This week, our In Focus section is the second in a summer series of analysis and insights from Health Management Associates (HMA) on recent Medicare payment and policy developments. This week we dig deeper into the potential changes to the Medicare Shared Savings Program (MSSP) that were included in the 2024 Medicare Physician Fee Schedule proposed rule released earlier this month. Specifically, we highlight the impact these modifications could have on financial and operational decisions across the healthcare industry.
The proposed rule builds on the changes CMS finalized last year with the goal of increasing participation in the MSSP. The recommended changes are designed to appeal to more clinicians who treat a high proportion of underserved individuals. CMS estimates that the proposal will increase participation in MSSP by 10−20 percent. These changes are technical in nature and include:
- Expanding the physician lookback window for beneficiary assignment (also known as the pre-step) for primary care service to 24 months from 12 months
- Adding a third step to the claims-based beneficiary assignment methodology to recognize the role of nurse practitioners (NPs), physician assistants (PAs), and clinical nurse specialists (CNSs) in delivering primary care services
- Modifying the definition of “assignable beneficiary” to reflect the changes above
The overall impact of these modifications, which augment the existing methodology, is to increase the number of beneficiaries assigned to accountable care organizations (ACOs) under MSSP. More assignable beneficiaries could mean:
- More ACOs will meet minimum beneficiary requirements.
- Changes in assignable population may affect the hierarchical condition category (HCC) risk scores for the national assignable population, as well as the factors used to normalize risk scores and other risk adjustments.
- Changes in population distribution within regions that result in adjustments to ACO market share, benchmark trends, and update factors.
For ACOs participating in multiple programs, expanded assignment rules for MSSP, combined with the MSSP superseding other programs in assignment, may have downstream effects on programs in terms of assignment and performance.
Following is a more detailed explanation of the proposed changes.
24-Month Lookback for Primary Care Services
Extending the lookback for primary care services with a physician to 24 months from 12 will allow providers to capture additional primary care services codes related to the COVID-19 public health emergency (PHE) for benchmark and performance years. If the assignment window for a benchmark or performance year includes any month(s) during the PHE, then the additional primary care services codes must apply to all months in that window.
Three-Step Assignment Process
CMS plans to update its current two-step claims-based beneficiary assignment process to a three-step process, which would be effective for performance years beginning January 1, 2025. The proposed third step only would apply to beneficiaries who do not meet the pre-step requirement contingent upon whether they received at least one primary care service during the expanded window for assignment from an ACO-participating primary care or specialist physician or received at least one primary care service from a non-physician ACO healthcare professional during the 12-month assignment window.
Assignable Beneficiary Definition
The proposed rule includes updates to the definition of an assignable beneficiary to reflect the expanded 24-month lookback window for assignment and the new third step of a primary care service within the 12-month assignment window from a non-physician ACO professional (i.e., NP, PA, CNS).
The table below compares the current and proposed assignment processes.
Comparison of the Two- and Three-Step Processes
| Step | Current Two-Step Beneficiary Assignment Process | Proposed Three-Step Beneficiary Assignment Process |
| Pre-Step Requirement to Identify Assignable Beneficiary | CMS identifies beneficiaries who received at least one primary care service from a primary care physician or a physician with a primary specialty designation participating in an ACO in the 12-month lookback window. CMS determines whether these individuals are eligible for assignment to an ACO. | CMS identifies beneficiaries who received at least one primary care service from a primary care physician or a physician with a primary specialty designation participating in an ACO in the 24-month lookback window. |
| Step 1 | Determine if beneficiaries received the plurality of their primary care services from primary care physicians, NPs, PAs, and CNSs in the participating ACO. | No change |
| Step 2 | If not assigned in Step 1, determine whether beneficiaries received the plurality of primary care services from specialists in the participating ACO. | No change |
| Step 3 | Not applicable | For beneficiaries not assigned through Steps 1 and 2:· Determine if beneficiary received at least one primary care service with a non-physician ACO professional (e.g., NP, PA, or CNS) in the ACO during the applicable 12-month assignment window; AND· Confirm beneficiary received at least one primary care service with a primary care physician or specialist who is an ACO professional in the ACO and who is a primary care physician or a non-physician ACO professional (i.e., NP, PA, CNS) during the applicable 12- month expanded window for assignment. |
Financial Considerations
The proposed rule outlines that the expenditure lookback will remain 12 months. With a 24-month primary care service window and a 12-month expenditure lookback, ACO revenues could change. As a result, minimum savings rates could drop and the per-member per-month amount might change. In addition, the extended lookback could affect the regional average risk-adjusted spending, expenditure thresholds, and more.
Enhanced MSSP Track
CMS is seeking comment on a new track in MSSP with a higher level of risk and potential reward (e.g., somewhere between 80−100 percent). The purpose of the new MSSP track is to encourage ACOs that would not have otherwise participated in MSSP because of limitations on upside rewards. Higher potential rewards may also incentivize ACOs to develop new strategies, focus on specialty care integration, and reduce healthcare fragmentation to achieve savings.
CMS is seeking comment on the following:
- Policy/model design elements that could be implemented so that CMS could offer a higher risk track without increasing program expenditures
- Approaches to protect ACOs that serve high-risk beneficiaries from expenditure outliers and reduce incentives for ACOs to avoid high-risk beneficiaries
- The impact that higher risk sharing could have on care delivery redesign, specialty integration, and ACO investment in healthcare providers and practices
The HMA Medicare and value-based care experts will continue to analyze these proposals alongside other policy and reimbursement changes that affect Medicare providers. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support clients that intend to draft comment letters on this proposed rule. For more information or questions about these policies and other changes in the 2024 Medicare physician fee schedule proposed rule, contact our experts below.
