Jan 4, 2019
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CMS Finalizes Changes to the Medicare Shared Savings Program

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The Center for Medicare and Medicaid Services (CMS) has published a 957-page final rule that confirms changes made to the Medicare Shared Savings Program (MSSP). This new rule will be expected to have a substantial impact on Accountable Care Organizations (ACOs) that rely on one-sided risk models, in so far as ACOs in the program will be forced to assume a larger amount of financial risk than under the current landscape. CMS’s new program, “Pathways to Success”, will afford smaller, physician-led ACOs a period of three years to remain in a one-sided risk model. All new ACOs will have two years, while existing ACOs with one-sided risk models will only have solely a year to adopt the new program and assume the additional financial risk.

CMS has also reduced the shared savings rate to 40% for ACOs that do not assume risk for health care costs, but the 50% rate for ACOs at all other levels of financial risk remains unchanged. With this new rule, announced December 21, 2018, CMS projects $2.9 billion in savings over the next ten years as ACOs take on more risk.

In CMS’s current program, which has been in effect for six years, ACOs were eligible to receive a portion of any savings that were generated, provided that they met quality standards for the care they provided to their patients. Currently, only a limited number of ACOs are subject to any sort of financial penalties in cases in which costs increase. However, from the experience running MSSP, CMS has been able to determine that ACOs that are required to take responsibility for costs tend to perform better than those that do not. This new rule provides incentives for ACOs to provide high-quality care in order to generate additional savings for themselves.



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