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The Medicare Shared Savings Program could see big changes soon if the Centers for Medicare and Medicaid Services enacts a set of policies unveiled Thursday.
CMS proposes offering advanced shared savings payments to low-revenue accountable care organizations and allowing more flexibility for ACOs that take on performance-based risk. CMS also aims to adjust ACO benchmarks to fix glitches that make earning shared savings increasingly difficult for organizations over time.
The proposed changes could lead to $650 million in higher shared savings payments to ACOs, CMS projected.
These ACO policies are included in the draft physician fee schedule regulation for 2023. The proposed rule includes a pay decrease for doctors, relaxed supervision requirements for behavioral health practitioners and other provisions.
“The proposals in this rule will advance equity, lead to better care, support healthier populations and drive smarter spending of the Medicare dollar,” Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, said in a news release.
Physician organizations said the pay cut will hurt financial stability in the Medicare program and patient access to care.
The Medicare Shared Savings Program enables providers to form ACOs that promise higher-quality coordinated care for fee-for-service Medicare beneficiaries. Provider participation is voluntary and those that join can earn bonuses based on quality and cost metrics.
Growth in the program has plateaued in recent years and access to shared savings ACOs seems to be inequitable across racial and ethnic groups, according to a CMS fact sheet.
Based on a previously adopted Center for Medicare and Medicaid Innovation reimbursement model, CMS wants to incorporate advanced payments into the shared savings program.
Eligible ACOs could receive one-time payments of $250,000 and quarterly payments determined by a scale of enrollee neediness, for two years. The money would have to be used to improve provider infrastructure, to increase staffing or to care for underserved enrollees. ACOs would be required to publicly disclose the advanced payments they receive and spend.
Under the proposed rule, the agency would recoup payments once an ACO begins earning shared savings. Funds wouldn’t be clawed back if an ACO doesn’t achieve savings. CMS proposes accepting applications for advanced payments next year and would begin dispensing them in 2024.
The agency also proposes to adjust the ACO benchmarking system. ACOs can share in Medicare savings when spending is below an assigned benchmark level, which is based on costs in baseline years and on spending growth between baseline and performance years. Since benchmarks are reset based on past performance, ACOs that increase savings each year confront benchmarks that are increasingly harder to exceed.
This is known as “ratcheting,” and authorities including the Medicare Payment Advisory Commission have warned it puts long-term participation in ACOs at risk by reducing incentives for ACOs to save money.
CMS suggests incorporating a prospective, external factor into ACO benchmarks, along with a prior savings adjustment in historical benchmarks for returning organizations. CMS would also reduce the cap on negative regional adjustments of national per capita spending for Medicare Part A and Part B services for assignable beneficiaries from -5% to -1.5%.
“We believe these proposed modifications could serve as ‘stepping stones’ to a longer-term approach to the benchmarking methodology,” the fact sheet says. The fixes could coincide with an approach that incorporates administratively set benchmarks, about which CMS requests feedback.
CMS also wants to allow ACOs without experience in performance-based risk to participate in five-year agreements under a one-sided shared savings model, with the potential to spend two more years in one-sided risk. The proposal is a response to stakeholders concerned that smaller providers need more time to adapt to two-sided risk, according to the fact sheet.
CMS wants to allow some low-revenue ACOs in the basic program track that meet certain quality standards to share savings even if they don’t clear the minimum savings rate.
The agency also proposed improving the risk adjustment methodology for ACOs, implementing a health equity adjustment to an ACO’s quality performance score and several policies meant to reduce administrative burden for the organizations. ACOs would no longer need to submit marketing materials to CMS for review or annually notify beneficiaries of their ACO alignment. CMS also proposed loosening requirements for the Skilled Nursing Facility three-day rule waiver.
The National Association of ACOs cheered the policy proposals.
“NAACOS sends a big bravo to the Centers for Medicare and Medicaid Services (CMS) for taking steps to reach its goal of creating a stronger Medicare by strengthening accountable care models and speed the movement toward value for all patients,” CEO Clif Gaus said in a news release.
CMS proposes a physician fee schedule conversion factor of $33.08 for 2023, or $1.53 lower than the current policy. Under the regulation, Medicare would reimburse for a wider array of telehealth services, including certain types of mental healthcare.
The Medical Group Management Association said the pay cut, coupled with a 4% sequestration scheduled to take effect next year, will hurt physician practices.
“Having reviewed the proposed 2023 Medicare Physician Fee Schedule, MGMA is incredibly concerned about the likely impact of the proposed 4.42% reduction to the conversion factor, especially in light of the financial uncertainty which medical groups have faced over the past two years stemming from the COVID-19 pandemic, inflation, and the staffing crisis,” Anders Gilberg, MGMA senior vice president for government affairs, said in a statement.
The American Medical Association expressed similar concerns in a statement.
The draft regulation also would allow licensed professional counselors, marriage and family therapists, and other behavioral health professionals to practice under relaxed supervision requirements. In addition, CMS wants to pay clinical psychologists and licensed social workers to provide integrated behavioral healthcare as part of primary care teams.
The agency proposes delaying a 2022 policy on split evaluation and management visit payments for one year. Clinicians who provide split visits would continue to choose among four elements to determine the substantive portion of those visits.
The regulation is slated for publication in the Federal Register on July 29.
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