CMS Releases Revised Regulations for Accountable Care Organizations Participating in the Medicare Shared Savings Program

By Matthew J. Effken.  The Centers for Medicare and Medicaid Services has released newly revised federal regulations designed to encourage greater participation in the Medicare Shared Savings Program (MSSP) by Accountable Care Organizations. Under MSSP, healthcare providers that participate in an ACO receive traditional Medicare fee-for-service payments, but also may be eligible to receive shared savings payments by meeting specified quality and cost-savings benchmarks.

The revised regulations sweeten the financial incentives available to ACOs by providing an additional 3‑year period before so-called Track 1 MSSP participants may incur financial penalties for failing to meet program benchmarks. Organizations participating in the higher risk Track 2 program, where ACOs share in both savings and losses, will see the potential for greater incentive payments for meeting targets.

A third track is also being added, which will provide the potential for even higher incentive payments to participating ACOs based on a savings sharing rate of up to 75 percent, in exchange for accepting more downside risk. CMS is also considering revisions to the process of setting program benchmarks and assigning Medicare beneficiaries to ACOs, in response to comments received from participating organizations. CMS will seek comments on a revised benchmarking methodology later this summer.

CMS says there are already over 7 million Medicare beneficiaries served by the more than 400 Accountable Care Organizations that currently participate in MSSP. CMS estimates that the revisions to the MSSP program will result in an additional $240 million of net federal savings, primarily by increasing the number of ACOs willing to continue their participation in the program beyond the initial three year commitment. Shared savings payments to be made to participating ACOs are estimated to be approximately $1.13 billion from 2016 through 2018, which translates to a net private benefit to the ACOs of $278 million, after accounting for start-up costs and shared losses.

The CMS release and revised regulations are available at the following link: https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-14005.pdf

© 2015 Houghton Vandenack Williams

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