Medicare ACO Quality Measures Updates

On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) released the Final Rule for the 2025 Medicare Physician Fee Schedule (PFS), unveiling major updates to Medicare Accountable Care Organization (ACO) quality measures. These changes are part of CMS's ongoing commitment to improve healthcare quality, streamline reporting, and drive progress in health equity. Below, we break down the key aspects of these updates and their implications for ACOs.

Introduction of the APP Plus Quality Measure Set

Starting in the 2025 performance year, the Medicare Shared Savings Program (MSSP) will require ACOs to report under a new quality measure set called APP Plus. This set, initially consisting of six measures, will expand to eleven by 2028. APP Plus aligns closely with CMS’s Adult Universal Foundation quality measures, ensuring consistency across Medicare, Medicaid, and private insurance programs.

The goal of APP Plus is to simplify and unify quality reporting by focusing on high-impact measures that reflect care quality and patient outcomes. CMS anticipates that this alignment will help reduce reporting duplication for ACOs participating in multiple programs.

New Reporting Options and Incentives

The APP Plus quality measure set offers ACOs three primary reporting options:

1. Electronic Clinical Quality Measures (eCQMs) - Real-time data collection from electronic health records (EHRs) promotes accuracy and immediate feedback.
2. MIPS CQMs (Merit-based Incentive Payment System) - These offer a traditional quality reporting path.
3. Medicare CQMs - The newest addition, with a flat benchmarking methodology for certain measures to ensure comparability during the first two performance periods.

In addition, CMS has extended incentives for eCQM and MIPS CQM reporting, reinforcing its push for digital integration. By offering incentives, CMS encourages ACOs to transition more swiftly to eCQMs, capitalizing on the interoperability benefits and minimizing the need for manual reporting.

Flat Benchmarking for Medicare CQMs

In response to feedback about "topped-out" measures (those with high average performance across ACOs), CMS will implement a flat benchmarking methodology for Medicare CQMs during the initial years of APP Plus. This new approach is intended to address the challenges of differentiating performance on measures where most ACOs are already performing at a high level. Each year, CMS will specify which measures this policy applies to and the corresponding benchmarks.

Focus on Health Equity

CMS has placed a strong emphasis on health equity across its programs, including ACO quality measures. The APP Plus set includes measures that target healthcare disparities, aiming to improve access and outcomes for underserved and diverse populations. This focus supports CMS’s broader mission of creating an equitable healthcare system that addresses social determinants of health.

ACOs will be encouraged to adopt patient-centered approaches that consider the needs of marginalized communities, as these factors will be integral to quality performance scoring.

Enhanced Scoring for Outcome-Based Measures

The APP Plus scoring methodology is shifting towards outcome-based measures, focusing on metrics like chronic disease management, hospital readmissions, and preventive screenings. By emphasizing actual health improvements over process adherence, CMS is tying incentives to meaningful results that benefit patients.

This performance-based scoring structure means that ACOs achieving higher quality outcomes will have greater opportunities for shared savings, which align with CMS's objectives of fostering value-based care.

Reduced Administrative Burden with Digital Reporting

A core advantage of the APP Plus set is its encouragement of digital reporting through eCQMs. With real-time data capture directly from certified EHRs, this approach streamlines submissions and reduces administrative overhead. Automated data collection from EHRs not only minimizes manual data entry errors but also enables CMS to monitor and assess care quality in a more timely and accurate manner.

Simplified Reporting and Submission Adjustments

In an effort to make the reporting process more flexible, CMS finalized updates allowing for reporting adjustments if ACOs encounter data submission challenges with third-party intermediaries. ACOs can now request reweighting of their quality performance categories if issues arise that prevent data submission. This policy adjustment ensures that ACOs aren’t penalized for data access issues beyond their control, allowing them to focus on patient care.

Conclusion

CMS’s 2025 Medicare ACO quality measure updates through the APP Plus framework signify a transformative step toward value-based care. By focusing on streamlined digital reporting, health equity, and outcome-based performance, CMS is setting the stage for an improved, equitable, and efficient healthcare system. For ACOs, these changes bring reduced administrative complexity, more meaningful quality assessments, and stronger financial incentives tied directly to patient health outcomes.

As CMS continues to refine quality reporting, ACOs can expect additional measures and reporting enhancements in the coming years, making APP Plus a cornerstone of their performance management and quality improvement efforts.