How Effective Are New CMS Rules To Protect ACOs From COVID-Related Losses?

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The May 8 IFC policy changes are intended to provide some financial protections to ACOs while limiting the potential for windfall gains. The IFC removes COVID-related costs from MSSP performance year expenditures – defined as a beneficiary’s Part A and B expenditures for affected months triggered by an inpatient episode of care for COVID-19. The same COVID-19 costs are removed from fee-for-service spending used to calculate regional and national trend factors. This will reduce the variation between the national and regional spending trends stemming from COVID, which will help large ACOs operating in COVID hotspots in particular. In 2020, 37 percent of MSSP ACOs are subject to downside risk and will face potential penalties if their spending exceeds their benchmark. Prior to the new IFC, the proportion of ACOs with downside risk would rise to 64 percent in 2021. The new policy allows ACOs to continue in their current risk track for 2021, mitigating next year’s risk for many ACOs. The IFC also offers a one-year extension for ACOs whose agreement periods end in 2020 and allows them to maintain their prior benchmark. Many ACOs have worked closely with their providers to rapidly deploy telehealth solutions after the Administration announced expanded Medicare coverage for these services. But CMS policy was unclear about whether telehealth visits could be counted for ACO attribution. The IFC clarifies that CMS will recognize many primary care services provided by ACO clinicians via telehealth, virtual check-ins, e-visits and telephone for beneficiary assignment starting in March 2020 and continuing through the public health emergency (PHE). This policy reduces the likelihood that 2020 ACO attribution will be skewed towards high-risk beneficiaries. But risks remain since it’s unlikely ACOs can completely make up lost primary care visit volume through telehealth; physician practices nationally have thus far replaced only fourteen percent of pre-COVID in-person visit volume with telehealth. ACOs also risk losing beneficiaries who receive telehealth services from non-ACO providers. CMS previously established an “extreme and uncontrollable circumstances” policy that offered providers and ACOs certain regulatory flexibility in the face of emergencies like natural disasters. On April 6, 2020 CMS expanded this policy to provide relief to ACOs for any shared losses they incur based on the number of months the COVID-19 PHE is in effect. The May 8 IFC clarified that the COVID PHE officially began in January, and it was recently extended until July 21 by Secretary Azar. If the PHE ends in July, any ACOs incurring shared losses in 2020 would have to repay only 42 percent (losses forgiven for seven months out of twelve). If the PHE continues through 2020, all ACO shared losses would be forgiven. Read full article in Health Affairs

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