As the prevalence of partnerships between payers and
providers increases, it is critical for payers to monitor and track emerging
experience and communicate these results to partner providers.
Data-driven insights through claims-based monitoring and
analytics can help identify areas of action and allow payers and providers to
efficiently allocate resources, increasing the likelihood of successful,
Many partnerships have found that engaging a neutral third
party to assist in negotiating and monitoring contractual provisions is helpful
in building trust and identifying activities for potential improvement.
Data-driven insights through claims-based analytics can help identify provider
inefficiencies in utilization and cost and improve overall provider
To read more about how claims analytics can help boost provider performance, read the article “How to optimize partner providers’ performance using claims analytics” by Milliman’s Dane Hansen and Noah Champagne.
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.
Population-based payments (PBPs) provide Next Generation ACO Model (NextGen) participants with an alternative funding mechanism that can be used to improve overall care management, with the goal of achieving higher savings. Accountable care organizations (ACOs) that are able to negotiate payment structures with participating providers at lower costs than the fee-for-service rates paid by the Centers for Medicare and Medicare Services (CMS) can generate additional income.
While PBPs are currently restricted to the NextGen program, if the payment method proves successful, CMS could introduce a similar mechanism to the Medicare Shared Savings Program (MSSP) or other risk-sharing programs.
In this article, Milliman consultants Noah Champagne and Jason McEwen list the four alternative payment mechanisms that NextGen participants can elect, including PBPs and all-inclusive population-based payments (AIPBPs). They discuss how ACOs can generate additional revenue by strategically employing these mechanisms and provide an example of a PBP arrangement.
The Centers for Medicare and Medicaid Services (CMS) changed the benchmark methodology for accountable care organizations (ACOs) entering a renewal Medicare Shared Savings Program (MSSP) agreement period in 2017 and thereafter. The 2017 methodology introduced a regional adjustment, where an ACO’s historical expenditures are adjusted upward or downward based on how their costs compare to regional expenditures on a risk-adjusted basis. Because the risk adjustment depends on an ACO’s benchmark period risk scores, accurate and complete diagnosis coding during the benchmark period now has a significant influence on the calculation of the ACO’s benchmarks in future performance years.
CMS uses benchmark year (BY) 3 risk scores for the calculation of the regional adjustment, scores that are based on diagnoses from claims incurred in BY2. MSSP ACOs anticipating renewals in 2020 need to be working this year (2018) to ensure accurate and complete coding. Similarly, 2019 is the critical year for 2021 renewals.
In this paper, Milliman’s Jonah Broulette, Noah Champagne, and Kate Fitch explain how BY3 risk scores affect the benchmark calculation for MSSP renewals, present an overview of the prior and new risk adjustment calculations in MSSP, and illustrate how the change can affect an ACO’s benchmark under various scenarios.
The Medicare Access and CHIP Reauthorization Act (MACRA) makes significant changes to the Medicare payment system by introducing a quality-based payment model. While MACRA primarily affects Part B clinicians, there are numerous implications that Medicare Advantage (MA) plans should consider. A strategic approach can help MA plans understand and respond to the legislation.
In the article “MACRA and Medicare Advantage plans: Synergies and potential opportunities,” Milliman actuaries explore the answers to the following questions:
• How will MACRA affect MA plans’ provider payments?
• What synergies exist between MACRA’s quality scoring and the MA Stars quality program?
• How can MA plans help providers achieve Qualifying Participant (QP) status?
• What incentives exist under MACRA for providers to improve risk score coding?
• How are MA plans in the market responding to MACRA?
Read Milliman’s “MACRA: The series” to learn how the legislation will affect providers, alternative payment models, and health plans
The Department of Health and Human Services (HHS) is striving to link 50% of Medicare payments to alternative payment models by 2018. One of the primary alternative payment models offered to Medicare providers is the Next Generation Accountable Care Organization (NGACO). Due to the potential large risk exposure for organizations considering this model, they should work with an actuary to understand the critical elements driving financial success (or failure). In this article, Milliman’s Charlie Mills, Cory Gusland, and Noah Champagne identify five key financial considerations that all ACOs should review before committing to the program. The considerations are ranked by the authors’ perceived importance, with one being the most important.
5. ACO’s CY2014 experience is the baseline for the first three performance years
4. Risk score changes are capped at 3% from the baseline year to each performance year
3. First dollar savings and losses
2. The 2016 benchmark trends are likely understated
1. In order to achieve savings, participants must outperform trended baseline less discount