What Accountable Care Organizations Need to Know About the MSSP Final Rule

On June 6, 2016, the Centers for Medicare & Medicaid Services (CMS) issued its final rule (accessible at, https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-13651.pdf) strengthening incentives for Accountable Care Organizations (ACO) in the Medicare Shared Savings Program (MSSP). According to the CMS Acting Administrator, the changes “will encourage more physicians to improve patient care by joining Accountable Care Organizations, while also refining how the program measures success, so that current participants are better rewarded for quality.”

Key changes in the final rule include:

  1. Benchmarking Methodology – Starting on or after January 1, 2017, for ACOs in their second or subsequent agreement periods, CMS will use regional growth trend factors rather than national factors for determining the ACO’s financial targets. In determining payment, CMS will assess how an ACO delivers high-quality care at a lower cost against other providers in the same regional market versus comparing an ACO against its own past performance.
  2. Additional Option for ACOs under Track One – ACOs under Track One (one-sided shared savings model) can now apply to renew the initial agreement under Track One for a year before taking on financial risk under Tracks Two or Three. According to CMS, this will provide ACOs with a smoother and quicker transition to the more advanced tracks.
  3. Payment Transparency – CMS defines timeframes and criteria for ACOs to appeal CMS’ determination of ACO shared savings or shared losses; ACOs have four years to challenge an initial determination for good cause.

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