MSSP saves Medicare $1.66 billion as program changes loom

The good news: The Medicare Shared Savings Program (MSSP) has reported a fifth consecutive year of savings while delivering high-quality care for Medicare beneficiaries in accountable care organizations (ACOs).

The tricky news: With participation dropping since performance year 2018, ACOs will need places to pivot as success becomes more dependent on risk progression, benchmarking and equity goals.

The 2021 MSSP results

CMS reported the following highlights from the 2021 MSSP performance year:

• 99% of participants met the quality targets required for shared savings;
• 58% earned shared savings;
• ACOs outperformed non-MSSP providers in metrics related to diabetes, blood pressure, select cancers, fall risk, flu vaccination, tobacco screening and smoking cessation, and screening/remission for depression.
• ACOs with specific characteristics saved more than their counterparts. This includes ACOs labeled low revenue and those dominated by primary care providers.

For example, low-revenue ACOs saved $237 net per capita compared to $124 saved by high-revenue ACOs. Low-revenue ACOs are those in which Medicare Part A and B revenue makes up less than 35% of Parts A and B expenditures. In addition, ACOs with at least 75% primary care physicians netted $281 in per capita savings versus $149 for those with fewer PCPs.

More than half of MSSP ACOs are in one-sided risk models (280 of 475), with more than 75% (212 of 280) of those participants having expenditures lower than the benchmark — these participants could have been eligible to generate shared savings. Out of the 90 ACOs that have expenditures exceeding benchmark, over 75% (68) were at one-sided risk. Of the ACOs that were in two-sided models, only 15 generated losses that required repayment to CMS, with most of these either renewing or reentering their third performance year.

Overall, the results bode well for MSSP as important CMS rule changes --  finalized and proposed — continue to shape the program.

Two races: Toward risk and toward the bottom

MSSP has always had its naysayers, with risk and benchmarking topping the list of model design critiques.

Due to a December 2018 final CMS rule, MSSP now includes “Pathways to Success,” which gives participants a glide path toward increased risk. A BASIC track was established as part of the rule for ACOs to join an upside-only risk model while phasing toward downside risk. The glide path comprises Levels A through E, through which risk and incentives increase. The path is in addition to existing tracks whose risk models vary.

While this slowed the prior path toward two-sided risk, some believe CMS is still moving too fast. What was designed to encourage participation resulted in more than a 13% loss of program participants after the December 2018 rule.

DataGen's senior director of advanced analytics, Alyssa Dahl, notes: "There is concern over the cohort left in the program and selection bias among the providers still participating."

The other concern is quality. While 99% of MSSP ACOs met quality targets, nearly 10% of these had an overall score of less than 80% — the equivalent of a report card of C, D or F. Because it is also challenging to impact cost and outcomes concurrently, ACOs run the risk of advancing quality while losing their ability to bend the cost curve — what John Kalamaras, DataGen's director of business intelligence analytics, describes as "the limbo bar that can only go so low."

Another factor is the "ratchet effect" — the unintended impacts of benchmarking. As McKinsey reports: "This approach is commonly referred to as 'rebasing' … [in which] ACOs become 'victims of their own success': Improvements made by the ACO in one year lead to a benchmark that is even harder to beat in the following year."

The opposite is also true (e.g., savings earned by simply going from bad to better, otherwise known as the "race to the bottom").

More flexibility and funding

Like so many aspects of healthcare, MSSP reveals what the pandemic giveth and taketh away. Due to the public health emergency, ACOs can delay moving to the next level of risk in performance year 2022 but must leapfrog to where they would have been in subsequent years.

This option was enacted through the final FY 2022 Medicare Hospital IPPS and LTCH Rates rules — two of many regulatory actions CMS is taking to maintain MSSP participation while encouraging new entrants. The 2023 Medicare Physician Fee Schedule proposes changes that "seek to reverse certain [MSSP] trends" (e.g., fewer beneficiaries, including those who belong to high-cost and/or underrepresented groups), including:

• advanced payments to low-revenue ACOs that are new to MSSP;
• more options for slower risk assumption; and
• a "more long-term benchmarking" approach to counteract ratcheting.

These proposals will help determine MSSP's popularity and longevity. The stakes are high for CMS, which seeks to have 100% of traditional Medicare enrollees in value-based care arrangements by 2030.

Organizations considering MSSP can benefit from DataGen's specific program experience, including data management and performance analysis for strategic shifts.