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A Physician’s Takeaways on the CMS Innovation Center’s Latest Changes

A Physician’s Takeaways on the CMS Innovation Center’s Latest Changes

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COVID-19 continues to shift and shape the imminent future of value-based healthcare policy. Last week, the Centers for Medicare & Medicaid Services (CMS) announced further extensions of payment structures to offer additional flexibility. The last few months have proved a challenging time for Accountable Care Organizations (ACOs) across the United States. The disruptive effects of the COVID-19 pandemic on both patient care and facility revenue are compounded by the uncertainty relative to the future of several ACO programs. Fortunately, some of that uncertainty was addressed when the CMS Innovation Center announced an important set of changes to apply for the rest of performance year 2020 and performance year 2021. The most significant takeaways from this extension include:

  • The Next Generation ACO model program, scheduled to conclude at the end of 2020, will now extend through the 2021 performance year.
  • The program will reduce 2020 downside risk by adjusting an ACO’s shared losses per month while the nation is in the PHE.
  • The 2020 performance year upside potential for Next Generation ACOs will now have a cap at 5% of their gross savings.
  • COVID-19 episode of care expenditures will be removed from the 2020 calculations.
  • Performance year one for Direct Contracting, previously set to begin on January 1st of 2021, will be delayed until April 1st of 2021. A second round of applications for Professional and Global Direct Contracting payment model options will open in 2021 with a January 2022 start.

The Next Generation ACO model, designed for organizations prepared to take on more financial risk, has succeeded significantly since the first performance year of 2016. As stated in their press release on the matter, the National Association of ACOs (NAACOS) applauds CMS for extending a program that saved the healthcare system over $406 million in performance year 2018 alone.

In addition, CMS previously announced a set of well-received modifications to the 2021 Medicare Shared Savings Program (MSSP) ACO procedures. The submission period for those change requests will open on June 18th and will conclude on September 22nd of this year. Combined with the potential of the above Innovation Center changes, organizations can create a long-term game plan when the PHE is over. The eligible modifications include:

  • An organization can extend an MSSP ACO agreement, set to expire at the end of performance year 2020, for an additional year.
  • An MSSP ACO in the Basic Track glide path and set to advance in 2021 has the option to maintain the current participation level for an additional year. Those ACOs who utilize this option would return to their original glide path schedule in 2022.
  • The opportunity to modify ACO Participant or SNF Affiliate lists.

Seema Verma, Administrator for CMS, authored a blog post on the changes for Health Affairs. She and the organization intend that the various adjustments will promote flexibility, consistency, and ease reporting burden that has only worsened since the outbreak of COVID-19. The unprecedented circumstances and added stress that the virus brought encouraged these changes, and the CMS Innovation Center plans in nature serve as a reliable source of income for organizations while they mitigate the further spread of coronavirus.


Dr. Locklear - Healthcare Analytics for Population Health Management - About Our Healthcare Analytics Company, Lightbeam Health Solutions

Kent Locklear, MD, MBA is Lightbeam’s Chief Medical Officer.

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