Medicare Shared Savings Program--Foundation for a Clinically Integrated Network

May 2014
Prepared for National Rural Health Association
Medicare Shared Savings Program
Foundation for a
Rural Clinically Integrated Network
May 2014
©2014 Pershing Yoakley & Associates, PC.
No portion of this PowerPoint presentation may be used for any purpose other than an
individual’s own educational purposes without the express written permission of PYA.

May 2014
• Per se illegal for independent market participants to
negotiate jointly on price-related terms
• Three options
– Messenger model
– Economic integration
– Clinical integration
Antitrust Basics

May 2014
• Provider organization cannot exercise market power in
anti-competitive manner
– Market power = immune from competition
– Presume market power from market share
– Overcome presumption by demonstrating pro-competitive
effects
Antitrust Basics

May 2014
• FTC guidance
– Statements of Health Care Antitrust Enforcement Policy
– Consent decrees and advisory opinions
– MSSP safe harbors
• Bottom line: Does the organization maintain high degree
of interdependence and cooperation to control costs and
ensure quality?
Clinical Integration

May 2014
Clinical Integration
• Providers accountable to each other and to
community to deliver high-quality care in
efficient manner
– Collectively define and enforce standards of care
– Coordinate patient care
– Identify and pursue efficiencies
• Crucial strategy for value-based purchasing,
population health management

May 2014
Clinically Integrated Network
• Lean infrastructure to support provider
accountability
• Vehicle for independent providers to jointly
negotiate with payers
– Access to patients
– Aggregate risk

May 2014
• Brings together providers from multiple communities
• Unique focus on continuum of care and economies of
scale
• Aggregate risk
• a/k/a Community Care Organizations
Rural Clinically Integrated Network

May 2014
Participation Agreement
• Individual providers join a CIN by signing a
participation agreement
• Terms of agreement established by CIN
governing body
– Parties’ respective rights and responsibilities
– Demonstrates CIN legitimacy to payers
• Breach = remedial action, termination

May 2014
Polling Question #1

May 2014
CIN Functions
• Core functions
– Promote evidence-based medicine
– Facilitate care coordination
– Negotiate and manage payer contracts
• Additional support services

May 2014
Promote Evidence-Based Medicine
• EBM = integrating individual clinical expertise with the
best available external clinical evidence from systematic
research
• Clinical protocols
– Identify (prioritize)
– Implement (education, technology solutions)
– Monitor (reporting on quality measures)
– Remediation, punitive measures

May 2014
Facilitate Care Coordination
• Identify high-risk, high-cost patients
– Disease registries
– Data analytics
• Aggressive interventions
– Patient navigator
– Remote monitoring
– Transitional care management
– Health information exchange

May 2014
Manage Payer Contracting
• Standard fee schedule
• Narrow networks and tiered benefits plans
• Pay for performance
• Shared savings programs
• Bundled payments
• Centers of Excellence
• Global budgets

May 2014
Shared Savings Programs
Key Contract Terms
• Identify parties to contract
• Define population/attribution
• Calculate total-cost-of-care benchmark
• List quality metrics
• Set out minimum performance standards
• Specify savings percentage

May 2014
Shared Savings Program
Performance
• Attribute patients and set benchmark
• Providers continue to bill fee-for-service
• Track performance on quality metrics
• Calculate payer’s actual total cost of care for specified period
• Actual TCC – benchmark = savings
• Payer pays CIN percentage of savings
• CIN allocates savings among participants, others
• Adjust benchmark, start over

May 2014
One-Sided vs. Two-Sided
• One-sided – If actual costs exceed benchmark,
CIN not liable for difference
• Two-sided – If actual costs exceed benchmark,
CIN liable for difference
– Eligible for greater share of savings
• Window of opportunity on one-sided model is
closing rapidly

May 2014
• 340 participating ACOs; very few rural providers
• Three-year contracts
– Each year = performance year
– One-sided available first contract term only
• Next start date is January 1, 2015
– NOI due May 30
– Application due July 31
Medicare Shared Savings Program

May 2014
• Shared savings
• PQRS reporting
• Private payer credibility
• Waivers
MSSP Advantages

May 2014
• Lift restrictions of Stark law, Anti-Kickback Statute,
gainsharing, and beneficiary inducement CMPs
– State laws and federal antitrust and tax laws still apply
• Two primary waivers: ACO pre-participation and ACO
participation
• Three secondary waivers
– Patient incentives
– Shared savings distributions
– Stark law compliance
MSSP Waivers

May 2014
Pre-Participation Waiver
• Governing body makes bona fide determination that
arrangement reasonably related to MSSP purposes
– Includes “promoting accountability,” “managing and
coordinating care,” and “encouraging investment in
infrastructure and redesigned care processes”
• Complete and contemporaneous documentation
with public disclosure as required by HHS
• Effective through start date of participation
agreement or date of application denial letter (with
6 months to unwind)

May 2014
Participation Waiver
• Requirements
– Current MSSP participant in good standing
– Governing body makes and duly authorizes a bona fide
determination that arrangement reasonably related to MSSP
purposes
– Complete and contemporaneous documentation with public
disclosure as required by HHS
– Cannot include incentives to limit medically necessary items
and services
• Timeframe
– From effective date through 6 months following expiration or
termination of participation agreement (and renewals)

May 2014
MSSP ACO Formation
• Legal entity
• Governing body
– 75 percent ACO participants
– 1 independent Medicare beneficiary
– Fiduciary duty (not responsible for governing activities of
individuals or entities outside the ACO)
• Management
– Board-appointed manager
– CMO, QA-QI professional, compliance officer
– Audit and record retention requirements

May 2014
• Sufficient number of PCPs to achieve 5,000 attributed
beneficiaries
• Any other Medicare providers in good standing
• “Other entities”
MSSP ACO Participants

May 2014
• Identified by TIN
• Includes all providers/suppliers that bill through that
provider number (reassignment)
• If TIN bills for any primary care service, TIN is exclusive to
that ACO
MSSP ACO Participant

May 2014
Required Agreements
ACO
TIN
NPI
Accountable Care Organization (CIN)
Physician Practice
Each Physician Who
Reassigns to Physician Practice
Participation
Agreement
Participation
Agreement

May 2014
• Executed prior to submission of application
• Explicit agreement to participate in MSSP and adhere to
42 CFR Part 425
• Participants’ rights and obligations
• Termination based on non-compliance
• No referral requirements
Participation Agreement

May 2014
• 4-physician group practice; each reassigns billing rights to group
• Practice can participate in MSSP as part of ACO only if all 4
physicians agree
• If practice bills for any primary care service, practice is exclusive
to that ACO
• Physician can participate in another ACO only if billed through
another TIN
– Group practice exception
• “Other entity” option
– Governing body participation
Example

May 2014
• Mission, vision, values
• Sample participation agreement
• List of ACO participants
– Notify CMS within 30 days of any change
– Updated list at the beginning of each performance year
• Conflicts of interest policy and signed disclosure
statements
• Job descriptions for required staff
• Organizational chart (governance and management)
MSSP Application - Details

May 2014
• Describe how the ACO will:
– Establish and maintain quality assurance and
improvement program
– Promote evidence-based medicine, patient
engagement, care coordination, patient-centeredness
– Compile and report participants’ quality measure
scores
– Distribute shared savings and assess shared losses
MSSP Application - Narrative

May 2014
MSSP Attribution
Primary Care Services
• E&M Services
– 99201-15; 99304-99318;
99324-99340; 99341-
99350
• Wellness Visits
– G0402, G0438, G0439
• RHC/FQHC Services
– 0521, 0522, 0524, 0525
Primary Care Physicians
• Family Practice
• General Practice
• Internal Medicine
• Geriatric Medicine

May 2014
MSSP Attribution – Step 1
• Identify beneficiaries who received a PC service from
ACO’s PCPs in last 12 months
• Attribute beneficiary to the ACO only if:
Total allowed charges
for PC services billed by
ACO’s PCPs in last 12
months
Total allowed charges
for PC services billed by
PCPs in any other ACO
or non-ACO TIN in last
12 months

May 2014
Step 1 Example
Beneficiary Organization PCPs Specialists +
Mid-levels
A1 ACO $400 $600
A1 Other MSSP
ACO
$350 $1000
A1 Group Practice $375 $800
Allowed Charges for PC Services

May 2014
MSSP Attribution – Step 2
• Identify non-Step 1 beneficiaries who received a PC service from
an ACO specialist physician within last 12 months
• Attribute beneficiary to ACO only if:
Total allowed charges for
PC services billed by all
ACO physicians and mid-
levels in last 12 months
Total allowed charges for
PC services billed by PCPs
in any other ACO or non-
ACO TIN in last 12 months

May 2014
Step 2 Example
Beneficiary Organization PCP All physicians
+ mid-levels
A2 ACO $0 $400
A2 Other MSSP ACO $0 $350
A2 Group Practice $0 $375
.
Allowed Charges for PC Services

May 2014
• FQHCs
• RHCs
• CAHs billing Method II billing
MSSP Attribution – Rural Considerations

May 2014
Polling Question No. 2

May 2014
Beneficiary Eligibility
During the last 12 months, beneficiary has:
• At least one month of Part A and Part B enrollment
• No months of:
– Part A enrollment only
– Part B enrollment only
– Medicare Advantage enrollment
– Group health plan enrollment
– Non-US residence
• Received at least one PC service billed by ACO physician
• Not been included in other shared savings initiatives

May 2014
• Many applicants denied participation due to insufficient
attribution
• Identifying attributed beneficiaries
– Quarterly preliminary assignment lists
– Final assignment report at end of the year
Attribution Experience

May 2014
Setting the Benchmarks
• Identify all beneficiaries who would have been
attributed to ACO in each of 3 prior years
• Divide into four categories: ESRD; disabled; elderly
dual eligible; elderly non-dual eligible

May 2014
• Calculate per capita 3-year average total cost of care for
each category
– Exclude IME and DSH payments
– Cap at 99th percentile (avoid catastrophic claims)
– Trend using national Medicare growth factors
– Risk adjust to reflect most recently benchmark year
• Update annually by projected growth in Medicare
spending; other updates based to changes to ACO
participant list
Setting the Benchmarks, Cont’d

May 2014
CMS Data Requests
• At ACO’s request, CMS will provide aggregate claims data
for preliminarily assigned beneficiaries
• Data enables ACO to identify savings opportunities
• No data use agreement or beneficiary notification
required because no protected health information

May 2014
CMS Data Requests
• ACO may receive certain beneficiary identifiable claims
data, but only if:
– ACO has signed HIPAA-compliant data use agreement
– ACO notifies beneficiaries of opportunity to opt out of such
data sharing
– Beneficiary has not exercised opt-out rights

May 2014
CMS Data Requests
CMS also shares aggregate beneficiary reports at the
beginning of the start of the agreement period, which
include:
1. Aggregated metrics on the assigned beneficiary
population
2. Utilization and expenditure data based on historical
beneficiaries used to calculate the benchmark

May 2014
Allocation of Savings
• May include non-ACO participants
– Other entities
– Management company/investors
• Provider buy-in
• Easy to understand, implement
• Recognize all patients not created equal
• Incentives for evidence-based medicine, care
coordination

May 2014
Minimum Thresholds
• Quality measures
• “Good citizenship” requirements (examples)
– Maintenance of Board certification
– Specialty-specific CMEs
– Use of Category II codes
– Use of registry
– Engagement with med management staff
– Committee participation/attendance
– Generic Rx utilization

May 2014
PCPs
• Incentives to effectively manage patient care
• Example: Allocation based on individual PCP’s
patient population’s actual total cost of care vs.
risk-adjusted target

May 2014
Specialists
• Incentives to provide high-quality care in cost-
effective manner
• Examples
– Value-based purchasing modifier (QRUR/MIPS)
– Risk-adjusted patient volumes
– Cost per episode of care

May 2014
Specialists
• Financial rewards for services to CIN
– Defining appropriate use criteria for referral to
specialists
– Specifying appropriate indications for diagnostic and
therapeutic interventions
– Establishing performance measures related to
specialty care
– Developing innovative solutions to enhance
communication between PCPs and specialists

May 2014
• Offset investment
• Offset declining revenues
Hospital

May 2014
Per Capita Medicare Spending

May 2014
Polling Question #3

May 2014
Martie Ross
Pershing Yoakley & Associates, PC
9900 W. 109th Street, Suite 130
Overland Park, KS 66210
913.232.5145
mross@pyapc.com

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