What’s New and What’s Changing in MSSP in Coming Years?

By Erica Everhart

August 15, 2022

On July 7, 2022, CMS released the 2023 Physician Fee Schedule Proposed Rule which adds some interesting and beneficial new features into the Medicare Shared Savings Program (MSSP). Organizations who are not currently enrolled in MSSP or ACO REACH might find enough enticement in these new features to re-evaluate their decision to participate in a risk-based program.

It is important to note that this is the proposed rule, and there is a comment period before these proposed changes become final, but the proposed rule gives a strong look into what MSSP will look like in 2023 and 2024. Let’s look at some of the notable new features and changes to MSSP in the coming years:

Lowering Barriers to Entry for ACOs

Two of the bigger proposed changes are aimed at lowering the barriers to entry for smaller, less experienced ACOs by (1) providing an upfront payment to help with the costs associated with joining a value-based care organization in the form of the Advance Investment Payment; and, (2) lengthening the amount of time before an ACO must take on downside risk. CMS’s hope is that by enacting these two changes, we will see an increase in participation in MSSP amongst practitioners that up until now have been hesitant for financial reasons. Increasing the number of practitioners in MSSP will also increase the percentage of Traditional Medicare beneficiaries who are in value based care arrangements, furthering the CMS Innovation Center’s goal of having all Traditional Medicare beneficiaries in a value based care arrangement by 2030.

Advance Investment Payment

One of the more exciting additions to MSSP is the proposed Advance Investment Payment. The CMS Innovation Center is meant as a testbed for programs that can eventually roll into the MSSP chassis and we see that with the Advance Investment Payment which is modeled off of the successful ACO Investment Model (AIM) that ran from 2015 through 2018. The Advance Investment Payment will help certain ACOs in rural or underserved areas receive money from CMS up front as well as quarterly payments for two years. This “investment” by CMS provides an opportunity to participate in MSSP to groups that otherwise would not have the resources to start up an ACO. In 2011, CMS estimated that it would cost an ACO $580,000 just to get started in the program and $1.7M in ongoing operation expenses. Those numbers are even higher over a decade later with substantially rising healthcare costs.

The investment payments will be recouped by CMS once the ACO starts to see savings, however if the ACO does not achieve savings then CMS will not recoup the investment so long as the ACO does not drop out of MSSP until their contractual term is over. The AIM was a successful model that resulted in improvements in both spending and utilization.

Who is eligible?

  • ACOs new to MSSP (not a renewing ACO or re-entering ACO as those terms are defined by 42 CFR 425.20)
  • ACOs that have applied to, and are eligible to, participate in MSSP under any level of the BASIC track glide path.
  • ACOs that are inexperienced with performance-based risk Medicare ACO initiatives.
  • Low revenue ACOs, defined by 42 CFR 425.20 as ACOs who only control up to 35% of their assigned beneficiaries’ Medicare costs.

What are the benefits?

  • ACOs will receive a one-time lump sum payment of $250,000.
  • ACOs will also receive eight quarterly payments based on the number of assigned beneficiaries, capped at 10,000 beneficiaries. The proposed quarterly payment would be a per-beneficiary amount that is based on risk factors such as the Area Deprivation Index for the beneficiary’s Census block group and dual eligibility for Medicare and Medicaid.

What is required?

  • ACOs must apply for the AIP. CMS is proposing a January 1, 2024 start date for the AIP.
  • The application must include a plan on how the investment funds will be spent. The goal of the program is to reach underserved populations more effectively and so part of the spend plan should include efforts to accomplish that goal.

Smoother Glide Path to Risk

In the preamble to the MSSP section of the Physician Fee Schedule, CMS expressed concern that the MSSP participation has plateaued in recent years. They stated that many of the changes they are enacting are to encourage additional participation – even if that participation is in upside-risk only arrangements. CMS feels that the benefits afforded to beneficiaries enrolled in ACOs should be more broadly available, especially as CMS pushes for making healthcare more equitable for all. In looking at what has caused providers to shy away from MSSP, or to exit the program after an agreement period, a common theme amongst providers was that their organization didn’t feel ready to take on any, or additional, downside risk. This extended glide path into downside-risk arrangements is aimed at encouraging participation by removing what has been a barrier to entry – a push into downside risk too soon for low-revenue and/or risk-inexperienced ACOs, .

Beginning January 1, 2024, ACOs that are inexperienced in two-sided risk (as specified in 42 CFR 425.20) can participate in the BASIC track’s glide path with the option of remaining in Level A for all five years of their contract. These ACOs may also be eligible for a second participation agreement allowing them two additional years for a total of seven upside-only risk years before transitioning to a two-sided risk model. If an ACO is both low-revenue and inexperienced with risk, they are eligible for a second agreement period with five years of Level A participation which would give them twelve years before transitioning to a risk bearing arrangement in year three of their third agreement period.

Additionally, ACOs inexperienced with risk who are either currently participating in Level A or B in PY 2022 or who begin performance January 1, 2023 may remain in the current track level for the duration of their agreement.

Proposed Participation Option

ACO Type ACO Experienced or Inexperienced with Performance-based Risk Medicare ACO Initiatives Participation Options
First Agreement Period (or Subsequent for Renewing/Re-entering ACOs, or Current for Currently Participating ACOs) Next Agreement Period Future Agreement Periods
New legal entity (An ACO that has never participated in the Shared Savings Program and is not identified as a re-entering ACO or a renewing ACO) Inexperienced* A, A, A, A, A via one-time election prior to the start of the second performance year A, B, C, D, E Remain in Level E indefinitely, or move to ENHANCED track
New legal entity (An ACO that has never participated in the Shared Savings Program and is not identified as a re-entering ACO or a renewing ACO) Experienced E, E, E, E, E E, E, E, E, E Remain in Level E indefinitely, or move to ENHANCED track
Re-entering ACO Inexperienced – former BASIC track Level A or B A, B, C, D, E E, E, E, E, E Remain in Level E indefinitely, or move to ENHANCED track
Re-entering ACO Inexperienced* – former Track 1 A, A, A, A, A via one-time election prior to the start of the second performance year A, B, C, D, E Remain in Level E indefinitely, or move to ENHANCED track
Re-entering ACO Experienced – participated under Track 2, 3, BASIC track Level C, D or E, ENHANCED track, the Track 1+ ACO Model, or another performance-based risk ACO initiative E, E, E, E, E E, E, E, E, E Remain in Level E indefinitely, or move to ENHANCED track
Currently participating ACO in level A or B for PY 2022 Inexperienced* – BASIC track Level A or B Current level (remain at A or B for remainder of current agreement period) A, B, C, D, E Remain in Level E indefinitely, or move to ENHANCED track
ACOs in Level A or B with agreement periods beginning on 1/1/23 Inexperienced* – BASIC track Level A or B Current level (remain at A or B for remainder of current agreement period) A, B, C, D, E Remain in Level E indefinitely, or move to ENHANCED track
Renewing ACO Inexperienced A, B, C, D, E E, E, E, E, E Remain in Level E indefinitely, or move to ENHANCED track
Renewing ACO Experienced – participated under Track 2, 3, BASIC track Level C, D, E, or ENHANCED track, the Track 1+ ACO Model, or another performanced-based risk ACO initiative E, E, E, E, E E, E, E, E, E Remain in Level E indefinitely, or move to ENHANCED track

Any ACO, regardless of type or experience level, may elect to progress more quickly along the BASIC track glide path or to apply to enter a new agreement period under the ENHANCED track at any time.
* Under the newly proposed 425.600(h), if an inexperienced ACO meets the definition of experienced with performances-based risk Medicare ACO initiatives (as specified in 425.20), that the ACO would be permitted to complete the remainder of its current performance year in one-sided model of the BASIC track, but would be ineligible to continue participation in the one-sided model after the end of that performance year if it continues to meet the definition of experienced with performance-based risk Medicare ACO initiates and would be automatically advanced to Level E of the BASIC track at the start of the next performance year.
** First Agreement Period (or Subsequent for Renewing/Re-entering ACOs, or Current for Currently Participating ACOs)

Alternative Participation Option

ACO Type ACO Experienced or Inexperienced with Performance-based Risk Medicare ACO Initiatives ACO Low or High Revenue Participation Options
First Agreement Period Second Agreement Period Third Agreement Period Future Agreement Periods
New legal entity (An ACO that has never participated in the Shared Savings Program and is not identified as a re-entering ACO or a renewing ACO) Inexperienced* Low Revenue A, A, A, A, A via one-time election prior to the start of the second performance year of the first agreement period A, A, A, A, A via one-time election prior to the start of the second performance year of the second agreement period A, B, C, D, E Remain in Level E indefinitely, or move to ENHANCED track

Any ACO, regardless of type or experience level, may elect to progress more quickly along the BASIC track glide path or to apply to enter a new agreement period under the ENHANCED track at any time.
* Under the newly proposed 425.600(h), if an inexperienced ACO meets the definition of experienced with performances-based risk Medicare ACO initiatives (as specified in 425.20), that the ACO would be permitted to complete the remainder of its current performance year in one-sided model of the BASIC track, but would be ineligible to continue participation in the one-sided model after the end of that performance year if it continues to meet the definition of experienced with performance-based risk Medicare ACO initiates and would be automatically advanced to Level E of the BASIC track at the start of the next performance year.

Reducing Administrative Burdens for ACOs

Certain aspects of ACO management have been identified as burdensome, which increases costs. CMS is proposing a few adjustments to the current system that will hopefully alleviate some of these administrative burdens.

  • Marketing materials will no longer need to be reviewed by CMS prior to use. ACOs must abide by marketing rules, and CMS reserves the right to audit materials at any time, but CMS is proposing to eliminate the requirement for ACOs to have marketing materials pre-approved.
  • No more required annual beneficiary notices in the mail! CMS is proposing that ACOs provide a beneficiary notice prior to or at the first primary care service of the first performance year. This will allow providers to communicate with the beneficiaries and answer any questions they may have, instead of having beneficiaries open a random letter in the mail. The ACO will be required to have a follow up communication with the beneficiary within 180 days of the initial communication that year for only 2 required communications over the 5 year performance period, both of which may be delivered personally instead of in writing in the mail.
  • No more narratives required for SNF 3-day waiver applications. Starting January 1, 2024, CMS is proposing a requirement that ACOs submit an attestation that they have established the relevant plans for SNF 3-day waivers.
  • ACOs that are acting as Organized Health Care Agreements (OHCAs) may now request aggregated reports and beneficiary identifiable claims data from CMS. OHCAs may also comply with eCQMs/MIPS CQMs as a group, instead of at the individual ACO level.

Proposed Benchmark Calculation Changes

Two common complaints with the current MSSP benchmark calculation surround the so called “ratchet effect” which has two prongs: (1) since an ACO’s historical performance is included in their benchmark calculation, when ACOs start achieving savings, their benchmark necessarily goes down during rebasing (when they renew or re-enter the program) and this leads to MSSPs having to beat their own performance year over year (the “rebasing ratchet effect”); and (2) a regional adjustment is also part of the benchmark calculation so when an ACO has significant market penetration and they are achieving savings, the average for the entire region goes down which also impacts their benchmark (the “regional ratchet effect”). The regional ratchet effect is also sometimes termed the “rural glitch” because in rural areas sometimes one ACO is the only ACO in the region therefore they are the market. CMS’s goal is to have all beneficiaries in a value based care arrangement by 2030, which means CMS needs ACOs to want to continue in MSSP. With the current benchmark calculation strategy, ACOs can reach a point when they can no longer beat their own performance and will seek to exit the program.

To address this, CMS is proposing a few changes:

  • Removal of the negative regional adjustment to the benchmark. If an ACO’s benchmark is higher than the regional average, then the ACOs benchmark will only be comprised of their own historical performance with no regional adjustment.
  • Introduction of the “Accountable Care Prospective Trend” (ACPT) as a component of a three factor blend to update the ACOs historical benchmark for the current performance year. The ACPT is an administratively set growth factor based on the United States Per Capita Cost (USPCC) that is annually set by the Office of the Actuary and will account for one-third of the benchmark adjustment factor (the existing national-regional blend represents the other two-thirds).. The ACPT is a slightly modified version of the USPCC that excludes payments for indirect medical education, disproportionate share hospitals, and the proposed new supplemental payment for IHS/Tribal Hospitals and hospitals in Puerto Rico. The ACPT would, however, include payments for hospice care that are not currently included in the USPCC. The ACPT will be calculated separately for the ESRD population and the Aged/Disabled populations and would be projected out for the entire five year agreement period before the performance period starts.The ACPT is intended to help offset the “ratchet effect”/”rural glitch” by diluting the regional adjustment and working towards simplifying the administrative burdens of ACOs. While diluting the rural glitch will work to the benefit of some ACOs, the introduction of an administratively set growth factor also brings a layer of financial uncertainty to ACOs. Even though CMS seeks to minimize this uncertainty by projecting the ACPT for the entire five-year performance period, having a portion of the benchmark that is set administratively and not directly linked to the historical, reportable costs of beneficiaries could also subject ACOs to the shifting tides of politics without recourse. To help mitigate these concerns, we strongly encourage CMS to embrace the Biden Administration’s commitment to greater transparency by engaging the public in the ACPT factor setting process, and to publish all underlying data and logic, including via the CMS-managed VRDC for sensitive information, to instill greater confidence in the administratively set benchmark.
  • Re-introducing a prior savings adjustment that would return funds that reflect the ACOs successful savings back into the benchmark calculation for renewing or re-entering ACOs, helping to mitigate the rebasing ratchet effect.
  • Adjusting the negative regional adjustment cap from -5% to -1.5% and further reducing the impact of the regional adjustment cap as the ACOs percentage of dual eligible population increases.

Additionally, CMS is proposing changes to the risk score calculation methodology to be more in line with the methodology used in ACO REACH. Risk score growth will be capped at 3%, but that 3% is relative to the demographic relative factor growth. In other words, the 3% applies to the growth in disease relative factors. For a more in-depth explanation of risk score calculation under ACO REACH, please see our blog post on Understanding Risk Scores in ACO REACH.

Finally, as with ACO REACH and the new Enhancing Oncology Model, MSSP will have a health equity benchmark adjustment. Unlike REACH and EOM, which have a per beneficiary payment, the proposed Health Equity Adjustment for MSSP will be an adjustment of up to 10 bonus points to an ACO’s quality performance scores. The fear is that beneficiaries who are historically underserved also have lower quality scores andACOs will avoid taking on the care of underserved beneficiaires and so adding bonus points to their quality scores is a way to mitigate that fear.

The awarding of points will be based upon high quality measure performance and the proportion of underserved or dual eligible beneficiaries an ACO provides care for. As with other models, determining who constitutes an underserved beneficiary will be based on their Area Deprivation Index score or their dual-eligibility status. In this health equity adjustment, beneficiaries residing in a Census block group with an ADI score of 85 or higher or beneficiaries who are dual eligible will count towards an ACOs underserved population.

Interoperability

Based on an existing regulation, ONC’s Cures Act Final Rule, EHR vendors are required to “certify and provide” technology that meets the API criteria in the ONC Health IT Certification Program by December 31, 2022. In the 2023 Physician Fee Schedule Proposed Rule, CMS sets the deadline for providers to “turn on” these APIs no later than September 30, 2023, consistent with prior years requiring at least one quarter of technology use as an EHR reporting period.

Overall, this represents a significant step in the move toward interoperability as a commodity. Using regulated standards, patients and providers have more options to leverage data in pursuit of better health outcomes. The API criteria required in the 2015 Edition Cures Update brings 3 modes of interoperability to the market. These include:

  • Standardized API for consumers where a single patient’s data is the focus
  • Backend services scope for providers where multiple patients’ data is the focus
  • Standardized API for a population where multiple patients’ data is the focus

As providers adopt these new features, ACOs will have additional tools to reduce administrative burden and improve outcomes for their patients using regulated standards for interoperability.

What is Not in the Physician Fee Schedule?

Just as important as what is included in the Physician Fee Schedule Proposed Rule for 2023 is what is not included. In our opinion there are two notable omissions: (1) no change to the sunsetting of the 5% Advanced APM bonus, and (2) no extension of the date for eQCM reporting nor on the requirement that this reporting consist of all-payers/all-patients.

The 5% bonus that Advanced APMs earn is scheduled to end in 2022. As of now, there is not any imminent legislation to extend that bonus. The Physician’s Fee Schedule is soliciting comments for how to appropriately incentivize Advanced APMs in the absence of this 5% bonus, especially in light of the 4.5% decrease in the conversion factor that governs physician reimbursement.

Beginning in 2025, all ACOs will be required to report three clinical quality measures electronically – and these reports must encompass all-payers across all-patients. Many were hoping and lobbying for a delay on this deadline because the burden on many ACOs to successfully integrate many disparate EHRs is high and expensive. However, the 2023 Physician Fee Schedule reinforces the requirement for all ACOs to report eCQMs/MIPS CQMs beginning in performance year 2025.

In Summary

The 2023 Proposed Physician Fee Schedule provides some exciting opportunities for providers to participate in MSSP who historically have not participated due to inexperience with risk or financial concerns. It also provides some changes to benchmark calculations and administrative burdens to hopefully provide ACOs with the proper incentives to continue their participation in MSSP.

There are additional proposed changes to MSSP in the Physician Fee Schedule, but the ones we’ve outlined above represent those changes that are likely to impact an organization’s decision to enter MSSP or renew their agreement.

How CareJourney Can Help

As we continue to assess the changes to the MSSP Program, there are several ways in which CareJourney can further support value-based organizations to drive actionable next steps from these insights, including:

  • Evaluate the potential savings in switching the site of service for procedures, imaging, and labs for an attributed population.
  • Track care management compliance from all levels of an organization: patient, provider and group levels.
  • Understand utilization of services from an attributed population and cultivate strong preferred provider and facility networks.
  • Understand provider performance and provide the insights needed for performance management conversations.
  • Leverage CareJourney claims ingestion and transformation Population Insights tool to track care interventions in real time.

Many CareJourney members are top-performing ACOs, including Rush Health, PBACO, Privia, Silver State, Louisiana Physicians ACO, and South Texas ACO Clinical Partners. Collectively these members made over $200 million in shared savings. If you are currently a member and interested in how CareJourney can help you gain insights into designing and managing a value-based organization, please reach out to your Member Services representative for more information. If you are not a CareJourney member, please email us at [email protected], or you can learn more by requesting a meeting.

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