HealthCare Business News spoke with Karen Ferguson, senior director of public policy, and Garrett Eberhardt, manager, government relations, from the American Medical Group Association (AMGA). AMGA represents the interests of multispecialty medical groups and other large, integrated health care delivery systems. Of AMGA’s member medical groups, 135 of them have embarked upon the Accountable Care Organization (ACO) journey. HCB News asked Ferguson and Eberhardt for their reactions to the recent Centers for Medicare and Medicaid Services (CMS) final regulations on the Medicare Shared Savings Program (MSSP) and their impact on ACOs.

HCB News: CMS recently published final regulations that made modifications to the MSSP. In general, what impact do you think they will have on medical groups and health care systems as they decide whether to continue participation in the MSSP, or apply to be an ACO for the first time?

AMGA: CMS made some important programmatic changes in the final rule. We were pleased to see that CMS will permit ACOs to remain in Track 1 for another three-year agreement period at the same minimum savings rate. The original proposal would have levied a financial penalty on Track 1 ACOs that wanted to remain in Track 1 for another agreement period to gain additional experience. CMS also streamlined the process for ACO beneficiaries to opt-out of data sharing.

Instead of the ACO handling the process of providing data opt-out, which had been cumbersome, now the ACO will be required to post a notice at the point of care advising their patients to call Medicare directly to handle the opt-out process. This will remove a lot of administrative burden. While we were pleased with some of the final provisions, we believe the agency could have done more in the final rule to incentivize participation in the MSSP, such as expanding the ability of ACOs in all tracks to apply for waivers from certain Medicare requirements.

HCB News: CMS seems anxious to push MSSP participants toward signing up for a risk-bearing track. Do you think the health care industry as a whole is ready to transition into risk-bearing arrangements?

AMGA: Despite the recent push from CMS and others in the Washington health care policy sphere, most evidence points to health care providers not being ready to assume risk in their operations. Currently, only three ACOs are participating in the risk bearing Track 2 of the MSSP. The uncertainty surrounding integral parts of the program, such as risk-adjustment and beneficiary attribution, and the lack of assurances that these uncertainties will be adequately addressed, have made many providers hesitant to commit to assuming risk in the MSSP.

HCB News: Do you think the new Track 3 finalized in the regulations will attract participants?

AMGA: Track 3 will offer some ACOs that are very confident in their ability to manage risk the ability to share in up to 75% of their savings with Medicare, while taking commensurate risk. In exchange for this level of risk, CMS is providing Track 3 ACOs a prospectively assigned patient population, so they will know exactly which of their beneficiaries are in the ACO, which will offer a huge advantage in managing their care.

Track 3 ACOs can also apply for a waiver from the 3 day hospital stay requirement for skilled nursing facility admissions, when it’s clinically appropriate to do so. We think this particular waiver, among others, should have been extended to all ACOs, since all ACOs are taking on significant risk in establishing their programs, but CMS chose a very narrow path by offering it only to Track 3 ACOs. It remains to be seen what the appetite among medical groups will be for Track 3.

HCB News: Why do you think CMS should have expanded the use of waivers in the MSSP more broadly, outside of the skilled nursing facility 3-day hospital stay requirement in Track 3?

AMGA: The proposed rule discussed the possibility of waivers for the skilled nursing facility 3-day rule, certain Medicare telemedicine billing requirements, the homebound requirement under the home health benefit, and referrals to post-acute care settings. The agency solicited stakeholder feedback on all of these, and AMGA urged the expansion of their use across all ACO tracks, yet the agency chose a very narrow application of them in the final rule, as we mentioned previously.

AMGA believes that all Medicare patients who are attributed to ACOs should have access to these benefit design changes that would permit clinical decision making to appropriately inform the health care they receive. AMGA also believes that risk-taking is inherently a part of participating in ACOs, no matter what track they are in. The investments necessary to participate in the program, at any level, are considerable and represent significant financial risk. More work must be done to extend the ability of all ACOs to incorporate waivers.

HCB News: AMGA has long been concerned about the beneficiary attribution problems in the MSSP program. Did the final rule do anything to improve the situation?

AMGA: Despite asking for stakeholder input in the proposed rule, CMS elected not to make any changes to beneficiary attribution in its final rule. AMGA, along with other stakeholders, asked them to pursue voluntary alignment for ACO beneficiaries but CMS stated a desire for additional testing of any changes to its methodology in the Pioneer ACO program before making any decision.

The agency plans to revisit the possibility during the 2017 Medicare Physician Fee Schedule rulemaking process, more than a year from now. This issue has long been problematic because it’s difficult, at best, to manage a population of patients without knowing exactly who your patients are. Ideally, Medicare beneficiaries would not only select a primary care provider, but also select an ACO for their complete care needs. That would truly measure how care is being delivered in an ACO.

HCB News: Another issue of concern for ACOs in the MSSP is the benchmarking process. Do you think that the modifications to the benchmarking process outlined in the final rule will help some ACOs?

AMGA: In the final rule, CMS finalized a policy that will equally weight each benchmark year, and will make an adjustment to account for the average per capita amount of savings generated during the ACOs’ previous agreement period. This should help some ACOs that have had difficulty exceeding their minimum savings rate because they are already very efficient at what they do.

AMGA advocated for CMS to provide a way to account for regional expenditures in the benchmarking process, as well. Many of our member medical groups have told us that a regional component in the benchmark would help them achieve shared savings. CMS plans to examine this issue in greater detail, and states that it will be the subject of a separate rulemaking process this summer.

HCB News: The Centers for Medicare and Medicaid Innovation (CMMI) has recently announced the “Next Generation ACO” demonstration project. What are the goals of this demonstration project?

AMGA: The Next Generation ACO Model is intended to target experienced, high-performing ACOs and test the role that strong incentives to take risk may play in improving the ACO model. These high performing ACOs also will have the opportunity to earn higher savings to incentivize their participation in the demonstration. CMMI also is permitting risk scores to go up by 3%, if necessary, to more accurately reflect the resources utilized to treat beneficiary in these ACOs.

In the MSSP, risk scores can only remain frozen in place or go down, which has been an area of concern. Beneficiaries will also be prospectively aligned with the ACOs in this model. CMMI is recruiting 15-20 ACOs to participate, so the project will be limited in scope, but CMMI hopes this project will help them learn what combination of factors will help ACOs and the Medicare program succeed.