February 6, 2015 Ms. Marilyn B. Tavenner, Administrator Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1461-P Room 445-G, Hubert H. Humphrey Building 200 Independence Avenue, SW Washington, DC 20201 Re: Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations Dear Ms. Tavenner: On behalf of the more than 79,000 members of the American College of Surgeons (ACS), we appreciate the opportunity to submit comments to the proposed rule: Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations that was published in the Federal Register on December 8, 2014. The ACS is a scientific and educational association of surgeons, founded in 1913, to improve the quality of care for the surgical patient by setting high standards for surgical education and practice. The ACS appreciates the Centers for Medicare & Medicaid Services (CMS) proposals to revise the Medicare Shared Savings Program (MSSP) to provide greater flexibility for existing Accountable Care Organizations (ACOs) and to attract new ACOs. This includes extending the time period over which an ACO can participate in the one-sided risk model, creating a new "third track" for ACOs who feel they are ready to take on more risk for greater savings, and using the waiver authority provided to CMS to further promote participation in the two-sided performance-based risk models. However, the ACS has concerns over some aspects of the program, as discussed below. PROVISIONS OF THE PROPOSED RULE Assignment of Medicare Fee-for-Service Beneficiaries Consideration of Physician Specialties and Non-Physician Practitioners in the Assignment Process
CMS proposes changes to the current two-step methodology of the beneficiary assignment process. The current beneficiary assignment process first identifies all patients that had a primary care service with a physician who is an ACO professional; this is often labeled the pre-step. Then, CMS uses a two-step process where they first consider the allowed charges for primary care services furnished by primary care physicians who are ACO professionals (step 1), and second consider the allowed charges for primary care services furnished by non-physician practitioners 1 (NPPs) and specialists who are ACO professionals (step 2). Step 2 only applies to beneficiaries who have not received any primary care services from a primary care physician. CMS proposes to include NPPs in step 1 of the assignment process, acknowledging that select NPPs may provide specialty care and would be assigned to an ACO inappropriately based on specialty care over true primary care. CMS also proposes to limit the physician specialties whose services would be taken into account in step 2 of the beneficiary assignment process. To this end, Table 2 of the proposed rule lists physician specialty codes that would continue to be included in beneficiary assignment step 2, and Table 3 lists the physician specialty codes that CMS proposes to exclude from assignment step 2, including general surgery. The ACS believes that including the evaluation and management services of all NPPs in step 1 of the assignment process is problematic as it may include NPPs working in specialties that are not providing primary care services, resulting in an inconsistent system. NPPs assisting an ACO participant 2 that includes only specialists could be unfairly limited to participation in one ACO. The ACS recommends that CMS not include services furnished by NPPs in step 1 or step 2 of the beneficiary assignment process when these NPPs are part of an ACO participant whose physicians are otherwise not relevant to the MSSP beneficiary assignment process. For example, if an ACO participant includes only surgeons and physician assistants (under a single tax identification number (TIN)), the services of all the practitioners represented by this TIN should be ignored for ACO beneficiary assignment purposes. That would allow the ACO participant represented by such a TIN (and all its included physicians and NPPs) to participate in more than one ACO if they chose to do so. This would also reduce the risk that non-primary care services would be the basis for beneficiary assignment under the MSSP. We support CMS proposal to exclude 02-General Surgery from assignment step 2 and allow general surgery ACO participants the 1 Non-physician practitioners refer to nurse practitioners, physician assistants, and clinical nurse specialists. 2 ACO participant is an entity identified by a Medicare-enrolled taxpayer identification number (TIN), including a physician practice. 2
flexibility to join multiple ACOs and not be exclusive to one particular ACO. This will have the effect of enhancing patient access to a variety of providers, ultimately promoting quality of care. Limiting specialists to one ACO, especially in areas of the country where there are shortages of particular specialists, could encourage the formation of ACOs with undue market power, which, in turn, could reduce or eliminate the benefits to Medicare beneficiaries. Shared Savings and Losses Proposals Related to Transition from the One-sided to Two-sided Model CMS proposes to revise the regulation to permit ACOs that have completed a 3-year agreement under Track 1, to enter into one additional 3-year agreement under Track 1. As part of this extension, CMS proposes to reduce the maximum sharing rate during this second agreement period to 40 percent. ACS supports allowing ACOs to remain in Track 1 for one additional agreement period, especially in light of concerns raised by ACOs in the past about the prospect of facing financial penalties after three years. However, we do not support the CMS proposal to lower the maximum amount of savings an ACO can retain from 50 percent to 40 percent, for those that remain in the onesided model for an extra three years. The ACS recognizes the balance between providing incentives that encourage ongoing participation in the program while also decreasing the financial attractiveness of the program enough to encourage ACOs to transition to performance-based risk models. However, the MSSP is still relatively new and providers, especially smaller ones with fewer resources, remain skeptical of the benefits of participating in light of the heavy investment required. To minimize the impact of this investment and ensure broader participation in the program by providers of all sizes and in a range of practice settings, we encourage CMS to allow ACOs that remain in the one-sided model for an additional three years to keep up to 50 percent of savings they bring to Medicare. As a second choice, we recommend allowing the ACO to transition to the 40 percent savings threshold over the three-year period. For example, the first year the ACO could be allowed to keep 50 percent of shared savings, the second year 45 percent of shared savings, and the third and final year keep only 40 percent of the shared savings. This would have the effect of allowing the ACO to adjust to decreased savings, while at the same time lowering the financial attractiveness of staying in Track 1 for a subsequent three years. Creating Options for ACOs that Participate in Risk-Based Arrangements 3
CMS proposes to create an additional risk-based option, referred to as Track 3, for ACOs ready to take on increased risk for the possibility of greater reward. CMS proposes to implement a prospective assignment methodology for this third track in which beneficiaries would be assigned prospectively, so that an ACO would know in advance those beneficiaries for which it would be responsible. There would be no retrospective reconciliation resulting in the addition of new beneficiaries at the end of the performance year, as is done under Tracks 1 and 2. The only adjustments that would be made at the end of the performance year would be to exclude beneficiaries that no longer meet eligibility criteria. The ACS appreciates CMS' proposals to provide ACOs with increased flexibility to choose a model that is most appropriate for them and supports creating a new "third track" for ACOs who feel they are ready to take on more risk, but be eligible to earn greater savings. The ACS further supports the prospective assignment of beneficiaries within Track 3 as this would not only create a model under which systems could more efficiently organize and coordinate patient care while managing costs, but it would also allow beneficiaries a greater degree of certainty and clarity as to what it is that they are opting into when a physician discloses participation in an ACO. Payment Requirements and Program Requirements that May Need to be Waived in Order to Carry out the Shared Savings Program - SNF 3-Day Rule By way of background, the Medicare skilled nursing facility (SNF) benefit is for beneficiaries who require a short-term intensive stay in a SNF. Beneficiaries must have a prior inpatient hospital stay of at least three consecutive days in order to be eligible for Medicare coverage of inpatient SNF care. CMS believes that under a two-sided performance-based risk ACO model, it could be medically appropriate and more efficient for some patients to receive SNF care without a prior inpatient hospitalization or with an inpatient hospital length of stay of less than three days. The ACS supports the waiver of the requirement for a prior 3-day qualifying inpatient hospital stay and urges CMS to consider extending this waiver to ACO participants and ACO providers / suppliers across all three tracks. In its current form, the distinction between outpatient and inpatient hospital services does not improve the care a patient receives, and increases the risk of financial harm to patients that receive outpatient observation services for long periods of time without an inpatient hospital admission. The ACS supports a system where patients are assured that their care and financial obligations will not be adversely affected simply because of their patient status (a sometimes arbitrary designation designed only to 4
determine whether Medicare Part A or Part B is required to reimburse) and the length of their inpatient stay. Seeking Comment on Methodology for Establishing, Updating, and Resetting the Benchmark CMS considers a range of modifications to the benchmarking methodology to increase incentives to achieve savings in a current agreement period, specifically: (1) equally weighting the 3-benchmark years; (2) accounting for shared savings payments in benchmarks; (3) using regional fee-for-service (FFS) expenditures (as opposed to national FFS expenditures) to trend and update the benchmarks; (4) implementing an alternative methodology for resetting ACO benchmarks that would hold an ACO's historical costs, as determined for purposes of establishing the ACO s initial historical benchmark for its first agreement period, constant relative to costs in its region for all of the ACO s subsequent agreement periods; and (5) implementing an alternative methodology for resetting ACO benchmarks that would transition ACOs to benchmarks based only on regional FFS costs, as opposed to the ACO s own historical costs, over the course of multiple agreement periods. The ACS is concerned with the existing benchmarking methodology. Currently, benchmarks are reset at the start of each three year agreement period, based on the previous three year period, and adjusted to account for growth in national Medicare FFS expenditures and to adequately represent newly aligned beneficiaries. Therefore, an ACO is in competition with its own previous performance. In order to continue receiving shared savings, and in some cases to avoid a penalty, ACOs have to continue to bear more and more stringent benchmarks every year. This results in an increasingly high bar for the ACOs that have been the most successful at controlling costs (having already made significant improvements and often having already addressed the low-hanging fruit) and discourages continuing participation in the program. At the same time, the most inefficient ACOs have a higher chance of qualifying for shared savings by making only minimal improvements. The ACS generally supports a system that balances the need for rewarding continuous improvement, but also provides a mechanism to recognize and reward historically high performers to encourage a shift of the health care system, as a whole, to this higher standard. This is a voluntary program that has already suffered from low participation rates. A more balanced risk and reward model will ensure that more ACOs not only are willing to join and make the investment in this model, but remain in the program. Current benchmarking processes assume that patients will stay with an ACO and that any reformed system should better account for the fact that Medicare beneficiaries are able to 5
opt-out of an ACO. Benchmarking reforms should also account for current concerns about an ACO s initial agreement period and whether historical data are an accurate benchmark for the actual beneficiary experiences of the ACO during its first agreement period. The ACS supports moving toward regional benchmarking, as this will result in more fair comparisons. Given the complexity of moving towards regional benchmarks, CMS should provide a more detailed proposal for future consideration and subject to the rulemaking process. We appreciate the opportunity to comment on this proposed rule. The ACS looks forward to continuing dialogue with CMS on these important issues. If you have any questions about our comments, please contact Neha Agrawal, Regulatory Associate in the ACS Division of Advocacy and Health Policy. She may be reached at nagrawal@facs.org or at (202) 672-1524. Sincerely, David B. Hoyt, MD, FACS Executive Director 6