After much anticipation over the past few weeks, the Federal Register from Tuesday, June 9th contains the Final Rule proposing changes to the Medicare Shared Savings Program (MSSP) from the Centers for Medicare & Medicaid Services (CMS). The finalized changes to the MSSP provide additional flexibility and choice to Accountable Care Organizations (ACOs) currently participating in the program, but much uncertainty remains for future participants or those determining whether to continue their involvement in this initiative to control health care costs while improving quality for Medicare beneficiaries.

As expected, CMS established a “Track 3” model for MSSP ACOs with prospective beneficiary assignment that will not require ACOs that participated in the Track 1 one-sided risk model to transition to two-sided risk after the first three-year MSSP participation period. In contrast to the proposed rule, second-time Track 1 participants will have continued eligibility for 50 percent of the shared savings they earn during the subsequent MSSP agreement period. Other helpful changes that CMS finalized for ACOs participating in the MSSP include, but are not limited to:

  • clarifying key MSSP-related definitions in section 42 C.F.R. § 425.20;
  • revising the annual benchmark-setting methodology in 42 C.F.R. § 425.602 to equally weight each benchmark year and to account for shared savings in prior ACO agreement periods when resetting the historical benchmarks;
  • creating multiple Minimum Savings Rate (MSR)/Minimum Loss Rate (MLR) options for Track 2 (two-sided risk) ACOs beginning their MSSP agreement periods in January 2016; and
  • counting primary care services performed by Nurse Practitioners, Physician Assistants, and Clinical Nurse Specialists at the beginning of the beneficiary assignment process (without distinguishing whether such professionals are performing primary or specialty services).

But of equal importance are the items that CMS did not finalize from its proposed rulemaking. For example, CMS decided not to remove 42 C.F.R. § 425.106(c)(5) which allowed ACOs to deviate from the requirement that ACO participants must hold at least 75 control of an ACO’s governing body, even though it cautioned that it would only exempt ACOs from this requirement in “very limited circumstances.” In addition, CMS is not finalizing a proposal to add provisions under 42 C.F.R. § 425.112(b)(4)(ii)(E) to require ACOs to define and disclose “major milestones or performance targets” for each performance year because a majority of commenters found it to be overly burdensome. Also, CMS decided to seek additional comment on incorporating regional factors in establishing, updating and resetting benchmarks, and announced that it intends to propose revisions on this issue in a rule to be issued later this summer.

Some of the finalized changes do not take effect in the upcoming MSSP participation agreement period that begins in 2016. For instance, current MSSP ACOs will not need to modify their ACO provider/supplier participant agreements to comply with the strict requirements of modified 42 C.F.R. § 425.116 until the 2017 performance year, but new ACOs applying for MSSP participation and ACOs who seek to add participating providers must comply at the time they submit their materials to CMS. CMS is also delaying the implementation of the SNF 3-day rule waiver, which already is in place in the Pioneer ACO Model administered by the CMS Innovation Center, until the 2017 performance year.

Stay tuned for future posts and alerts providing a full analysis of the changes implemented in the Final Rule and how they may affect the ability of ACOs to achieve CMS’s goals in increasing quality, care coordination, and cost-effectiveness in the delivery of health care to Medicare beneficiaries.