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Federal Reforms Poised to Strengthen Model That Offers High-Quality Care at Lower Costs

Arnold Ventures applauds the Centers for Medicare & Medicaid Services (CMS) for proposed changes aimed at encouraging more participation in the Medicare Shared Savings Program (MSSP), the government’s primary tool for incentivizing providers to deliver care that reduces health care spending while maintaining quality.

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The government is seeking to re-energize provider participation in a promising care model with demonstrated success lowering health care spending with a proposed rule that would address existing shortcomings and strengthen opportunities for federal health care savings. 

The Centers for Medicare and Medicaid Services (CMS) has proposed several major changes to the Medicare Shared Savings Program (MSSP), the federal government’s primary tool for incentivizing more efficient use of health care services and lowering health care spending. In a new letter to CMS, Arnold Ventures applauds these proposed reforms, which would help strengthen the MSSP, control health care costs, and sharpen the focus on advancing health equity.

Over the last decade, the U.S. health care system has tested dozens of models that change how health care providers deliver care and get paid, with the goal of incentivizing higher quality care that contains costs. Most of these models have shown limited or no success. While performance has been uneven and difficult to measure, accountable care organizations (ACOs) have demonstrated that they can improve quality and produce net savings to Medicare.

Since its launch in 2012, the MSSP — the government’s primary ACO model — has given providers the tools and incentives to improve quality and reduce costs. Providers in the MSSP deliver care to nearly 11 million Medicare beneficiaries. Given the promising evidence on ACOs, CMS envisions having all beneficiaries in these kinds of models by the end of this decade. 

The MSSP will be a key pathway for achieving this ambitious goal. Yet the MSSP’s momentum has stalled. After several years of rapid growth, participation has leveled off. Getting more providers to join the MSSP and strengthening the program must be a top priority for CMS to realize its vision. 

CMS’s proposed changes to the MSSP in the 2023 Physician Fee Schedule proposed rule released this summer are intended to increase participation in the MSSP and enhance incentives for ACOs to reduce spending in the Medicare program, and they represent a major step forward in strengthening the MSSP, with an admirable focus on advancing health equity. Some of the key proposed reforms include:

  • Revisions to the benchmark methodology that is used to determine shared savings payments to ACOs. These would address limitations with the current methodology that have threatened long-term participation in the MSSP among successful ACOs by making it harder for them to hit savings targets and weakening their incentives to save over time. These revisions would also adjust the benchmarks for less efficient providers, increasing their incentives to join the program, which is important because these providers have the greatest savings potential.
  • A gradual transition to prospectively set administrative benchmarks. This change would transform the current approach to setting benchmarks in a way that could increase participation in the program and strengthen incentives to save over the long term.
  • Changes to increase the number of underserved beneficiaries in ACOs. Proposed adjustments to ACO payments to ensure that they accurately reflect the costs of caring for medically complex beneficiaries will increase participation among providers who treat these patients and who have historically been underrepresented in the program. These changes are important because they advance CMS’s goal to improve equity.
  • Changes to provide upfront funding to low-resource providers. A new policy to provide advance investment payments to select providers is intended to help providers without access to capital — such as, small, physician-led ACOs — participate in the MSSP. This change would increase participation in the MSSP, particularly among providers that are otherwise unlikely to join the program due to lack of start-up funds.

Arnold Ventures strongly supports these proposed reforms, which would go a long way toward addressing key limitations in the current policy and hopefully improve participation in the MSSP and generate greater savings over the long term.

However, we encourage CMS to consider refinements to certain proposed changes (e.g., allowing providers to have a much longer transition to downside risk) to ensure they do not undermine the program’s savings or weaken providers’ incentives to invest in making practice changes that improve care delivery and reduce costs. In addition, we urge CMS to consider larger scale reforms to the risk adjustment approach, which is foundational to paying ACOs appropriately, and the use of limited mandatory participation and other levers to move more providers from fee-for-service into ACOs in future years’ rulemaking. 

Read the letter below.