Updates for MSSP and Next Generation ACOs during COVID-19
The Medicare Shared Savings Program (MSSP) and Next Generation (Next Gen) accountable care organisations (ACOs) share risk between providers and Medicare. Providers who manage their populations well can earn extra money through shared savings, while providers who are unable to lower costs share in losses with the Centers for Medicare & Medicaid Services (CMS). Some providers hold this risk in their captives.
The COVID-19 pandemic has shifted these providers’ priorities from management to survival, which has large potential consequences for their performance in the programme. CMS says it has implemented several flexibilities and adjustments to its value-based and quality payment programmes, including MSSP and Next Gen, to help participants weather these trying times and the potential negative effects on their performance.
“Risk adjustments for MSSP and Next Gen ACO participants may be helpful, but they are not expected to completely account for the impact of COVID-19.”
The overall effect of the adjustments made by the Center for Medicare and Medicaid Innovation (CMMI) and CMS is uncertain. Some adjustments are certainly designed to reduce the risk to providers, while some are intended to keep the incentives at play and keep risk on the table.
The net effect is a reduction in the potential downside, but it comes with a reduction in the potential upside as well. Providers holding risk in captives should be tracking potential implications of these programme adjustments.
Regional and trend adjustments to the benchmark
For MSSP, the trend is set retrospectively. This is an inherent mechanism to account for events that affect the healthcare system as a whole. A Milliman report from April 2020, titled “Estimating the impact of COVID-19 on healthcare costs in 2020: Key factors of the cost trajectory”, predicted that total healthcare expenditures will indeed be lower in 2020 than if COVID-19 hadn’t occurred.
Therefore, MSSP’s trend methodology, which automatically adjusts for this decrease in health spending, will keep MSSP ACOs at risk for losses. It is the differential impact of ACOs that is important to consider when thinking about the outstanding risk of COVID-19.
The Next Gen programme traditionally uses prospectively set trends for developing benchmarks. Without any changes to that policy, a greater proportion of Next Gen ACOs would earn shared savings at the end of the year if the decrease in total health expenditures for 2020 came to fruition. CMS announced on June 2, 2020, however, that it would retrospectively update trends for the Next Gen programme to account for this difference, ultimately increasing risk to these ACOs.
Loss mitigation and saving caps
The CMS Extreme and Uncontrollable Circumstances Policy will be used to help mitigate losses for MSSP and Next Gen ACO participants with a reduction in incurred losses by (i) the percentage of months in the performance year affected by the public health emergency (PHE); and (ii) the percentage of an ACO’s beneficiaries who reside in an area affected by the circumstances.
CMS announced in April that 100 percent of beneficiaries are considered to reside in an “affected area” given the national impact of COVID-19. Therefore, losses will be reduced by the full percentage of months affected by the PHE during the performance year.
CMS has determined that the start of the PHE was January 2020 and is currently extended through July 21, 2020, although it could be extended further. Therefore, losses incurred by MSSP and Next Gen ACO participants will be reduced by at least 58 percent (seven out of 12 months) but could be reduced even further or entirely if the PHE is extended.
Additionally, CMS will remove part A and B expenditures for MSSP and Next Gen ACO beneficiaries incurred during a COVID-19 related episodes from the performance year expenditures. They will also remove them from future benchmark expenditures, updates to trend rates, and revenue calculations for determining loss-sharing limits for certain ACOs. This policy acts to decrease total risk to ACOs. Should the PHE last the entire year, this policy would eliminate all risk. As of now, it removes a significant portion of it.
In each performance year, ACOs receive risk adjustments to account for differences between the benchmark and performance period. This risk adjustment accounts for changes in an ACO’s patient mix as well as changes in the morbidity of those patients. These built-in risk adjustments will be helpful in limiting the impact of the COVID-19 pandemic for each ACO by accounting for some of the COVID-19 beneficiaries that a participant treated during the pandemic.
Additionally, although risk adjustment scores provide some help to participants, they don’t account entirely for the total costs of care incurred for risk-adjusted patients. Risk adjustment is also capped for MSSP and Next Gen ACO participants. #
Similarly, since the entire country has been affected by the pandemic, it’s unlikely that any individual participant will experience significantly different impacts from risk adjustments. As such, risk adjustments for MSSP and Next Gen ACO participants may be helpful, but they are not expected to completely account for the impact of COVID-19. It is therefore likely that the previously noted trend adjustments and loss mitigations will be more impactful in reducing risk resulting from the pandemic.
As part of the MSSP, participants are scored on a series of quality metrics, and their quality score determines the amount of financial risk to which they are exposed. Under the Extreme And Uncontrollable Circumstances Policy applied due to COVID-19, CMS is implementing an adjustment to participants’ quality scores.
If an ACO is unable to report on quality metrics due to the PHE, it will receive a score equal to the average MSSP ACO quality score for the performance year. If the participant can completely and accurately submit its quality measures, CMS will count the higher of the ACO’s individual performance or the average MSSP ACO quality score for the performance year.
The average MSSP ACO quality score therefore acts as a floor below which no MSSP ACO will score for the performance year during the PHE.
In addition, the CMS Web Interface quality measure reporting deadline for MSSP and Next Gen ACOs was extended from March 31 to April 30, 2020, and the 2019 quality audit for Next Gen ACO participants was cancelled.
These quality measure policies, while not directly targeted at losses, can help ACOs mitigate additional losses from the COVID-19 outbreak, as the higher the quality score reported by an ACO, the lower the percentage of shared losses the ACO is responsible for (with variations by track).
Extension of programmes and other changes
In addition to the previously noted changes to MSSP and Next Gen ACOs, participants in MSSP can continue in their current programmes through December 2021; the Next Gen ACO programme has been extended through the same time-period. These changes allow participants in both programmes to remain in a programme they are familiar with, rather than apply for and start a new programme with new parameters during the PHE.
MSSP participants in the BASIC Track glide path can also choose to remain in their current level of participation for performance year 2021, avoiding increased levels of risk for an additional year. Eligible ACOs will be able voluntarily to elect to extend their agreements and/or maintain their current BASIC Track level for performance year 2021 starting June 18, 2020. The anticipated deadline for making these elections is September 22, 2020.
Further, CMS has implemented a 5 percent cap on upside saving potential for Next Gen ACO participants. This is a significant potential reduction in the savings that an ACO could earn in the programme. This update is likely an attempt by CMS to reduce its responsibilities in such an uncertain environment.
Additionally, CMS has removed the financial guarantee requirement for 2020, through which Next Gen ACOs would have been required to have a financial guarantee in place that is enough to cover financial losses.
Finally, services provided virtually, through telehealth, virtual check-ins, e-visits or telephone, and remote evaluation of video/images, were added to the definition of primary care services used in the MSSP assignment methodology, effective January 1, 2020, and for any subsequent performance year that starts during the PHE.
All these changes taken together result in a mixed bag for ACOs. With upside and downside both reduced significantly, and the benchmark trends retrospectively set, ACOs are still incentivised to perform in the programme, but with reduced stakes. CMS took a balanced approach.
Chris Coulter is vice president and actuary at Archway Health Archway Health. He can be contacted at: firstname.lastname@example.org