5 Key Takeaways from the MSSP Final Rule and Next Generation ACO Performance Results

December 21, 2018 Ashley Ridlon

The Medicare Shared Savings Program (MSSP) final rule published on December 21, 2018 makes clear CMS’ clear focus on increasing value in health care. The rule can be accessed here along with this CMS fact sheet.

We applaud the agency for its bold approach in “Pathways to Success” and firm commitment to accelerating the shift to value-based care across the U.S. Here are our key takeaways from the final MSSP rule:

  1. We support the Administration’s commitment to moving all ACOs to two-sided risk within a defined timeframe and to supporting provider organizations as they take on more accountability for patient care.
  2. CMS finalized several provisions that will benefit MSSP ACOs, including: lengthening the performance period from three to five years, and new waiver authorities for telehealth services and beneficiary incentives. It also applies the Skilled Nursing Facility three-day waiver previously only available to Next Generation ACOs to risk-bearing ACOs in MSSP.
  3. While the regulation shortens the duration ACOs may remain in the upside-only risk tracks, the final rule does make some concessions to ACOs taking upside-only risk within the lower-risk BASIC track.
    1. Per the final rule, “low-revenue” or physician-led organizations taking upside-only risk can remain in the program for up to three years (rather than two years in the proposed rule).
    2. Furthermore, CMS increased the shared savings rate from 25 percent to 40 percent for ACOs not assuming risk.
    3. These lower levels of risk, however, still limit meaningful health care transformation, as opposed to the Next Generation ACO program’s 85 percent and 100 percent two-sided risk.
  4. The Administration has made some progress on benchmarking methodology, but there is certainly more room for improvement. One positive step: CMS finalized its proposal to use regional trend factors when establishing and updating the ACO’s benchmark during its first agreement period. However, we worry that the blended national and regional trend and update factors still do not adequately account for ACOs that are dominant in their region.
  5. The agency also retained the three percent risk adjustment cap to the ACO benchmark. We continue to believe that such a cap, especially over the course of a five-year agreement period, will not sufficiently account for increasing patient acuity in many ACO markets.

In general, the final MSSP rule rightfully places even more emphasis on the importance of driving accountability to deliver better outcomes and reducing health care costs. There are certainly opportunities for continued improvement, but the final rule does represent a clear direction by CMS toward full performance-based risk in Medicare.

2017 Next Generation ACO Performance and Evolent NGACO Cohort Performance

As part of its announcement, CMS also touted the Next Generation ACO model as a key driver of savings for Medicare. The 2017 Next Generation ACO results reveal Medicare savings of more than $164 million across 44 ACOs and strong performance on quality metrics.

Evolent is extremely proud that its cohort of Next Generation ACO partners generated more than $35M of shared savings for Medicare in 2017.

As one example, Evolent’s partner, Deaconess Health System, saw its ACO, Deaconess Care Integration, maintain its position as one of the top-performing Next Generation ACOs in the U.S. DCI generated more than $16 million in savings to Medicare during the 2017 performance year, which ranks DCI as the second-best performing Next Generation ACO in terms of earned shared savings in 2017 out of 44 Next Generation ACOs across the U.S.

In addition to these savings, DCI achieved an impressive care quality score of 92.83% and ranked #10 across all Next Generation ACOs in the category of Savings as Percentage of Benchmark. Evolent’s NGACO partners like Deaconess generated these savings by focusing on delivering high-quality care while reducing unnecessary health care costs for patients. In particular, our partners—in collaboration with Evolent—emphasized targeted care coordination for patients with chronic conditions, which played a significant role in driving clinical and financial value.

Evolent will continue to push for performance-based risk models in Medicare, whether through a new full-risk track under MSSP or within the “Direct Contracting” model currently in development at the CMS Innovation Center.


For media inquiries, contact Ashley Ridlon, VP Health Care Policy, Evolent Health, or email media@evolenthealth.com.

About the Author

Ashley Ridlon

As Evolent’s Vice President of Health Policy, Ashley leads the development and implementation of the firm’s health policy and advocacy strategy to drive value-based health care transformation across the country. Throughout her career, Ashley has worked to improve the way health care is delivered and financed—from the home care and hospice sectors, to the United States Senate, CMS Center for Medicare and Medicaid Innovation, and the Bipartisan Policy Center.

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