CMS Proposes New ACO Rules

Among the dozen revisions to the Medicare Shared Savings Program (MSSP) being considered includes one that could bring some relief to accountable care organizations (ACOs) facing penalties. CMS proposed that ACOs with poor performance would have 3 extra years before they could be punished.

The rule would affect the more than 330 ACOs providing care for 5 million individuals through the MSSP. According to Kaiser Health Network, the revision is intended to entice the formation of new ACOs and keep participating ACOs in the program.

“This proposed rule is part of our continued commitment to rewarding value and care coordination—rather than volume and care duplication,” CMS Administrator Marilyn Tavenner said in a statement. "We look forward to partnering with providers and stakeholders to continuously refine and improve the Medicare Shared Savings program.”

The MSSP currently has 2 options: Track 1 is a one-sided shared savings only model for a 3-year agreement period, and Track 2 is the two-sided shared savings/losses model for a 3-year agreement period. ACOs participating in Track 1 must switch to Track 2 after the initial 3 years.

However, ACOs can now receive an additional 3 years, for a total of 6 years, before they face financial penalties by renewing their agreement under Track 1. There is a downside to choosing this option: ACOs that choose to receive the extra 3 years before being penalized for poor performance will not be entitled to as much of the shared savings. Instead of being able to keep up to 50% of the money the ACO saved Medicare, participants that delay penalties for the 6 years will only be able to keep up to 40% of savings.

Furthermore, CMS is proposing a Track 3 that would allow participants to keep up to 75% of shared savings. The ACOs in the Pioneer Model, which ends in 2016, would move over to the new model, which has similar rules.