CMS Finalizes ACO Program’s Pathways to Success

The Centers for Medicare & Medicaid Services (CMS) recently issued a final rule that dramatically redesigns and sets a new direction for Medicare accountable care organizations (ACOs).

To ensure the ACO program delivers the most value, Pathways to Success is designed to advance five goals: accountability, competition, engagement, integrity and quality.

Most Medicare ACOs currently do not face financial consequences when costs increase, but this will change under Pathways to Success. Having more ACOs take on real risk, while offering them the incentives and flexibility they need to coordinate care and innovate, is an important step forward in how Medicare pays for value. As a result of these changes, the projected savings to Medicare total $2.9 billion over 10 years.

Pathways to Success will overhaul the current program to require more accountability in ACOs. Changes will include:

  • Accountability and Competition: The final rule reduces the amount of time that an ACO can remain in the program without taking accountability for healthcare spending from six years to two years for new ACOs and three years for new low revenue (physician-led) ACOs, including some rural ACOs. The rule also strengthens incentives by providing higher shared savings rates as ACOs transition and accept greater levels of risk.
  • Quality: To increase flexibility for ACOs taking on risk, the program expands access to high-quality telehealth services that are convenient for patients, including telehealth services provided at a patient’s place of residence.
  • Beneficiary Engagement: It promotes beneficiary engagement and improved health outcomes by allowing ACOs to offer new incentive payments to beneficiaries for taking steps to achieve good health, such as obtaining primary care services and necessary follow-up care. In addition, this rule requires ACOs to provide beneficiaries with a written explanation in person, via email or through a patient portal of what it means to be in an ACO to put patients in the driver seat.
  • Integrity: This rule establishes rigorous benchmarks by incorporating factors from regional Medicare spending to establish an ACO’s benchmark during all agreement periods, providing a more accurate point of comparison for evaluating ACO performance. In addition, ACOs that terminate their participation will be accountable for prorated shared losses.

In connection with the Medicare shared savings program redesign, CMS will offer an application cycle for a special one-time new ACO agreement period start date of July 1, 2019. Ninety percent of eligible ACOs with participation agreements expiring on Dec. 31, 2018, have elected to extend their agreement for six months, so the option to renew agreements under the new policies and continue to participate in the program uninterrupted does exist.

The notice of intent to apply will be available Jan. 2 through 18, 2019. The application submission due dates are posted on the Medicare shared savings program website. See the Application Types & Process webpage for eligibility requirements, key timelines and detailed instructions on the submission process.

For more information, click here and here.

Questions should be directed to Amanda Newell at THA, 615-401-7441.