Tag Archives: ACOs

What are the potential effects of prospective and retrospective assignment on key ACO metrics under the MSSP?

At the end of 2018, the Centers for Medicare and Medicaid Services published the Pathways to Success final rule for the Medicare Shared Savings Program (MSSP) giving accountable care organizations (ACOs) renewing July 1, 2019, or later the option to select between prospective and retrospective assignment of patients.

Under prospective assignment, beneficiaries are assigned to an ACO based on services occurring prior to the performance year. Under retrospective assignment, beneficiaries are assigned to an ACO based on services occurring during the performance year. Averages for assignment-eligible fee-for-service beneficiaries can help provide understanding of how the two assignment methodologies affect results.

Retrospective and prospective assignment have significantly different effects on the characteristics of the assigned populations for beneficiaries assigned to primary care physicians and specialists. Prospective and retrospective assignment will ultimately affect the population that is assigned to the ACO because some beneficiaries who are assigned under prospective assignment are not assigned under retrospective and vice versa. The choice between these assignment methodologies can have subtle effects on the ACO’s overall benchmark, risk score, and performance year costs.

In this brief, Milliman’s Sam Shellabarger, Charlie Mills, and Lance Anderson explore in more detail the potential effects of prospective and retrospective assignment on key ACO metrics under the MSSP.

“Pathways to Success” rule changes financial benchmark methodology

The Medicare Shared Savings Program (MSSP) final rule includes changes to the financial benchmark methodology that measures the gross savings or losses of an accountable care organization (ACO) under the MSSP. Four key elements of the financial benchmark methodology changed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.

In this paper, Milliman’s Jill Herbold, Cory Gusland, Charlie Mills, and Matt Kramer discuss these changes and important implications for Medicare ACOs. Each of these changes in the MSSP’s financial benchmark methodology will have significant implications for most ACOs. Given the increase in the agreement period length from three to five years, it is critical that ACOs assess how the final rule will affect their financial benchmarks and related strategies.




Who are the winners and losers of the “Pathways to Success” final rule?

On December 21, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that will significantly change the Medicare Shared Savings Program (MSSP). This rule finalizes many of the “Pathways to Success” provisions detailed in the proposed rule published on August 8, 2018, with some modifications that may have a significant impact on a number of accountable care organizations (ACOs). At its core, the final rule creates a structured timetable for inexperienced ACOs to transition to downside risk, gradually increasing the maximum risk exposure as those ACOs gain more experience with the MSSP. In this paper, Milliman’s Anders Larson and Cory Gusland examine which ACOs will benefit from the final rule.




Milliman Webinar: Seven key challenges for Medicaid states considering alternative payment models

There are a variety of reasons why alternative payment models (APMs) can be more difficult to implement and manage in Medicaid, compared to the commercial or Medicare markets. Understanding these nuances and building strategies to address them is critical to the success of Medicaid APMs. An upcoming Milliman webinar hosted by Anders Larson, Rebecca Johnson, and Zach Hunt will focus on the challenges Medicaid payers face when attempting to establish APMs with providers. The webinar is based on their coauthored paper “Seven key challenges for Medicaid states considering alternative payment models.”

Title: Seven key challenges for Medicaid states considering alternative payment models
Date: Wednesday, February 27, 2019
Time: 2:00 p.m. EST

To register, click here.




How can Medicaid states considering alternative payment models address challenges?

While the use of alternative payment models (APMs) in the Medicare and commercial markets is prevalent, the use of APMs in the Medicaid market is low. There are several reasons why these models are more difficult to implement in Medicaid. Understanding the nuances of Medicaid APMs and building strategies to address them is critical to their success.

In this paper, Milliman’s Anders Larson, Rebecca Johnson, and Zach Hunt discuss seven key challenges that Medicaid payers face when trying to establish APMs with providers. The paper specifically focuses on shared savings/risk contracts based on total cost of care (TCOC) models. The following excerpt provides some perspective.

One challenge with any total cost of care model is that providers inherently take on some level of insurance risk due to random claims fluctuation that can influence results. This is true in the Medicare ACO models, which is why CMS uses a minimum savings rate (MSR) that varies by population size to limit its payments for “false positives.” This is likely to be more pronounced in Medicaid because of challenges with attribution, beneficiaries moving in and out of Medicaid, and a higher prevalence of zero-dollar claimants.




What are the key revisions to the proposed “Pathways to Success” rule?

On December 31, 2018, the Centers for Medicare and Medicaid Services (CMS) published the final rule for the 2019 Medicare Shared Savings Program (MSSP). This rule finalizes many of the “Pathways to Success” provisions detailed in the proposed rule published on August 8, 2018, with some modifications that may have a major impact on a number of accountable care organizations (ACOs). At its core, the final rule creates a structured timetable for inexperienced ACOs to transition to downside risk, gradually increasing the maximum risk exposure as those ACOs gain more experience with the MSSP.

Most of the final regulation is consistent with the proposed rule. But certain key details were revised from the original proposal based on industry feedback and a refinement of CMS’s policy goals. The key changes are:

1. Increase to shared savings rate under the BASIC track.
2. Less strict definition of low-revenue ACO.
3. Current Track 1+ ACOs can enter BASIC track, Level E.
4. New, low-revenue ACOs can spend up to three years in an upside-only arrangement.
5. Removal of cap on risk score reductions to performance benchmarks (3% cap on risk score increases remains).
6. Slower schedule for regional cost adjustment reductions.
7. Prospective assignment for the July to December 2019 performance period.

Taken together, these changes from the proposed rule offer some opportunities to ACOs that may have been hesitant to enter or continue in the MSSP while maintaining a clear focus on fiscal responsibility and payment for value.

In this paper, Milliman’s Noah Champagne, Charlie Mills, and Jason Karcher discuss the changes to the MSSP financial benchmark and settlement parameters from the proposed rule in August and the final rule published in December.