Medicare Shared Savings Program changes could benefit physician-led ACOs

You've probably heard that accountable care organizations participating in the Medicare Shared Savings Program (MSSP) will be held to new rules starting July 1 — and that some large, hospital-owned ACOs are concerned. But what you might have missed is the excellent prognosis for physician-led ACOs.

TMA PracticeEdge and our friends at the Partnership to Empower Physician-Led Care lobbied for changes that allow smaller, lower-revenue ACOs to take on risk appropriate to their financial circumstances. The new “Pathways to Success” MSSP program is good news for our physician-led ACOs.

“Historically, physician-led ACOs have generated significantly higher shared savings compared to hospital ACOs, and the provisions of the final rule reflect the prioritization of independent physicians,” said Dave Spalding, chief operating officer of TMA PracticeEdge. “The MSSP final rule is part of a larger trend by both government and commercial payers to provide experienced physicians’ groups significantly greater risk and reward opportunities.”

Here are three benefits for small, physician-led ACOs under the new rules:

  1. Nearly half of physician-led ACOs, like our 15 clients across Texas, are considered “low-revenue” due to their percentage of Medicare revenues generated by the ACO, meaning they qualify for a gentler slope into risk-based contracts. Low-revenue ACOs will have between one and three years of upside-only shared savings.

  2. Most will face lower financial risk. Shared loss rates under the Basic track is capped at 30%, while the Enhanced track rate (required of most high-revenue, MSSP-experienced ACOs) will be 40-75% depending on quality performance.

  3. The transition to risk sooner rather than later means physicians participating in the Level E Basic track or the Enhanced track can stop participating in the Merit-based Incentive Payment System (aka MIPS) and instead qualify for the 5% “alternative payment model” bonus.  

Under the final rules, Track 1 (the program’s one-sided, shared savings-only model) and Track 2 (the two-sided model offering both an opportunity for shared savings and shared losses) will both be discontinued. In their place, the Basic track offers a “glide path” to incrementally higher levels of both risk and reward, and the Enhanced track is based on the current two-sided Track 3. The Enhanced track will provide more flexibility for ACOs that brave the highest level of risk and reward.

Pathways to Success is aptly named, forcing hospital-owned ACOs to become more competitive and offering promising opportunities for physician-led ACOs.

Do you have questions about Pathways to Success? Could it be a good fit for your ACO in the future? Call TMA PracticeEdge at 888.900.0334 or contact us here today. We’ll walk you through the best options for your practice.