Pathways to Success
In 2018, about one-third of all hospitals and clinicians were part of an accountable care organization (ACO) that participated in the Medicare Shared Savings Program (MSSP). Historically, the Centers for Medicare & Medicaid Services (CMS) offered a once-a-year opportunity for ACOs to apply for the MSSP with a January 1 start date.
In 2018, however, CMS never extended this opportunity; thus, no new ACOs joined the program on January 1, 2019. Those ACOs that were due to renew their participation at the end of 2018 had the option to extend their current agreement by six months or terminate the program.
In December 2018, CMS finalized changes to the MSSP to require ACOs to accept downside risk on an accelerated schedule. CMS refers to these revisions as Pathways to Success.
The new rule created two application periods in 2019, one of which has already come and gone (for a July 1, 2019, start date). The next application cycle—for ACOs interested in starting an agreement on January 1, 2020—is now open. The required Notice of Intent to Apply (NOIA) must be submitted by June 28. The full application is due July 29.
Application Considerations for New and Existing ACOs
Submitting an application imposes no obligations. An ACO is not required to formally commit to participation in the MSSP until November 2019. Thus, an organization considering participation in the January 1, 2020, MSSP cohort can reserve a spot by submitting an NOIA by the June 28 deadline without assuming any obligations.
In completing and filing its application for participation in Pathways to Success (before the July 29 deadline), an ACO does not assume any obligation. An ACO may still choose to forgo executing the contract with CMS (assuming the ACO’s application was approved) with no penalty, preserving its ability to reapply in the future.
If an ACO does not submit an NOI, or chooses not to participate after filing an application, its next opportunity to apply will likely be sometime in the 2nd or 3rd quarter of calendar year 2020—CMS has not yet released those dates—for participation beginning January 1, 2021.
Pathways to Success requires a faster transition to two-sided risk models. The original MSSP rules allowed new ACOs to participate for up to six years without taking on downside financial risk—and many ACOs elected to use this full six-year ramp-up period to gain experience. However, within the new Pathways to Success structure, certain new ACOs now only have up to three years before being forced into a two-sided risk model.
CMS has moved from three-year to five-year agreement periods. An ACO can voluntarily terminate its agreement during the five-year performance period, but it may not be eligible to receive shared savings and may be responsible for a portion of shared losses, depending on the time of year the ACO terminates.
The familiar Tracks 1, 2, 3, and 1+ are gone, but the new tracks and levels are similar. In addition to moving from three- to five-year agreements, CMS also introduced new tracks and participation levels. The table below highlights key terms of each track and level.
Two new factors significantly impact participation options: revenue status and experience level. In developing Pathways to Success, CMS analyzed past ACO performance and determined that the following two distinctions were important in driving the agency’s goals.
Experience Level: ACOs that have already participated in two-sided MSSP models (or new ACOs for which at least 40% of participants previously have participated in two-sided Medicare shared savings program) are defined as “Experienced” and cannot go back to one-sided models under Pathways to Success. ACOs classified as “Inexperienced” will have the opportunity to start in one-sided models and transition to two-sided risk.
Revenue Status: High revenue ACOs capture at least 35% of the Medicare payments for their attributed beneficiaries. Like experience level, revenue status will also impact the level at which an ACO may enter Pathways to Success.
The following graphic summarizes the lowest-risk participation options for renewing or re-entering MSSP ACO participants. ACOs new to the MSSP can enter BASIC Level A.
Although CMS will not provide an applicant with its official revenue and experience statuses until after the application is submitted, an ACO still will have two to three months to analyze the impact prior to executing the formal participation agreement with CMS.
The benchmarking methodology has changed again. The new rule will incorporate several changes to the benchmark (e.g., regional vs. national fee-for-service adjustments, trend adjustments, risk score adjustments) that will likely impact most ACOs. Both existing and new ACOs should evaluate the potential impact of the new benchmarking methodologies. However, CMS will not calculate an ACO’s individual benchmark until after the ACO’s performance period begins.
There are other changes in Pathways to Success that can benefit ACOs, including:
- New flexibilities for beneficiary incentive programs.
- Opportunities for prospective beneficiary assignment.
- Waiver expansions.
Evaluation and Other Options
Evaluating an applicant’s opportunity under the MSSP has never been more important, given the financial implications of a five-year participation agreement. PYA has created a tool for organizations considering participation, which will help demonstrate the potential upside and risks of participation based on an organization’s unique circumstances. A sample of the tool is included below:
There are plenty of other non-financial considerations for applicants to evaluate. PYA has assisted numerous now-successful MSSP ACOs in evaluating the opportunity, preparing and submitting an MSSP application, and establishing ongoing operations.
Furthermore, Pathways to Success may not be right for every organization, but fortunately there are plenty of other options to participate in Medicare’s Alternative Payment Models. Right now, the application period is open for BPCI Advanced— Medicare’s bundled payment program with over 30 clinical episodes. Additionally, applications will soon be available for CMS’ new Primary Care First and Direct Contracting models.
If you are interested in PYA modeling your organization’s Pathways to Success financial scenarios, would like to receive a complimentary analysis, or would like our team to help you evaluate the best opportunities for your organization, contact one of our PYA executives below at (800) 270-9629.
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