May 7, 2018

Should Your Track 1 MSSP ACO Jump to Track 1+?

If you participate in Track 1 of the Medicare Shared Savings Program (MSSP), now is the time to evaluate whether to jump to Track 1+ for 2019.

If your accountable care organization (ACO) is due for renewal (i.e., you joined the program in 2013 or 2016), and you want to explore the Track 1+ opportunity, you must select this option on your Notice of Intent to Apply (NOIA).

Even if your ACO is not up for renewal, you still have the option of submitting an NOIA to participate in Track 1+ next year.

In either case, submitting the NOIA does not commit you to making the switch in 2019; you would not have to make a final decision until the fall.  However, if you do not submit an NOIA indicating interest in Track 1+ for 2019, you will forgo the opportunity until 2020.

So why should a Track 1 ACO consider moving to Track 1+?  According to the National Association of ACOs, 7 out of 10 MSSP ACOs would likely leave the program if required to assume risk.  Track 1+ offers a way to limit downside risk while opening new opportunities for ACOs.

Like their Track 1 counterparts, Track 1+ ACOs may receive up to 50% of savings (assuming the minimum savings rate is met or exceeded), not to exceed 10% of the ACO’s updated historical benchmark.  By comparison, a Track 2 ACO may earn up to 60% of savings, not to exceed 15% of its benchmark, and a Track 3 ACO may earn up to 75%, not to exceed 20% of its benchmark.

Unlike Track 1, Track 1+ qualifies as an Advanced Alternative Payment Program (APM) under the Quality Payment Program, meaning participating physicians are eligible for a 5% bonus on Part B billings.  This is because Track 1+ involves downside risk, albeit significantly less than Tracks 2 and 3 (which is the trade-off for a lower percentage of shared savings).  Track 1+’s limited risk made it relatively popular in its first year, with 55 ACOs electing to participate in the model in 2018.

Like Tracks 2 and 3, Track 1+ includes options that may make it easier for an ACO to earn shared savings.  These include (1) the ability to adjust the ACO’s minimum savings and minimum loss rates, (2) prospective beneficiary assignment, and (3) the availability of the skilled nursing facility (SNF) 3-Day Rule Waiver.

Choose your own MSR/MLR.  In Track 1, an ACO’s minimum savings rate (MSR) is calculated based on the number of attributed beneficiaries.  The lowest possible MSR under this methodology is 2.0% for an ACO with 60,000+ beneficiaries; the highest MSR is 3.9%.  In 2016, one-quarter of all ACOs generated savings, but did not meet their MSR and thus received no distribution.

Track 1+ offers ACOs the opportunity to select their MSR and minimum loss rate (MLR, referring to the percent of benchmark an ACO must exceed before owing any repayment) as part of the application process.  The MSR/MLR can be as small as 0%, symmetrical in 0.5% increments between 0.5% and 2%, or symmetrical based on the number of assigned beneficiaries, as calculated in Track 1.

Because the MSR and MLR must be symmetrical, a lower MSR also means a lower threshold for shared losses.  However, Track 1+ significantly limits potential losses compared to Tracks 2 and 3 because of a key difference in the loss sharing limit.

Benchmark-based or revenue-based loss sharing limits.  In Track 1+ the maximum level of downside risk varies based on the composition of the ACO.  In its application, an ACO must respond to the following questions.  If any response is affirmative, the ACO is subject to benchmark-based loss sharing.  If all responses are negative, or not applicable, the ACO qualifies for revenue-based loss sharing.

  1. Are any of your ACO participants one of the following institutional providers: inpatient prospective payment system (IPPS) hospital, cancer center, or rural hospital with more than 100 beds?
  2. Are any of your ACO participants owned or operated by (in whole or in part) one of the following institutional providers: IPPS hospital, cancer center, or rural hospital with more than 100 beds?
  3. Are any of your ACO participants owned or operated by (in whole or in part) an organization that owns or operates one of the following institutional providers: IPPS hospital, cancer center, or rural hospital with more than 100 beds?
  4. Is your ACO participant rural hospital with 100 or fewer beds owned or operated by (in whole or in part) a health system?
  5. Does a rural hospital with 100 or fewer beds, that is not on your ACO Participant List, own or operate (in whole or in part) an ACO participant?

Benchmark-based loss sharing limit.  Under the benchmark-based loss sharing limit, an ACO’s maximum downside risk is 4% of the ACO’s updated Parts A & B benchmark.  This is lower than both the loss sharing limit in Track 2, which increases each year from 5% to 7.5% to 10%, and Track 3, which has a fixed loss sharing limit of 15%.

Revenue-based loss sharing limitThe revenue-based loss sharing limit is calculated as a percentage of the ACO participants’ total Medicare fee-for-service (FFS) revenue.  This figure, which meets the nominal risk requirement for Advanced APM status, will remain the same in 2019 and 2020.  Thereafter, the amount of risk will increase as necessary to be consistent with the Advanced APM nominal risk requirement.

Should the revenue-based loss sharing limit be greater than the benchmark-based loss sharing limit for an ACO, that ACO’s loss limit will be capped and set at 4% of the updated historical benchmark, regardless of the ACO’s composition.

The revenue-based loss sharing limit is especially attractive for physician practice-based ACOs.  Because the participants in such an ACO would only have revenue from Part B charges, the loss sharing limit will be significantly lower than that of an ACO whose participants also receive Part A revenue.

SNF 3-Day Rule Waiver.  One of the greatest opportunities ACOs have for curbing costs lies in post-acute care.  However, ACOs frequently lack the tools and incentives to create a meaningful relationship with post-acute care providers in their communities.

Under Track 1+, ACOs can apply for the SNF 3-Day Rule Waiver, which otherwise is only available to Track 3 ACOs.  The waiver removes the requirement for a three-day inpatient hospital stay prior to admission to an SNF.  To apply for the waiver, the ACO must submit a list of SNF Affiliates and execute a CMS-approved SNF Affiliate Agreement for each Affiliate.  The ACO must also submit a communication plan, beneficiary evaluation and admission plan, and a care management plan.

SNF Affiliates must maintain an overall rating of three stars or higher under the CMS 5-Star Quality Rating System.  They are not required to be ACO participants.

Prospective attribution. In Track 1, beneficiaries are attributed to ACOs retrospectively, after a preliminary prospective assignment is reconciled.  This means that beneficiaries are initially assigned to the ACO based on prior year data, which is updated at the end of the performance year based on actual utilization during that year.   According to CMS, about 20% of beneficiaries on the prospective attribution list typically do not appear on the final attribution list.  Thus, the ACO never has an accurate list of the beneficiaries for whom it is responsible during the performance year.

In Track 1+, as in Track 3, CMS uses prospective attribution, assigning beneficiaries based on historical claims data.  This allows the ACO to know in advance the population for which it is accountable.  The providers can then be proactive in specifically engaging those beneficiaries in their efficiency efforts.

Coming soon: expanded telehealth opportunities.  Under the Bipartisan Budget Act of 2018, certain barriers to providing telehealth services have been waived for risk-bearing ACOs (but not Track 1 ACOs) beginning in 2020.  Specifically, an ACO Participant will be reimbursed for telehealth services furnished to an attributed beneficiary in his or her home (as opposed to an originating site) regardless of whether the beneficiary is located in a rural or health professional shortage area.

PYA can help.  To say there are several variables to consider in your MSSP strategy is an understatement.  Our experts are available to discuss the strategic and financial implications of transitioning from Track 1 to Track 1+, and other opportunities under the MSSP.  For more information, contact PYA Principal Martie Ross at (800) 270-9629.

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