The Medicare Shared Savings Program (MSSP) was conceived under the Affordable Care Act as a way to reduce Medicare spending without diminishing the quality of patient care. But the program hasn’t produced the expected savings since its launch in 2012, so the Trump Administration is proposing a dramatic makeover.
CMS Administrator Seema Verma recently proposed a new rule that would make it harder for accountable care organizations (ACOs)—the vehicles for participating in the MSSP—to realize the financial benefits of participating in the program without also taking on more financial risk. “We are proposing significant changes to increase quality for patients and drive toward program-wide savings,” Verma wrote in a Health Affairs blog post accompanying the announcement.
Reaction to Verma’s announcement so far has been mixed. The National Association of ACOs is strongly opposed, calling it “a significant setback for Medicare payment reform.” But the CEO of a private company active in the ACO field sees some benefits to the rule. If CMS adheres to its typical timetable for rule adoption, it would likely take effect late this year or in early 2019.
ACOs consist of hospitals, medical practices and/or other providers that band together to care for an assigned group of Medicare beneficiaries, with the goal of providing the care for less than what the government projects it would cost under Medicare’s fee-for-service program. ACOs that achieve the goal within Medicare’s quality standards share some of the savings with the government. Those whose costs exceed government benchmarks face financial penalties.
An ACO’s financial risk and reward varies according to which of the program’s three “tracks” it chooses. Track 1 ACOs receive a smaller share of any savings, but are not penalized for higher-than-projected costs. In contrast, tracks 2 and 3 ACOs keep a greater share of any savings they generate, but also face penalties if their costs exceed the government’s benchmarks.