CMS Pathways to Success: Highlights of Final Rule Changes

By Sarah Moore

26 March 2019

Practical Analytic Approaches to Healthcare Challenges

On December 31st, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a final rule change to the current Medicare Shared Savings Program (MSSP) structure called “Pathways to Success”. While this rule looks to accomplish additional goals, the main focus is to transition Accountable Care Organizations (ACOs) into risk-bearing contracts sooner. The corresponding proposed rule was released on August 8, 2018, and more in-depth information from it can be found here. This post will highlight the key changes in the final rule from the proposed rule.

Amongst the various changes that occurred between the proposed rule and the final rule is the shared savings rates for some of the levels within the BASIC track. Levels A and B will have up to 40% shared savings rate instead of the originally proposed 25%, and Levels C and D will have up to a 50% shared savings rate instead of the proposed 30% and 40%, respectively.

Track progression for some scenarios also changed. Low revenue ACOs are now defined as those historically having ACO participants’ Parts A and B FFS expenditures under 35% of total FFS expenditures for the ACO’s assigned beneficiaries instead of 25%. New low revenue ACOs will have the option to stay in Level B for an extra year if they commit to then be in Level E for the rest of their agreement period. Additionally, high revenue ACOs who transitioned to Track 1+ in their current agreement period are eligible to remain in the BASIC track under Level E for an additional agreement period.

Another change that occurred with the final rule involves the benchmarking methodology. The final rule presents a 15% regional adjustment to ACOs with historic expenditures above the regional benchmark in order to help these ACOs slowly phase into the use of regional adjustment factors. This is a decreased factor from the proposed 25%. Additionally, the proposed rule presented benchmark changes during agreement periods due to a shift in risk scores of up to 3% in either direction. Under the final rule, the benchmark increase remains capped at 3%, whereas the benchmark decrease cap was removed.

In aggregate, CMS made numerous changes to the Pathways to Success between the proposed rule and final rule, many of which aid ACOs in the transition to more risk and new methodologies. More information regarding the final rule and the implications it could have on ACOs can be found here.

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