Next Generation ACOs: CMS Increases Risks, Rewards

ACO payment models and the path to accountability.

Last December, the Chronic Care Working Group (CCWG), a bipartisan collaboration of Senate Finance Committee members chaired by Senators Isakson (R-GA) and Warner (D-VA), released its policy options document.1 The CCWG had a formidable charge—to “analyze current law, discuss alternative policy options, and develop bipartisan legislative solutions” that increased care coordination across settings, streamlined Medicare payment while aligning incentives, facilitated high-quality care, produced better outcomes, and reduced growth in Medicare spending. The requirement that proposals be budget neutral or cost saving narrowed the choices. After reviewing more than 530 comments, the CCWG met with 80 stakeholder groups, ultimately recommending 24 options, including two that focused on improving the infrastructure of chronic care with better quality measures and more-accurate measures of cost for payment and computing shared savings. Of the proposals, 16 were for enhanced chronic care, with 11 focused on capitated payments (e.g., Medicare Advantage (MA)) or shared savings (accountable care organizations (ACOs), Independence at Home (IAH)) (Table 1). Despite government efforts to promote systems of care that feature cost containment strategies such as capitation (MA) or shared savings (ACOs), more than half of the 49 million Medicare beneficiaries continue to receive care from fee-for-service (Medicare A and B) providers, without spending constraints. Proposals to enhance care within traditional fee-for-service (FFS) Medicare were limited to new billing codes for high-intensity chronic care management, counseling regarding prognosis of serious illnesses, and limiting constraints on telemedicine for specific patient groups. There is wide recognition that Medicare spending is concentrated in beneficiaries with advanced chronic illness.2 Nearly half of FFS spending is for 5% of beneficiaries, the 1.7 million with annual spending exceeding $54,000 per person, compared with $9,900 for the average Medicare beneficiary. Recognizing where spending is concentrated is necessary but is only the first step toward creating targeted policy to advance high-quality care and reduce costs. Of the 34 demonstrations that CMS formally evaluated over the past 15 years,3 only two were substantially successful in reducing costs and increasing quality.4, 5 The main lessons from these demonstrations are not surprising. There is value in targeting high-cost beneficiaries and developing trusting human relationships where engaged patients and providers work toward common goals; there is significantly less cost savings and quality improvement in efforts where providers work by themselves, focus work on telephonic management, are disconnected from primary care, or focus merely on technology-assisted data acquisition and algorithm-driven care plans.4 Two notably successful FFS programs—Health Quality Partners and Massachusetts General Hospital (MGH)—relied on administrative fees to pay for provider time and additional personnel needed for managing complex patients. Both programs relied on engagement between care managers, patients, and providers; the MGH model embedded care managers in primary care practices. In contrast, patient-centered medical homes, despite a similar conceptual design, have had an uneven record in controlling costs, in part because of a less-targeted focus.6, 7 Several of CCWG's proposals favor expanding MA plan options and converting special needs plans (SNPs) to permanent status. These managed care organizations receive risk-adjusted capitation for each beneficiary, providing a strong incentive to actively manage their chronically ill members. A few provider–insurer organizations have proven effective at managing some of Medicare's frailest beneficiaries under capitation. Programs of All-inclusive Care for the Elderly (PACE), which typically operates small programs for 100 to 1,200 enrollees, now covering 34,000 frail elderly adults eligible for nursing facility care, and the Commonwealth Care Alliance dually eligible managed care organization (MCO) in Massachusetts are strong examples of effective care under a capitation model.8, 9 Although these organizations receive a risk-adjusted, capitated payment, the important feature is that providers and patients develop and manage the care plan in small groups. Another approach that has shown promise for these populations are Medicare shared savings programs (MSSPs), such as ACOs, which are also strongly incentivized, with rewards contingent on improving upon a risk-adjusted baseline cost target for assigned beneficiaries. CMS' evaluation of ACOs suggested that they saved $424 per beneficiary in their first year and $257 per beneficiary over 2 years.10 Several CCWG recommendations seek to make ACOs and other shared savings plans more accountable (e.g., by allowing prospective attribution by patients) and more flexible (e.g., broadening options to include nonmedical support services and relieving restrictions, such as the homebound status requirement for home health care.) The CCWG logic is clear—with a budget constraint, fewer of the rules to control overuse observed under FFS payment are needed, rules which may have perverse effects on outcomes and costs. Topping the CCWG's list of options is Independence at Home (IAH), a 3-year demonstration (2012–15) that Congress unanimously extended for 2 years in June 2015.11 The favorable initial published results are consistent with those of the successful Department of Veterans Affairs national Home Based Primary Care (HBPC) program12 and other published HBPC models.13-15 IAH rests on three precepts: focus on the most frail, immobile, and costly beneficiaries; use mobile interdisciplinary provider teams led by physicians and nurse practitioners responsible for their care and accountable across the health spectrum; and align incentives. IAH's novel approach to “shared savings with discipline” uses eligibility criteria identifiable in CMS administrative data,1 so that the savings baseline can be accurately calibrated. It allocates the first 5% of savings to CMS, after which there is an opportunity for shared savings, and IAH disqualifies practices that fail to achieve savings or to meet three of six quality metrics after 2 years. CMS found that IAH practices saved more than $25 million during the first performance year—an average of $3,070 per beneficiary—while delivering high-quality care. With 8,400 frail elderly adults enrolled, Year 1 savings were 7.7%, with nine of 17 (53%) practices achieving the 5% savings threshold (range $2,676–13,068/patient-year). For those nine practices, the average savings rate was 17%, with the top-performing practice reducing costs by 32%. Successful practices were broadly representative, coming from medium and large academic centers, and private for-profit and nonprofit corporate and community practices. Although IAH programs managed fewer than 1% of the number of individuals in the original 32 ACOs (Pioneer ACOs), IAH generated nearly 9% of the combined first year CMS savings of Pioneer ACOs and IAH.10 Unlike the two-sided risk in the Pioneer ACO model, in IAH, discipline comes from being disqualified and thus unable to share in substantial achievable savings. Using the 2012 Medicare 5% beneficiary file, it was estimated that 2.2 million Medicare beneficiaries meet IAH criteria,1 6.2% of all FFS beneficiaries, with 40% of the 5% most-expensive beneficiaries in 2012. Of all Medicare FFS beneficiaries, these individuals represented 23% of the deaths, 43% of Medicare readmissions, 37% of new long-term institutional stays, and 28% of FFS spending, validating the targeting criteria. Over the next decade, if home-based primary care through IAH reached only 35% of this population, maintaining the first year demonstration experience, it is likely that it would generate savings exceeding $35 billion, with CMS retaining more than $17 billion,16 which is within 3% of the estimated savings from applying VA's HBPC experience to 35% of the IAH-eligible Medicare population. The congruence of effectiveness between VA's national program and the CMS demonstration gives support to the estimate. Two of the CCWG's recommendations are crucial for cost containment in FFS Medicare, applicable to ACOs and IAH: developing more-accurate risk adjustment models for the highest-cost beneficiaries and developing appropriate quality metrics, with a focus on patient experience. The current system of risk assessment for ACOs relies on hierarchical condition categories (HCCs) to develop cost benchmarks.17 Analyses of beneficiaries similar to those qualified for IAH18 have confirmed other reports19 that current HCC models, calibrated on the entire Medicare population, substantially underpredict costs for a selected population, with mortality four times as great, costs five times as high, and more than half of beneficiaries joining a practice being clinically unstable at enrollment. HCC predicted costs also have wide geographic variation whereas frail beneficiaries are more similar cost-wise between low- and high-cost counties. In PACE, a combination of PACE rates, the PACE HCC model, and PACE frailty adjusters have effectively addressed these phenomena.8, 14 Similar recalibration of the HCC model to account for mortality risk, frailty, and local variability among individuals meeting IAH qualifying criteria is needed while incorporating a time-dependent clinical instability factor.18 Quality metrics offer a balancing force for shared savings incentives. In contrast to the large suite of measures for ACOs, the IAH demonstration used six quality measures to moderate savings shares: soliciting patient preferences; improving care transitions through home visits within 48 hours; including medication reconciliation after a hospitalization or emergency department visit; and validated, care-sensitive usage metrics (30-day readmissions, ambulatory care–sensitive hospitalizations, and emergency department visits). The National Home-Based Primary and Palliative Care Network is field testing additional metrics, particularly ones focused on patient and caregiver experiences.20 Effective, efficient chronic illness management requires making decisions about goals and value. The potential for shared savings to provide the needed constraint in FFS Medicare should foster the transition from volume to value while keeping the provider–patient relationship at the center, giving people care that they want and need. The CCWG's lead option, converting IAH to a Medicare benefit, will advance that transition, achieving the CCWG's goals of coordinating care across sites, aligning incentives, and improving outcomes while lowering costs. Conflict of Interest: The editor in chief has reviewed the conflict of interest checklist provided by the authors and has determined that the authors have no financial or any other kind of personal conflicts with this paper. Drs. Kinosian, Taler, and Boling are participants in the IAH Demonstration, as are the other 14 members of the IAH Learning Collaborative Writing Group. Drs. Kinosian, Taler, and Boling have provided testimony to CMS and the Senate Finance Committee's Chronic Care Working Group, as well as MedPAC, on the Independence at Home demonstration. Dr. Kinosian is a board member of the American Academy of Home Care Medicine; Drs. Taler and Boling are past board members. Author Contributions: Kinosian: design, analysis, manuscript preparation. Boling, Taler: design, manuscript preparation. Sponsor's Role: NA.

In 2012, the Centers for Medicare and Medicaid Services (CMS) initiated the Medicare Shared Savings Program (MSSP) and Pioneer Accountable Care Organization (ACO) programs. Organizations in the MSSP model shared cost savings they generated with CMS, and those in the Pioneer program shared both savings and losses. It is largely unknown what hospital and environmental characteristics are associated with the development of CMS ACOs with one- or two-sided risk models. The aim of this study was to assess the organizational and environmental characteristics associated with hospital participation in the MSSP and Pioneer ACOs. Hospitals participating in CMS ACO programs were identified using primary and secondary data. The ACO hospital sample was linked with the American Hospital Association, Health Information and Management System Society, and other data sets. Multinomial probit models were estimated that distinguished organizational and environmental factors associated with hospital participation in the MSSP and Pioneer ACOs. Hospital participation in both CMS ACO programs was associated with prior experience with risk-based payments and care management programs, advanced health information technology, and location in higher-income and more competitive areas. Whereas various health system types were associated with hospital participation in the MSSP, centralized health systems, higher numbers of physicians in tightly integrated physician-organizational arrangements, and location in areas with greater supply of primary care physicians were associated with Pioneer ACOs. Favorable hospital characteristics were, in the aggregate, more important than favorable environmental factors for MSSP participation. MSSP ACOs may look for broader organizational capabilities from participating hospitals that may be reflective of a wide range of providers participating in diverse markets. Pioneer ACOs may rely on specific hospital and environmental characteristics to achieve quality and spending targets set for two-sided contracts. Hospital and ACO leaders can use our results to identify hospitals with certain characteristics favorable to their participation in either one- or two-sided ACOs.

APhA advances provider status initiative

More than 70% of Medicare beneficiaries in Puerto Rico are enrolled in a Medicare Advantage (MA) plan. Evidence of MA plan payments and quality in Puerto Rico compared with the 50 US states and Washington, DC (hereafter referred to as US mainland), is lacking, notably after implementation of the Patient Protection and Affordable Care Act (ACA). To compare MA plan payments and quality in Puerto Rico with those in the US mainland and to evaluate how differences between MA plans in Puerto Rico and the US mainland changed after ACA implementation. This cohort study used publicly available data on MA plans from January 1, 2006, to December 31, 2019, from the Centers for Medicare & Medicaid Services. Data analysis was performed from October 2019 to February 2022. Medicare Advantage plans in Puerto Rico and implementation of the ACA. Primary outcomes were risk-standardized federal benchmark payments (the amount offered by the federal government for insuring a beneficiary of average risk), risk-standardized plan bids (a plan's asking price for a beneficiary of average risk), and rebates received by plans. Additional outcomes included risk-adjusted benchmarks, risk-adjusted bids, actual plan payment, and aggregate plan quality ratings (star ratings). A difference-in-differences analysis examined differential changes in plan payments in Puerto Rico vs the US mainland after ACA implementation. Before ACA implementation, 211 MA plans in Puerto Rico and 13 899 plans in the US mainland were included. After ACA implementation, 433 MA plans in Puerto Rico and 29 515 plans in the US mainland were included. Before ACA implementation, risk-standardized benchmarks were 33% lower for MA plans in Puerto Rico than plans in the US mainland ($556.73 [95% CI, $551.82-$561.64] vs $831.15 [95% CI, $828.55-$833.75] per beneficiary per month [PBPM]). This gap increased to 38% after ACA implementation ($540.58 [95% CI, $536.86-$544.32] vs $869.31 [95% CI, $868.21-$870.42] PBPM). Risk-standardized plan bids in Puerto Rico were 46% lower before ACA implementation and 43% lower after ACA implementation compared with those in the US mainland. Rebates in Puerto Rico decreased from $168.50 (95% CI, $163.57-$173.42) PBPM before ACA implementation to $93.39 (95% CI, $89.51-$97.27) PBPM after ACA implementation, a decrease of $75.11 PMPM compared with a decrease of $2.05 PMPM in the US mainland. Plans in Puerto Rico received increased quality bonus payments, and the mean (SD) risk score for plans in Puerto Rico increased to 1.55 (0.31) after ACA implementation, which increased risk-adjusted benchmarks and actual plan payments, offsetting the widening payment disparity. This cohort study found that after implementation of the ACA, federal benchmark payment amounts decreased in Puerto Rico compared with the US mainland. Responses by MA plans in Puerto Rico, including increased quality bonus payments and risk scores, offset this payment reduction, although actual plan payments in Puerto Rico were lower than those in the US mainland.

A 2016 survey from Deloitte found that half of physicians were unaware of important changes to the Medicare reimbursement policy that were set to begin on January 1, 2017, and thus questioned the readiness of hundreds of thousands of physicians expected to participate and meet certain performance criteria.1 For pathology, the Medicare reforms could have a $2 billion impact on the specialty during the next several years. All physicians will ease into the new requirements. For instance, with quality measures developed by the College of American Pathologists (CAP), pathologists can prevent a 2019 Medicare financial penalty by reporting on 1 quality measure in 2017. In future years, Medicare will require greater reporting and performance activity from all physicians and group practices in order to avoid decreases in reimbursement.With the expansion of health care fringe benefits during World War II, the advent of Medicare in 1965 under Title XVIII of the Social Security Act, and subsequent health care coverage programs under the control of the Centers of Medicare & Medicaid Services (CMS), the United States has seen a steep rise in health care expenditures. Currently, the CMS provides health care coverage for roughly 105 million beneficiaries at a cost of more than $1.1 trillion annually.2,3 In an effort to hold health care providers accountable for a portion of this increased cost, Congress created the Sustainable Growth Rate (SGR) formula in the Balanced Budget Act of 1997.4 Simplistically, the SGR was an adjustment factor applied to physician fee schedule (PFS) payments that was designed to ensure that the yearly expense per Medicare beneficiary did not exceed the growth in the Gross Domestic Product. However, implementation of this SGR-related PFS update was repeatedly delayed by Congress over the years (the "doc fix"), which eventually led to a potential 27.5–percentage point negative adjustment in PFS payment rates if an alternative to the SGR was not identified. These "doc fixes" also were a factor in the creation of quality pay for performance programs, the first being the Physician Quality Reporting System (PQRS). The PQRS, initially known as the Physician Quality Reporting Initiative, was created within the Tax Relief and Health Care Act of 2006 and made permanent within the Medicare Improvements for Patients and Providers Act of 2008.5,6 Subsequently, the Patient Protection and Affordable Care Act of 2010, commonly referred to as "Obamacare," established the Value-Based Payment Modifier (VBPM) program and the concept of Accountable Care Organizations (ACOs) through the Medicare Shared Savings Programs (MSSPs).7All of these programs had the intent of establishing accountability on the part of the health care provider for the quality and cost of care by linking these to payment. However, despite having these payment adjustment programs in place, the constant threat of a large SGR payment cut remained and made financial planning difficult for physician practices. Congress responded to this concern by passing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).8 This legislation was game-changing in that it terminated the never functionally implemented SGR formula, establishing a new framework for rewarding health care providers for better care, not merely more care, and made participation mandatory for all CMS-eligible clinicians (ECs) who wanted to avoid a negative adjustment to their Medicare Part B payments. Under MACRA, the last payment adjustment year related to the PQRS, VBPM, and Electronic Health Record Incentive program (Meaningful Use) will be in 2018, based on January 1, 2016, to December 31, 2016, reporting. In essence, this legislation has bundled all of the prior physician quality reporting programs into one, which the CMS has designated as its Quality Payment Program (QPP). More than 600 000 clinicians will now be reimbursed under the QPP. Initial reporting of metrics for this new program began January 1, 2017, and will close December 31, 2017, with payment adjustments related to this performance period starting in 2019.Within the QPP, there are 2 payment pathways—the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Model (APM). An EC during the first 2 years is defined by law as any physician, physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, or any group that includes such professionals and bills CMS for those professional services. In future years, CMS has indicated it anticipates expanding this EC definition. Pathologists at independent laboratories are also considered ECs. This latter point is an important change from the previous quality reporting programs from which they had been excluded, because they were considered Medicare suppliers. Here, we will further describe the details of these 2 payment pathways, based on the CMS's final rule (81 FR 77008), and what you and/or your practice need to do to avoid a potential penalty in 2019.9According to CMS calculations, most ECs will fall into the MIPS pathway. The ECs can be excluded from MIPS by participating in a qualified APM, by not exceeding the low-volume threshold of seeing fewer than 100 Medicare patients or billing CMS less than $30 000 in a year in part B payments on the physician fee schedule, or by being a first-time enrollee in CMS. Based on an EC's or a group's performance within 4 categories, an overall composite performance score (CPS) will be calculated. This CPS is what will be used to compare the EC or the group to the rest of those within the MIPS and determine the potential bonus or penalty they will receive. The potential impact on CMS payments in 2019 from MIPS performance in 2017 is ±4%: this increases to ±5% in 2020, ±7% in 2021, and then ±9% in 2022 and beyond. The performance adjustments are budget neutral, such that the total amount of penalties and bonuses will equal zero.The 4 categories within MIPS are—Quality, Clinical Practice Improvement Activities (CPIAs), Advancing Care Information (ACI), and Resource Use. The requirements within each category can change depending on whether or not an EC is considered "patient facing" or "non–patient facing." This distinction is critical because performance requirements can differ between the 2 groups. According to the 2016 final rule, a non–patient facing EC must bill 100 or fewer patient-facing encounters in a calendar year. For those in a group, 75% of the ECs must fall within the above definition in order for the group to be considered non–patient facing. According to CMS, ECs and groups will be notified of their classification at the start of each performance year. A final list of what qualifies as a patient-facing encounter is available at the CMS Web site (Quality Measure Encounter Codes; accessed January 24, 2017), but the ones most likely to affect pathologists include apheresis, bone marrow biopsy procedure, and evaluation and management CPT codes. Based on a preliminary analysis by CMS, most pathologists will be classified as non–patient facing.In order to ease transition into the new program, CMS has made several options available for reporting in 2017. In order to avoid a penalty in 2019, an EC or group simply must report something within one of the performance categories—for example, one quality measure, regardless of the number of cases—or attest to one CPIA, such as providing timely communication of test results. By simply reporting on one measure or activity, the EC and/or group will avoid the 4% downward payment adjustment in 2019. Other potential participation options include a partial year of reporting—meaning at least 90 days' worth of patient data—or a full year of reporting. Those that chose 1 of these 2 latter options would be eligible for a partial or a full bonus, respectively. The CMS has acknowledged that most small practices would be at a disadvantage and would likely have received a penalty in 2019 without these transition year rules.Within the Quality performance category, an EC or group must report on 6 applicable measures, or all that apply to them if they do not qualify for reporting 6 measures. Depending on the reporting mechanism, the reported data must be on at least 50% of their Medicare patients if done via claims reporting, or 50% of all their patients (regardless of payer) if using another reporting mechanism. For 2017, the CMS has maintained all 8 current CAP–developed quality measures (Table 1). There are other measures available that may apply to a limited number of pathologists and are only reported via a registry. If an EC is unsure if he or she qualifies for additional measures, the EC may contact CMS at the Quality Payment Program Service Center at 1-866-288-8292 or use the online measure tool on the CMS Web site (https://qpp.cms.gov/measures/quality; accessed January 4, 2017). Each applicable measure will receive a score ranging from 0 to 10 points depending on the EC's performance compared with others who reported on the same measure. If 6 measures were applicable to the EC, then a total of 60 points would therefore be available in this performance category. The CMS has classified the 2 lung cancer and the melanoma pathology reporting measures as "high-value" and outcome measures. There are potential bonus points available for reporting on the high-value measures.Of all of these performance categories, only the CPIA category represents a new pay-for-performance concept for CMS, where an EC is rewarded for activities such as care coordination, patient engagement, and safety. Within the final rule, there are 6 subcategories with a total of 92 medium- or high-weighted activities that could count toward obtaining the 40 points available in this performance category. As a non–patient facing EC, the EC or his or her group would need to attest to performing 2 medium-weighted or 1 high-weighted CPIA for a minimum of 90 days. In contrast, patient-facing ECs need to report 4 medium-weighted or 2 high-weighted CPIAs for full credit in this category. Some potential activities that pathologists may participate in are listed in Table 2. Reporting will be done via attestation, and future guidance is expected from the CMS regarding this process. Of importance is that those who report individually via claims will also have to attest individually for CPIA. This is in contrast to those reporting as a group, in which they would attest on 1 to 2 items as a group.The ACI performance category is, in essence, the Electronic Health Record Incentive Program (Meaningful Use). Historically, pathologists have been given an exemption from this program because the interoperability and information exchange measures within the program were not applicable to laboratory information systems (LISs). At least at the start of MIPS, it appears this exemption will continue, because non–patient facing clinicians will not be scored in this category. The CMS will reweight this category to zero for non–patient facing clinicians, and will reallocate the percentage value in this category to the Quality performance category in determining the CPS.Similarly, the Resource Use performance category will not be scored in 2017. Therefore, this category will be reweighted to zero for all ECs, with its percentage of the CPS also being reallocated to the Quality performance category. In the future, this performance category will be similar to the VBPM program but focused solely on claims-based cost calculation. The CMS will base the resource use score on the patients attributed to an EC. At least initially, it is anticipated that pathologists will not be eligible for patient attribution, and therefore would be ineligible for participation in this category.As previously mentioned, an overall CPS will be calculated based on the performance within each evaluable category and will range from 0 to 100. In 2019, those with a CPS higher than 70 will be eligible for a high-performance bonus. The initial proposed weighting of each category will be 60% of the CPS based on the Quality performance score, 15% based on the CPIA score, and 25% based on the ACI performance score. Resource use for the 2017 reporting year will be 0%. However, for non–patient facing ECs, the ACI category will not apply. Therefore, for most pathologists the CPS will be based solely on Quality (85%) and CPIA (15%).As a case example, a non–patient facing EC has 4 quality measures that apply to him or her, equating to 40 possible points within the Quality performance category. The EC reports on the 2 lung measures, the Barrett esophagus measure, and the colorectal cancer measure, and he or she receives a score of 36 out of 40 points. Plus, the EC receives 2 bonus points for the 2 high-value measures, for a final total of 38 out of 40 points. The Quality performance category would then contribute 81 points toward the CPS (38/40 × 85% = 81). Within the CPIA the EC reports on 1 high-weighted CPIA and receives the full 40 points within that performance category. This would lead to an additional 15 points (40/40 × 15%) toward the CPS, and a final CPS of 96 out of 100 points. In addition to likely doing well compared with other ECs, given a final CPS higher than 70, this EC would be eligible for a high-performance bonus as well.For the purpose of MIPS, there are several reporting options, which are the same as what was available for PQRS. These include claims-based, traditional registry, group practice reporting option, Electronic Health Record, measure groups, and the Qualified Clinical Data Registry (QCDR). Historically, pathologists have primarily used claims-based reporting, with a smaller percentage using a traditional registry, a group practice reporting option, or the Electronic Health Record. Measure groups do not apply to pathology, and until recently a QCDR was not available. The group practice reporting option is available to multispecialty group practices and uses a Web interface for transmitting data for prepopulated quality measures.Other new payment pathways within the QPP are designated as APMs. These are advanced APMs and physician-focused payment models (PFPMs). The APMs are systems that are meant to promote accountability for a patient population, improving care coordination and encouraging the delivery of high-quality care in a cost-conscious manner. Currently, there are no pathology-specific advanced APMs or PFPMs; however, several pathology practices, especially those in some academic and large multi-institutional groups, are participating in this pathway through their involvement in a specific type of ACO. A potential advantage of participating through an advanced APM pathway is that you are excluded from MIPS, and from 2019 to 2024 your entity will receive an automatic 5% bonus. Additionally, starting in 2026, the physician fee schedule update will be 0.75%, as opposed to only 0.25% from those ECs in the MIPS pathway.Advanced APM encompasses MSSP tracks 2 and 3, Next Generation ACO model, Oncology Care model, Comprehensive End Stage Renal Disease model, and Comprehensive Primary Care+ in 2017. These models differ from some other traditional ACOs and MSSP track 1 in that there is substantial financial risk to the entity. These entities must report on measures that are comparable to MIPS, use certified Electronic Health Record technology, and carry substantial financial risk (8% or more of total Medicare revenue or 3% or more of expected Medicare expenditures). Additionally, these entities must meet a percent of revenue or patient threshold that increases each year (Table 3) in order to qualify as an advanced APM and therefore be exempt from MIPS. In 2018, the CMS may expand the program to include MSSP track 1+, a new voluntary bundled payment model, and the Comprehensive Care for Joint Replacement Payment model.The concept of PFPM was created within the MACRA legislation to foster the development of additional APMs for providers who might not be able to participate in existing pathways; however, no definition was provided. The CMS final rule first revealed the definition and fulfillment criteria. In a broad sense, a PFPM is an APM that must include Medicare beneficiaries, is anticipated to reduce cost and/or improve patient care, and closes an existing payment policy gap. The CMS did expand the definition to include nonphysician health care providers. Any group or entity may propose a PFPM by submitting a proposal to CMS with a projection of the anticipated size and scope of the PFPM; description of the burden of disease, illness, or disability on the target population; and an assessment of the financial opportunity. These proposals will be reviewed by the PFPM Technical Advisory Committee, which makes a recommendation to the Health and Human Services Secretary. The models accepted by the CMS will then undergo a process similar to that of other APMs, including public announcement, comment period, and request for applications.Additional information regarding the QPP can be found at https://qpp.cms.gov/ (accessed January 14, 2017). The history of such programs suggests that the MIPS requirements within each performance category will become more complex and demanding in future years. The thresholds have intentionally been set low at the start of the program to ease EC transition into the program and to minimize disruption to the delivery of health care. As ECs become more familiar with the program, reporting requirements will likely increase. Another potential threat to pathology is the retirement of our high-performing measures by the CMS. As a whole, pathology has done well within the PQRS program. The quality gaps initially seen at the time of creation of the measure have diminished, and therefore the need for those measures from the perspective of the CMS is less pronounced. However, CAP is striving to maintain these measures because they ensure that the quality of care that best serves Medicare beneficiaries will be promoted within the pathology community. However, additional measures need to be created to facilitate all pathologists' compliance with the MIPS program. The creation of a pathology-specific QCDR with a broader menu of measures is one potential way to help the pathology community succeed within MIPS. The CAP is currently in the process of introducing such a registry to the medical community.Participation in an APM by a large number of pathologists is not likely at this time. Similarly, pathology practice will not readily lend itself to the development of PFPM, given the broad range of services provided and specialties with which we interact. Although pathologists' services influence a large percentage of spending, we do not directly control a large portion of the total cost of care; therefore, the risk may seem too great for pathologists to participate in these models. However, pathologists must continuously reassess how to best position ourselves for the future.In the short term, it is essential for ECs and/or their groups to be aware that by simply reporting anything in 2017 they will avoid a 4% penalty to the PFS in 2019. For the Quality performance category, this can most easily be done via claims-based reporting, traditional registry, or, if the EC is part of a multispecialty group, the group reporting option Web interface. Information about the pathology-specific quality measures can be found on the CAP Web site within the advocacy pages (http://www.cap.org/web/home/involved/advocacy/physician-quality-reporting-system; accessed January 14, 2017), or on the CMS Web site (https://qpp.cms.gov/measures/quality; accessed January 14, 2017). An alternative way to participate in 2017 to avoid the MIPS negative payment adjustment is to attest to performing a CPIA. A full list of improvement activities can be found at https://qpp.cms.gov/measures/ia (accessed January 14, 2017).The authors would like to acknowledge and express our gratitude to Charles Fiegl, BA, for his expert review of the manuscript.

BackgroundHealth care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs.MethodsUsing fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014.ResultsMSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was −$474 (−4.9% of the pre-entry mean, P<0.001) for physician-group ACOs that entered in 2012, −$342 (−3.5% of the pre-entry mean, P<0.001) for those that entered in 2013, and −$156 (−1.6% of the pre-entry mean, P=0.009) for those that entered in 2014. The corresponding differential changes for hospital-integrated ACOs were −$169 (P=0.005), −$18 (P=0.78), and $88 (P=0.14), which were significantly lower than for physician-group ACOs (P<0.001). Spending reductions in physician-group ACOs constituted a net savings to Medicare of $256.4 million in 2015, whereas spending reductions in hospital-integrated ACOs were offset by bonus payments.ConclusionsAfter 3 years of the MSSP, participation in shared-savings contracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period. (Funded by the National Institute on Aging.)

You have accessThe ASHA LeaderPolicy Analysis1 Nov 2011Rules Issued for Accountable Care Organizations Mark Kander Mark Kander Google Scholar More articles by this author https://doi.org/10.1044/leader.PA1.16152011.7 SectionsAbout ToolsAdd to favorites ShareFacebookTwitterLinked In ASHA’s concerns about telepractice, access to speech-language and hearing services, and shared savings for speech-language and hearing professionals were not resolved in the Centers for Medicare and Medicaid Services’ (CMS) final rules for accountable care organizations (ACOs), a new model for providing health care services to Medicare beneficiaries under national health care reform law. An ACO is a network of physician group practices, hospitals, and others involved in patient care that share responsibility for providing care to Medicare patients. Much like health maintenance organizations, ACOs would bring together various health care components—primary care, specialists, hospitals, home health care, rehabilitation services—and offer providers and hospitals financial incentives (“shared savings”) for controlling costs and improving quality. However, Medicare patients will continue to have the ability to choose any provider inside or outside the ACO. ACOs are expected to create closer ties between hospitals and physicians and to be attractive to rehabilitation providers. CMS expects that ACOs typically will include primary care physicians, specialists, and a hospital. Rehabilitation services could be provided by in-house staff or by contracted rehabilitation provider organizations. ACOs would most likely contract with a single rehabilitation organization rather than increase administrative burdens by contracting separately with speech-language pathology, physical therapy, and occupational therapy providers. Audiology services could be incorporated into rehabilitation contracts through independent audiology contracts or ACO-participating otolaryngology practices. Shared savings payments would be distributed to physicians and hospitals participating in the ACO and to other providers based on individual contracts and the ACO’s determination of “how to equitably distribute shared savings or use the shared savings to meet the goals of the program,” according to the regulations. The ACO concept can be compared to a construction contract, with the ACO as general contractor and the providers as subcontractors. The final regulations released in October are less stringent than the proposed version. For example, prospective ACOs will not be required to assume financial risk during the first three years. Also, ACOs will be assessed on 33 quality measures (half the number initially proposed) divided into four domains: patient/caregiver experience, care coordination and patient safety, preventive health, and caring for at-risk populations. (Speech-language pathologists and audiologists already participate in the Medicare quality reporting process.) According to CMS, higher quality care will result in greater shared savings payments. Establishing an ACO typically will cost more than $3 million. The regulations create an assistance program—$170 million for up to 50 ACOs—for physicians and small hospitals that lack the requisite capital. In response to proposed ACO regulations issued in April, ASHA submitted comments suggesting that ACOs be required to: Ensure that speech-language pathology and audiology services are accessible to patients. CMS responded that market forces will determine the need for the range of services offered. Allocate an equitable portion of shared savings to speech-language pathologists and audiologists. CMS stated that it lacks legal authority to dictate this distribution. Encourage the use of telepractice services provided by audiologists and speech-language pathologists. In response, CMS announced that it is preparing a separate incentive package, not limited to ACOs, that expands Medicare-reimbursable telepractice services. ASHA will continue to analyze the impact and restrictions of ACOs, which are scheduled to begin operating in 2012. Author Notes Mark Kander, director of health care regulatory analysis, can be reached at[email protected]. Advertising Disclaimer | Advertise With Us Advertising Disclaimer | Advertise With Us Additional Resources FiguresSourcesRelatedDetails Volume 16Issue 15November 2011 Get Permissions Add to your Mendeley library History Published in print: Nov 1, 2011 Metrics Downloaded 48 times Topicsasha-topicsleader_do_tagleader-topicsasha-article-typesCopyright & Permissions© 2011 American Speech-Language-Hearing AssociationLoading ...

The U.S. health care system faces escalating costs and inefficiencies, with Medicare projected to reach insolvency by 2036. Despite this, Medicare Advantage (MA) plans continue to receive preferential funding, resulting in overpayments, rising patient out-of-pocket expenses and limited accountability, instead of being a tool to achieve lower spending and increase quality. Physicians endure payment cuts, sequestration, and denied services, threatening access to care. To analyze MA plans' growth, costs, and policy implications and assess their impact on Medicare solvency, physician reimbursement, and patient care quality. A comprehensive policy and financial analysis using data from Medicare Payment Advisory Commission, Centers for Medicare and Medicaid Services, Congressional Budget Office, peer-reviewed literature, and federal reports from 1997-2025. We reviewed legislative history, financial trends, and quality metrics of Medicare and MA programs. Specific focus was placed on benchmarks, rebates, risk adjustments, favorable selection, coding intensity, and patient access barriers. Data on enrollment trends, geographic variation, and out-of-pocket costs were analyzed. MA enrollment grew from 6.9 million (16% of Medicare beneficiaries) in 2014 to 33.6 million (54%) in 2024. Payments to MA plans exceed fee-for-service (FFS) Medicare by 22%, translating to $84 billion annually, plus $15 billion in quality bonuses. Out-of-pocket maximums surged 859% since 1999, and inappropriate care denials affect 13%-18% of cases. Risk adjustment and coding practices inflate payments, undermining program sustainability. The present investigation relies on secondary data from government agencies and published literature; real-time administrative and clinical data from MA plans were unavailable due to reporting gaps. Originally intended to reduce costs, MA plans have driven higher expenditures, limited access, and increased patient burdens. Policy reforms-including alignment of MA payments with FFS Medicare, elimination of favorable selection and upcoding incentives, and enforcement of coverage requirements-are critical to preserving Medicare solvency and ensuring equitable patient care.

Determinants of success in Shared Savings Programs: An analysis of ACO and market characteristics

Accountable care organizations in the Medicare Shared Savings Program (MSSP) in the United States attempt to reduce cost and improve quality for their patients by improving care coordination across care settings. We examined the impact of hospital participation in the MSSP on 30-day readmissions for several groups of Medicare inpatients, and by race/ethnicity and payer status. A 2010-2016 Medicare Provider Analysis and Review files. With propensity score matched sample of MSSP and non-MSSP-participating hospitals, patient-level linear probability models with difference-in-differences approach were used to compare the changes in readmission rates for Medicare fee-for-service patients initially admitted for ischemic stroke, hip fracture, or total joint arthroplasty in MSSP-participating hospitals with non-MSSP-participating hospitals as well as to compare the changes in disparities in readmission rates over time. Hospital participation in MSSP was associated with further reduced readmission rate by 1.1 percentage points (95% confidence interval: -0.02 to 0.00, P<0.05) and 1.5 percentage points (95% confidence interval: -0.03 to 0.00, P=0.08) for ischemic stroke and hip fracture cohorts, respectively, compared with non-MSSP-participating hospitals, after the third year of hospital participation in the MSSP. There was no evidence that MSSP had an impact on racial/ethnic disparities, but increased disparity by payer status (dual vs. Medicare-only) was observed. These findings together suggest that MSSP accountable care organizations may take at least 3 years to achieve reduced readmissions and may increase disparities by payer status.

Society Leaders Guide the Way Through Public Policy Maze

With the passage of the Affordable Care Act (ACA) in 2010, broad agreement has been reached on the need for fundamental reform of healthcare delivery and payment systems. Accountable care organizations (ACOs) have become one of the most discussed provisions of the ACA, and Medicare's Shared Savings Program (SSP), the incentive program tied to ACOs, has the potential to change the delivery of healthcare. The SSP will attempt to improve the quality of care while reducing the growth in expenditures by encouraging the formation of ACOs. The SSP is voluntary, and organizations that wish to participate will encounter advantages and disadvantages in its adoption. This article provides hospital administrators with basic information about the ACO requirements set forth by the Centers for Medicare & Medicaid Services and helps frame decision making about hospital participation in ACOs.

Data-Driven Incentive Design in the Medicare Shared Savings Program

Evidence of patient and physician turnover in accountable care organizations (ACOs) has raised concerns that ACOs may be earning shared-savings bonuses by selecting for lower-risk patients or providers with lower-risk panels. We conducted three sets of analyses to examine risk selection in the Medicare Shared Savings Program. First, we estimated overall MSSP savings through 2015 using a difference-in-differences approach and methods that eliminated selection bias from ACO program exit or changes in the practices or physicians included in ACO contracts. We then checked for residual risk selection at the patient level. Second, we re-estimated savings with methods that address undetected risk selection but could introduce bias from other sources. These included patient fixed effects, baseline assignment, and area-level MSSP exposure to hold patient populations constant. Third, we tested for changes in provider composition or provider billing that may have contributed to bonuses, even if they were eliminated as sources of bias in the evaluation analyses. We find that MSSP participation was associated with modest and increasing annual gross savings in the 2012-2013 entry cohorts of ACOs that reached $139-302/patient by 2015. Savings in the 2014 entry cohort were small and not statistically significant. Robustness checks revealed no evidence of residual risk selection. Alternative methods to address risk selection produced consistent results but were less robust than our primary analysis, suggesting the introduction of bias from within-patient changes in time-varying characteristics. We find no evidence of ACO manipulation of provider composition or billing to inflate savings. We further demonstrate that exit of high-risk patients or physicians with high-risk patients from ACOs is misleading without considering a counterfactual among non-ACO practices. We conclude that participation in the original MSSP program was associated with modest savings and not with favorable risk selection. These findings suggest an opportunity to build on early progress. Understanding the effect of new incentives and opportunities for risk selection in the revamped MSSP will be important for guiding future program reforms.