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Navvis Summary of August 8, 2018 CMS MSSP Proposed Rule

  By: Sheila Fusé, Navvis Senior Vice President of Policy & Payment Models   On August 9, 2018, the Centers for Medicare & Medicaid Services (CMS) issued… Read more »

Thought Leadership August 10, 2018

Navvis Summary of August 8, 2018 CMS MSSP Proposed Rule


By: Sheila Fusé, Navvis Senior Vice President of Policy & Payment Models


On August 9, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a widely anticipated proposed rule to the Medicare Shared Savings Program (MSSP). CMS is proposing a new direction referred to as “Pathways to Success.”

The goal of these changes is to encourage ACOs to accelerate the transition to two-sided risk models. In our view, these rules are significant changes that will have wide impact on healthcare organizations managing Medicare lives.

Below is our high-level analysis based on our overnight preliminary read of the rule. Navvis has additional analysis and insights on the MSSP rule. If you are interested in learning more, please complete the form below.

Summary of CMS Costs and Benefits 

  1. Estimated Net Savings to the Program: CMS projects proposed changes to the regional adjustment and risk adjustment factors to the benchmark, coupled with an accelerated transition to two-sided risk models, will result in $2.24 billion in federal savings over 10 years.
  2. Impact on Program Participation: CMS estimates 109 ACOs will drop out of the program as a result of the proposed changes.
  3. Improvements to the Benchmark: CMS proposes to use regional adjustment factors to the benchmark in the first year of an ACO’s first contract period. It also proposes to allow the HCC risk score for selected continuously attributed beneficiary to change each year based on health status as well as a national-regional trend factor.
  4. Increased Program Flexibility: CMS expands access to waivers for telehealth, SNF 3-day stay, beneficiary incentives for ACOs that meet certain criteria and offers the choice of either prospective or retrospective beneficiary alignment.

Restructuring of the Participation Options

The proposed rule significantly restructures the MSSP’s participation options. For new ACOs tracks 1, 1+ and Track 2 are consolidated into the “BASIC” option (described in detail below). Track 3 has been renamed the “ENHANCED” option.

These new participation options will be available for start dates beginning on 7/1/19. New contracts will be for a period of at least five years, increased from three years. ACOs that are participating in the current tracks will be allowed to finish out their contract term before transitioning into the applicable new model.

Detailed Analysis

  1. Program timing: CMS proposes a six-month delay for new entrants (2019 enrollees) enabling a 7/1/19 off cycle start or 1/1/2020 followed by annual start dates in January for subsequent years. For ACOs who are ending their first or second three-year agreement on 12/31/18, CMS is offering a six-month extension.
  2. Proposed BASIC Track: Over the five-year contact period, the participants in the BASIC option will face increasing risk. Each year of the five-year contact period is assigned a Level A-E which denotes the risk level the ACO assumes. New ACOs that start on 7/1/19 will be allowed to participate in upside only Levels for the first 2.5 years of the program. New ACOs that wait to start until 1/1/20 will have only two risk free years (Levels A – B).
  3. Proposed ENHANCED Track: Under the Proposed Rule, the existing MSSP Track 3 model will be renamed the ENHANCED Track. If an ACO meets the “Low Revenue” criteria defined in the proposed rule it will transition into the ENHANCED Track after its second five-year contract period. If the ACO meets the “High Revenue” criteria, it will transition into the ENHANCED Track at the end of its first five-year contract period.
  4. Low Revenue and Inexperienced ACOs: The proposed rule provides additional flexibility and greatly improved terms to “Low Revenue” and “Inexperienced” ACOs.
  5. Proposed Beneficiary Assignment Changes: Participants have the choice of either prospective or retrospective assignment. If an ACO wishes to change assignment methodologies it will have the opportunity to make an annual election.
  6. Proposed ACO Incentives/Enhancements: As required by the Balanced Budget Act of 2018 and the 21stCentury Cures Act, CMS proposes a number of participation incentives or enhancements that are currently only available in the Next Gen ACO. These include:
  • Telehealth Waiver
  • SNF 3-Day Rule
  • Beneficiary Incentive Waiver
  1. Proposed MSR/MLR: Similar to the currently available MSSP models, upside only ACOs are subject to a population based variable MSR. Risk bearing ACOs may choose a symmetrical MSR/MLR.Prior to entering a risk track, an ACO will have the opportunity to select its risk track. However, once it makes an election the MSR/MLR is set for the remainder of the contract period.
  2. Proposed Changes MSSP Benchmarking: CMS proposes to factor in changes in health status for the continuously assigned population and accelerate the use of regional factors in the benchmark.
  3. MIPS/MACRAImpact: For 7/1/19 starters, participating in BASIC option will still count as a MIPS APM and the ENHANCED model will quality as an advanced AMP.
  4. Preventing “Gaming” of the System: The proposed rule takes a number of steps to “protect the program”.

Please fill out the form below for more insights and analysis on this milestone CMS ruling.



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