CMS Modifies Policies, Timelines for Alternative Payment Models

Ken Terry

June 04, 2020

The Centers for Medicare & Medicaid Services (CMS) has announced a slew of new measures to help participants in its alternative payment models meet deadlines, cope with potential losses from the COVID-19 pandemic, and to prevent defections from the programs.

The latest changes, which are in line with similar moves CMS unveiled for the Medicare Shared Savings Program (MSSP) on April 30, are related to financial methodologies, quality reporting, and model timelines.

The biggest change is that the Next Generation ACO (Accountable Care Organization) Model program has been extended through December 2021. In addition, Next Generation ACOs will have their 2020 downside risk reduced. CMS will remove episodes of COVID-19 treatment from the calculation of those ACOs' losses and will cut their overall shared losses in proportion to the number of months for which the public health emergency exists.

In a news release, the National Association of Accountable Care Organizations (NAACOS) praised CMS for extending the Next Generation ACO model and for making changes to adjust for the pandemic. According to NAACOS, Next Gen ACOs collectively saved CMS $406 million in 2018 and $337 million in 2017, the 2 years for which data is available.

CMS also postponed the start date of its new Direct Contracting program by 3 months to April 1. The Primary Care First Program's serious illness component will also be delayed to the same date. The rest of that program will begin on Jan. 1 as scheduled.

CMS has also extended the Comprehensive ESRD Care Model until March 31; extended performance year 5 for the Comprehensive Care for Joint Replacement (CJR) Model through March; delayed the first performance period for Kidney Care Choices to April 1; and extended the Oncology Care Model through June 2022.

Several alternative payment programs received protection from losses that might be incurred because of the COVID-19 crisis.

The Bundled Payments for Care Improvement Advanced Model now allows participants to eliminate downside risk this year. For those who choose to retain two-sided risk, certain clinical episodes that include a COVID-19 diagnosis will be excluded from the financial reconciliation with CMS.

Participants in the Comprehensive ESRD Care Model will see their 2020 downside risk reduced in the same way that the Next Gen ACOs will.

For hospitals in the Comprehensive Care for Joint Replacement (CJR) Model, downside risk will be eliminated by capping actual episode payments at the target prices for admissions between Jan. 31, 2020 and the end of the public health emergency period.

For ACOs in the MSSP Track 1+ model, COVID-19 treatment episodes will be removed from the 2020 financial reconciliation with CMS. In addition, the MSSP "extreme and uncontrollable circumstances policy," which eliminates shared losses, will be applied for the duration of the public health emergency.

Because of the pandemic, CMS on April 30 modified its MSSP policies to:

  • Allow ACOs whose current agreement periods expire on Dec. 31, 2020 to extend their existing agreements by 1 year rather than have to switch to the newer risk-based contracts

  • Allow ACOs in any of the MSSP BASIC tracks to maintain their current level of participation for performance year 2021

  • Apply the program's extreme and uncontrollable circumstances policy to mitigate shared losses for the duration of the COVID-19 public health emergency

  • Adjust program calculations to mitigate the impact of COVID-19 on ACOs

  • Expand the definition of primary care services for determining Medicare beneficiary assignment to ACOs to include telehealth codes for virtual check-ins, e-visits, and telephonic communications.

NAACOS said in a press release that the interim final rule embodying these changes was a win for MSSP ACOs. However, the organization added, "We were disappointed to see there will be no application period in 2021 for new ACOs and hope CMS will be open to a partial 2021 performance year as the healthcare industry stabilizes."

Adjusting to Circumstances

In a June 3 blog post in Health Affairs, CMS Administrator Seema Verma said that, while the agency continues to support its alternative payment models, "the models must be adjustable to address the uniqueness of the current situation. That's why, in response to COVID-19, CMS is providing new flexibilities and adjustments to current and future…models to address the emergency."

Before the pandemic, CMS was trying to accelerate the drive toward value-based care. Now, Verma said, it is delaying implementation of new models and adjusting deadlines for existing ones "to give providers additional time to transition to value-based care."

In another Health Affairs blog post on May 30, health policy expert Robert Mechanic noted that large pandemic-related expenditures could affect ACOs' shared savings and lead to departures from the MSSP. Some of his colleagues, he pointed out, had recommended that Medicare suspend financial risk for Medicare alternative payment models due to the disruption of the US healthcare system created by COVID-19.

In Mechanic's view, the recent MSSP policy changes "are intended to provide some financial protections to ACOs while limiting the potential for windfall gains" in areas where health costs have decreased substantially because of a steep drop in non-COVID-19 care provision.

Mechanic concluded, "ACOs with substantial downside risk need to evaluate their own circumstances carefully, but on balance, the recent policy changes should give many ACOs confidence that the MSSP remains viable in the current year."

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