centers for Medicare and Medicaid Services (CMS) issued the anticipated final rule on the future pay-and-penalty structure for accountable care organizations (ACOs) managing to peeve just about everyone and raise the question of whether any health care entities will be willing participate in the future (see “CMS Puts the Squeeze on ACOs,” Orthopedics This Week, September 19, 2018).
The change: until now, there was a benefits-only tier (Track 1) to the Medicare Shared Savings Program (MSSP) under which a health care entity could receive a small financial bonus for meeting Medicare spending and outcome milestones, with no financial punishment if it did not.
A health care provider organization could sign up for this benefit for up to two consecutive three-year terms. The organization could then decide whether it wanted to enter either of two tiers under which benefits are greater for savings but failing to meet federal performance standards would result in a reimbursement penalty.
Under the new system, to start January 1, 2019*, participants must sign contracts of at least five years’ duration for either of two new tiers, BASIC and ENHANCED. The BASIC tier replaces the old benefits-only/no-risk Track 1. The new ENHANCED track is basically the old Tier 3, with the highest level of risk and rewards.
*Those whose multi-year contracts would expire at the end of December 2018 were given a six-month extension in the new rule, so their new contracts, if they continue, will start July 1, 2019.
Who wants the risk?
Of the 561 ACOs with MSSP contracts as of this past August 460 were in Track 1, which offers benefits only. Of these 460, 82 were nearing the end of their second three-year term as savings-only ACOs. Another 88 Medicare ACOs are not in the MSSP program.
CMS said it was “encouraged” that 90% of ACOs in the MSSP program have chosen the six-month extension—as if that were an indication that they’re going to hop onto the risk bandwagon after those six months. However, given the fact that a high majority of ACOs receive the benefit of shared savings payments without the risk side under their current contracts, the question is why the other 10% did not extend for six months.
Under the new BASIC tier, a small, newly participating ACO led by a physician can elect to spend up to three years in “one-sided” (benefits only) status.
A new larger MSSP participant (such as a hospital) would get only two years of one-sided participation. Any organization already in MSSP would be allowed to stay just one more year in the benefits-only side of the BASIC model.
Then, all who sign BASIC contracts would be forced into “two-sided” (benefits and risk for penalties) status for the remainder of their contracts, which must be for at least five years, compared to the previous minimum of three.
