On June 4, 2015, CMS issued final regulations revising the Medicare Shared Savings Program, including changes to provisions relating to the payment of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program.  The final rule reflects CMS’s consideration of comments received in response to its December 8, 2014 proposed rule.  Among other things, the final rule creates a new “Track 3” option for shared savings that would permit participants to share greater financial risk and reward (up to 75%). 

Under the Medicare Shared Savings Program, providers of services and suppliers that participate in ACOs continue to receive traditional Medicare fee-for-service payments under Parts A and B, but the ACOs may be eligible to receive a shared savings payment if they meet specified quality and savings requirements.  The program is voluntary and accepts applications on an annual basis.  Applicant organizations agree to participate in the program for three years.  There currently are more than 400 ACOs serving in excess of 7 million Medicare beneficiaries.

In the final rule, CMS:

  • Creates a new Track 3 based on some of the successful features of the Pioneer ACO Model, including higher rates (up to 75%) of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
  • Streamlines data sharing between CMS and ACOs, helping ACOs more easily access patient data securely for quality improvement and care coordination to drive critical improvements in beneficiaries’ care;
  • Establishes a waiver of the 3-day stay skilled nursing facility (SNF) rule for beneficiaries who are prospectively assigned to ACOs under Track 3; and
  • Refines policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings. 

The final rule also announces CMS’s intent to propose further improvements to the benchmarking methodology later this year.

A copy of CMS’s final rule, which will be published in the Federal Register on June 9, is available here.  CMS’s press release announcing the final rule is available here.

Reporter, Ramsey Prather, Atlanta, + 1 404 572 4624, rprather@kslaw.com.