CMS Officials’ Smart, Principled Calculations Around the MSSP Are Paying Off

At a time when everything in healthcare policy is complex and challenging, the set of announcements around the Medicare Shared Savings Program (MSSP) published on Tuesday, Nov. 1, was interesting and potentially very important. As we reported on Tuesday after the news broke, senior officials at the Centers for Medicare & Medicaid Services (CMS) announced, in the context of the calendar year 2023 Physician Fee Schedule (PFS) final rule, that they were making several adjustments to the benchmarks embedded in the MSSP Program.

As we noted in our breaking-news report on Tuesday afternoon, “The changes will impact how the leaders of accountable care organizations (ACOs) participate in the program going forward. CMS officials explained their changes to the MSSP in a fact sheet posted to the agency’s website on Tuesday,” we wrote. In fact, the fact sheet began thus: “On November 01, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) final rule that includes changes to the Medicare Shared Savings Program (Shared Savings Program) to advance CMS’ overall value-based care strategy of growth, alignment, and equity. Through the changes we finalized,” CMS officials wrote, “we seek to reverse certain recent trends in the Shared Savings Program: in recent years growth in the number of beneficiaries assigned to ACOs in the Shared Savings Program has plateaued; higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks; and access to ACOs appears inequitable as shown by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts.”

What’s more, CMS officials wrote, “Several of the provisions in this final rule are expected to advance equity within the Shared Savings Program. Based on feedback from health care providers treating rural and underserved populations that they require upfront capital to make the necessary investments to succeed in accountable care and may also need additional time under a one-sided model before transitioning to performance-based risk, we are finalizing policies to advance shared savings payments (referred to as advance investment payments) to low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, that are new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and that serve underserved populations. These advance investment payments will increase when more beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS), are dually eligible for Medicare and Medicaid, live in areas with high deprivation (measured by the area deprivation index (ADI)), or a combination of those, are assigned to the ACO, and these funds will be available to address the social and other needs of people with Medicare. We are also finalizing other modifications to certain existing policies under the Shared Savings Program to support organizations new to accountable care by providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign their care processes to be successful under risk arrangements.”

What’s significant here is not only that Biden administration healthcare policy officials are shifting the emphasis in the MSSP program from what that emphasis had been under the Trump administration; they are doing it in a way that is combining something unprecedented—a focus on health equity as a principle driving all the alternative payment models being explored and expanded under CMS—with a new attitude towards providers, one intended to draw them in rather than to potentially make them revolt. As I had written in 2020, Seema Verma in 2019 and 2020 had become increasingly hectoring in her tone towards providers, insisting that they move forward quickly into two-sided risk, but her lecturing tone caused some associations to push back regularly, as association leaders representing ACOs, large multispecialty medical groups, and integrated health systems, warned her that pushing too hard, too fast, would only cause many of them to jump ship. And a very large portion of their grievance was around the intense push on Verma’s part to try to compel them into two-sided risk too fast relative to what they could support operationally and even financially.

Now, in fairness, Verma was looking at the numbers, which continue to signal alarm. Indeed, as we reported this spring, on March 28, CMS’s actuaries released their predictions on overall nationwide healthcare spending, projecting that the United States will be spending $6.8 trillion a year on healthcare by 2030, a whopping overall figure—though our percentage of gross domestic product will remain around 19.6 percent. No one with any rational perspective could find that $6.8 trillion figure comforting; and so Verma could be excused for raising cost alarms.

That said, Chiquita Brooks-LaSure and Elizabeth Fowler, J.D., Ph.D., head of the Center for Medicare and Medicaid Innovation, made it clear very early on—indeed, in the spring of 2021—that they were going to shift CMS’s focus towards collaboration with providers, rather than confrontation, and with health equity as an absolute guiding principle in how they would be shaping federal healthcare policy, most especially around all alternative payment models (APMs). Fowler made clear their intention to shift focus when she appeared before the members of NAACOS, the National Association of ACOs, on April 20; and then the two senior officials laid out their new vision of where healthcare policy at CMS was headed, in an Aug. 12, 2021 blog in Health Affairs online, entitled “Innovation At The Centers For Medicare And Medicaid Services: A Vision For The Next Ten Years.” They wrote that, ““After launching more than 50 alternative payment models that reward health care providers for delivering high-quality and cost-efficient care, the Innovation Center has learned a great deal and is ready to build a stronger and more sustainable path forward.”

And they have since then followed up that manifesto with a series of interim and final rules that show that they’re not only serious in their intentions, but are being extremely thoughtful in all the steps they’ve been taking to move Medicare forward, and under that umbrella, to move the MSSP and the other APM-based programs forward. As I wrote on Aug. 26, 2021, “So, yes: there’s a new sheriff in town, or rather, a whole new sheriff's posse. What’s clear is that Brooks-LaSure, Fowler, and their fellow officials at CMS and CMMI, have developed a strong, clear, conceptually consistent rationale for policy development in the APM space, and that they plan to follow through on that rationale, as they rationalize the value-based programs at CMS/CMMI.”

And now, over time, this new, principled, well-thought-through set of policy priorities is bearing fruit. As I wrote earlier today in my breaking-news report, the leaders of NAACOS, the Washington, D.C.-based National Association of ACOs, leaped to praise the final rule released today, with NAACOS president and CEO Clif Gaus, Sc.D., saying in a statement posted to that association’s website, that “Today’s finalized changes to Medicare’s largest ACO program bring a win to patients and will absolutely help providers deliver accountable care to more beneficiaries. NAACOS thanks the Centers for Medicare and Medicaid Services (CMS) for its leadership and following through on its promise to create a stronger Medicare program by improving accountable care models and speeding the movement toward value for all patients. On balance, we believe this final rule will grow participation in accountable care organizations, which have already generated billions of dollars of savings for our health system.”

To be sure, the praise from the NAACOS leaders was not unalloyed or unthinking; Gaus also wrote in his statement that “[W]e remain concerned with CMS’s use of a prospectively projected administrative growth factor for ACO benchmarks or their financial spending targets.” But what’s clear is that the contentious atmosphere that existed in 2019 and 2020 has dissipated, and associations like NAACOS are expressing clear support not only for the overall goals that the top CMS officials are putting out into the public; they also see a far more conciliatory spirit on the part of top CMS officials. Gaus and his fellow leaders have been particularly heartened that, as he stated in his statement on Tuesday, “CMS will: Give ACOs more time before being forced to take on financial risk, including allowing some up to seven years before taking on risk and making the Enhanced Track optional; provide advance shared savings payments to some ACOs that serve underserved populations; add a health equity quality adjustment for high-quality performance in ACOs with high underserved populations; and Create better and more fair financial benchmarks for ACOs by accounting for prior shared savings to help mitigate the lowering of an ACO’s benchmark over time.”

What seems clear to me here is that the leaders of provider organizations that are involved in the MSSP are only asking for what’s reasonable; and that, given the financial strains of the moment that were initiated by the calamity of the early months of the COVID-19 pandemic, CMS officials really have no choice but to be more flexible and accommodating to provider leaders. At the same time, it’s also very clear that the strong focus on the core principle of health equity is one that everyone in the industry can rally around, not only because it is a very sound and indeed, admirable principle around which to rally healthcare leaders; but also because it makes sense in practical terms. One of the biggest challenges for the leaders of patient care organizations involved in accountable care is indeed that of caring for vulnerable populations, whose members so often suffer from social determinants-driven health deficits, and whose health status improvement really does require a U.S. healthcare system-wide “village” to effectuate.

In other words, everyone coming together under the banner of, and through the lens of, health equity, will be an important factor in making all of this work going forward, both conceptually and practically. CMS leaders seem to have found a winning strategy in how to work effectively with providers to move the needle forward in any incredibly important sector of healthcare activity. To have seen the MSSP Program collapse or even founder, would have been devastating to overall progress on value-based healthcare payment and delivery movement; but, at least as of the first week of November, 2022, things are looking far brighter than they were two years ago—and that is a really, really good thing.