MSSP 2018 Final Rule

Pathways to Success – Review of Key Rulings with Expert Insight

January 2019

Pulse8 is privileged to bring you a summary of key MSSP program changes to take effect in July of 2019. The rule changes accelerate the movement to value-based care by requiring new ACOs to transition to downside risk after 2 years (3 years for low-revenue ACOs) in upside-only revenue sharing.

Bullet-Point Key Changes

? New ACOs will be required to take on risk in the third year of their contract.

o Under current rules, ACOs would be allowed to stay in savings-only contracts for up to 6 years.

o Renewing ACOs will have up to one year in upside-only risk-sharing once their current contract expires.

o ACOs will be required to progress gradually into higher risk-sharing levels (see Figure 1).

? Downside risk-sharing rates will start at 30% (capped at 2% of revenue or 1% of total benchmark)

? Shared savings rates will start at 40%

? Shared savings and risk-sharing rates max out at 75% in the ENHANCED track

? Risk scores increases will be capped at 3%.

o Under current rules, risk scores would only increase for a beneficiary based on demographic scores rather than true burden of illness.

o The risk score increase is capped at 3% over the base year across the entire 5-year contract. This cap is applied after renormalizing the risk (see Figure 2).

o Unlike the Next Gen ACO model, there will be no floor on risk adjustment decreases.

? Agreement periods increase from 3 years to 5 years.

o Longer agreement periods will allow for greater predictability for ACOs.

o Benchmarks will be based on an aggregation of the 3 years of experience prior to the agreement period.

o Benchmarks will utilize regional FFS expenditures in the first agreement period.

Pathways to Success: Participation Options

Under the revised rules, ACOs entering into a new agreement period will have two tracks from which to choose. The risk-sharing rates are summarized in Figure 1. The ENHANCED track has only one option with the highest risk-sharing rates, while the BASIC track has five levels with progressively higher risk-sharing rates. The options available to an ACO will be determined by their current situation:

? ACOs with prior experience in a CMS program with downside risk are required to choose either the ENHANCED track or BASIC Level E.

? Renewing ACOs with no prior experience in a CMS program with downside risk can choose any option except BASIC Level A. This means they will have at most one year with no downside risk.

? New ACOs with no prior experience in a CMS program with downside risk can choose to start at any level.  

? ACOs in the BASIC track will automatically progress to the next level each year with one exception: Low Revenue ACOs have the option to stay in Level B for an extra year but will then be required to jump to Level E in the subsequent year. Low Revenue ACOs are defined as ACOs whose revenue accounts for less than 35% of the total claim cost for their beneficiaries.

? ACOs may complete their current agreement before transitioning to the new model.

Figure 1: MSSP “Pathways to Success” Options

Pulse8 Insight: Robust programs to monitor and manage risk adjustment and claim costs take time to establish. The time is now to develop these programs so ACOs can maximize their chances at success in the new model. Even a modest 1% increase in risk (or decrease in costs) would amount to an increase in shared savings revenue of $1 million for the average ACO based on 2017 results. (Average benchmark of $900 per beneficiary per month across 20,000 beneficiaries at 50% shared savings rate).

Risk Adjustment Revisions

Under the current rule, continuously enrolled beneficiaries would only increase in risk score based on changes in their demographic score rather than their true burden of illness. ACOs were not being credited for the incremental costs of caring for new conditions that surfaced after the base years. Under the new rule, risk scores are recalculated each year based on the full HCC risk of each beneficiary. To mitigate overcompensation due solely to higher levels of coding rather than actual deterioration of health status, CMS is capping the change in risk at 3%. While CMS originally proposed a 3% floor on downward risk changes, they removed the floor in the final rule.

Pulse8 Insight: As stated above, risk adjustment programs take time to establish within an organization. An effective program will include continually refreshed processes in the areas of provider engagement and education, HCC gap identification, and risk adjustment monitoring. And while an ideal program will take years to establish, simple programs can be set up quickly to make an immediate impact.

? Ensure providers understand the importance of documenting all chronic conditions when possible during every visit.

? Ensure coders are coding all conditions in an encounter.

? Establish monitoring programs to track gaps in documentation or coding to allow for targeted interventions.

Another important point to consider is how the 3% cap will interact with the renormalization process. This will have an impact on how an ACO should be monitoring their risk scores.

Figure 2: Risk Score Increase Example

? (a) represents the raw risk score calculated with the applicable model for the given year. Note that the Base Year and the Payment Year may be calculated using different CMS HCC models.

? (b) represents the national average risk scores for the assignable FFS population.

? (c) represents the renormalized risk score for the ACO calculated by dividing (a) by (b)

? Note that although the ACO’s raw risk score increased by 6%, the renormalized score only increased by 2.9% so they did not hit the cap.  

? As more Medicare beneficiaries are involved in programs that incentivize quality HCC coding, it will become more difficult to maintain a relatively higher risk score.

CMS Continues Pressure Towards Value-Based Care

There has been little indication that the transition to value-based care is slowing down. Rather, with this rule, CMS is increasing the speed of the transition. While, in theory most agree that value-based care is an appropriate step to lower the cost of healthcare in the US, it will only be successful if we arm providers with the tools required for that success. Far too many providers are traveling this path without even basic tools to monitor risk adjustment and patient costs. If CMS maintains the current trajectory, these tools will soon be necessary for the survival of an ACO.