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:
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