Accountable Care Organizations

The Centers for Medicare & Medicaid Services (CMS) has finalized a major restructuring of the Medicare Shared Savings Program, dubbed “Pathways to Success.”  According to CMS, the program changes “are designed to increase savings for the Trust Funds and mitigate losses, reduce gaming opportunities, and promote regulatory flexibility and free-market principles.”  Most notably, CMS is accelerating the schedule for accountable care organizations (ACOs) to transition to two-sided risk models, under which the ACO is accountable for repaying shared losses in addition to qualifying for shared savings bonus payments.

By way of background, the Shared Savings Program is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form ACOs to provide cost-effective, coordinated care to Medicare beneficiaries.  The ACO agrees to be accountable for the quality and cost of the assigned Medicare fee-for-service beneficiary population.  The program has different “tracks” with varying frameworks for sharing savings or liability for losses depending on how spending compares to a benchmark.

Under the final rule, a participating ACO must select one of the following two tracks:
Continue Reading CMS Restructures Medicare Shared Savings Program to Encourage Transition to Performance-based Risk

The Centers for Medicare & Medicaid Services (CMS) is proposing a “new direction” for the Medicare Shared Savings Program, with changes to Medicare accountable care organization (ACO) requirements designed to increase Medicare savings and reduce “gaming opportunities.”  In a press release announcing the “Pathways to Success” redesign, CMS Administrator Seema Verma asserts that “after

The Medicare Payment Advisory Commission (MedPAC) has released its annual report to Congress on “Medicare and the Health Care Delivery System.” This year’s report includes recommendations for changes to emergency department services policies, along with analyses of potential changes that would impact physicians, medical equipment suppliers, post-acute care providers, and others.  Highlights include the following:

CMS has just put on display an interim final rule with comment period to establish special policies to assess the performance year 2017 financial and quality performance of Medicare Shared Savings Program accountable care organizations (ACOs) affected by extreme and uncontrollable circumstances, such as Hurricanes Harvey, Irma, and Maria and the California wildfires.  CMS is

The OIG has examined the results of the first three years of the Medicare Shared Savings Program, under which accountable care organizations (ACOs) coordinate care to reduce Medicare costs and improve quality of care. The OIG reports that 428 participating ACOs serving 9.7 million beneficiaries saved almost $1 billion in net Medicare spending while generally

CMS is soliciting applications for 2018 Next Generation ACOs, an Innovation Center initiative intended to promote Medicare quality improvement and care coordination. Letters of intent are due May 4, 2017. CMS is holding a series of calls to discuss the model and the application process, including the following:

In the waning days of the Obama Administration, the Centers for Medicare & Medicaid Services (CMS) has unveiled a lengthy and complex final rule to establish mandatory Medicare bundled payment programs for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) procedures furnished in designated geographic areas.  The rule also includes provisions to promote the use of cardiac rehabilitation services, refine current Comprehensive Care for Joint Replacement Model (CJR) rules, and integrate bundled payment programs into the new physician Quality Payment Program. The 1,606-page advance version of the rule was released on December 20, 2016; the official version is scheduled to be published January 3, 2017.

Note that President-elect Donald Trump’s designee for Secretary of Health and Human Services, Rep. Tom Price, M.D., has been highly critical of the proposed version of the rule published in August 2016, and has called on the CMS Center for Medicare and Medicaid Innovation (CMMI) to “stop experimenting with Americans’ health, and cease all current and future planned mandatory initiatives within the CMMI.” It is therefore uncertain whether all provisions of the final rule will actually be implemented as CMS currently envisions.  Nevertheless, impacted providers need to be prepared for potentially significant changes.

Mandatory Episode Payment Models for Cardiac Care, Hip/Femur Fractures

The final rule establishes new “episode payment models” (EPMs) that seek to “advance CMS’ goal of improving the efficiency and quality of care for Medicare beneficiaries and encourage hospitals, physicians, and post-acute care providers to work together to improve the coordination of care from the initial hospitalization through recovery.” CMS estimates that the EPMs will save $159 million during the duration of the program (July 1, 2017 through December 31, 2021).

CMS will “test” the EPMs beginning July 1, 2017 and ending December 31, 2021. CMS has selected 98 metropolitan statistical areas (MSAs) for the CABG and AMI EPMs, and will implement the SHFFT model in the same 67 MSAs where the CJR program is already underway. Acute care hospitals in these areas will participate in the models if they are paid under the Inpatient Prospective Payment System (IPPS) and are not concurrently participating in Models 2, 3, or 4 of the Innovation Center’s Bundled Payment for Care Improvement (BPCI) initiative for AMI, CABG, or SHFFT episodes. CMS estimates that approximately 1,120 hospitals will participate in the AMI and CABG models, and 860 hospitals will participate in the SHFFT model.

Under the final rule, an AMI, CABG, or SHFFT model episode will begin with an inpatient admission to an “anchor hospital” for the following specified Medicare Severity-Diagnosis Related Groups (MS-DRG):
Continue Reading CMS Issues Final Mandatory Episode Payment Models for Cardiac and Orthopedic Cases, Plus New Cardiac Rehabilitation Incentive Payment Model and CJR Program Refinements

The CMS Center for Medicare & Medicaid Innovation (CMMI) continues to launch initiatives to test ways to improve the quality of health care while controlling cost, despite an uncertain fate under the future Trump Administration and Republican-controlled Congress.

Specifically, two new CMMI Beneficiary Engagement and Incentives (BEI) Models seek to promote “shared decision making,” which

In order to improve “clinician engagement” and minimize administrative burdens, CMS has announced an 18-month pilot program to reduce medical review audits for participants in selected Advanced Alternative Payment Models (Advanced APMs), beginning January 1, 2017. Under this program, CMS will direct Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), and the Supplemental Medical Review

The Centers for Medicare & Medicaid Services (CMS) has announced proposals for three new “episode payment models” that, like the Comprehensive Care for Joint Replacement (CJR) model, would mandate provider participation in selected geographic areas. The episodes included in these payment models would address care for heart attacks, coronary artery bypass graft, and surgical hip/femur fracture treatment (excluding lower-extremity joint replacement). The performance period for these proposed episode payment models would begin July 1, 2017, giving hospitals and other providers a very short amount of time to prepare for these new payment methods. Comments are due October 3, 2016. Reed Smith is available to assist clients with preparation of comments or questions related to the proposed rule.
Continue Reading CMS Proposes Three New “Episode Payment Models” for Cardiac Care, Hip/Femur Fracture Cases, Plus Changes to CJR Model

On July 25, 2016, CMS announced ambitious, multi-pronged plans to expand mandatory Medicare coordinated care/bundled payment programs, promote the use of cardiac rehabilitation services, refine current Comprehensive Care for Joint Replacement Model (CJR) rules, and integrate bundled payment programs into the upcoming Medicare physician quality/payment framework. The proposed “Advancing Care Coordination through Episode Payment Model” rule is part of the Administration’s efforts to move the Medicare system away from fee-for-service (FFS) payments and towards alternative payment models that reward quality of care rather than volume of services.
Continue Reading CMS Unveils New Mandatory Medicare Bundled Payment Models for Cardiac & Hip Fracture Cases, Plus Proposed Refinements to CJR Program

CMS has published a final rule that revises the methodology CMS uses to measure the performance of accountable care organizations (ACOs) in the Medicare Shared Savings Program. According to CMS, the changes are intended to encourage participation in the MSSP, under which more than 430 ACOs in 49 states and the District of Columbia currently

On March 3, CMS is hosting a “listening session” to receive feedback on proposed changes to the Medicare Shared Savings Program benchmarking methodology published on February 3, 2016. In particular, CMS invites comments on provisions addressing:

  • Incorporation of regional fee-for-service expenditures into the methodology for resetting accountable care organizations’ (ACO) historical benchmark;
  • Adjustments to an

On February 9, 2016, the Obama Administration released its proposed fiscal year (FY) 2017 budget, which contains significant Medicare and Medicaid reimbursement and program integrity legislative proposals – including $419 billion in Medicare savings over 10 years. These proposed policy changes would require action by Congress, and Republican Congressional leaders have already voiced general

On February 3, 2016, CMS published a proposed rule that would revise the methodology CMS uses to measure the performance of accountable care organizations (ACOs) in the Medicare Shared Savings Program (Shared Savings Program) in order to encourage participation in the program.  In particular, the proposed rule would modify the methodology CMS uses to reset

The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) have finalized a rule designed to “remove legal and regulatory barriers that can impede care coordination in furtherance of the Shared Savings Program” and “reduce burden on ACOs, ACO participants, and ACO providers/suppliers.”  Specifically, the rule allows ACOs, ACO participants, and ACO providers/suppliers to seek to comply with one or more specified waivers so that they have assurance that participating in certain arrangements would not subject them to liability under the physician self-referral law (Stark Law), federal anti-kickback statute, or the beneficiary inducements civil monetary penalties (CMP) law provision.  According to CMS, the waivers “are critical to providing stakeholders with flexibility necessary for innovative care redesign.”
Continue Reading CMS/OIG Finalize Fraud Authority Waivers for Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP)