Calendar Year (CY) 2023 Medicare Physician Fee Schedule Proposed Rule - Medicare Shared Savings Program Proposals

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) proposed rule that includes proposed changes to the Medicare Shared Savings Program (Shared Savings Program) to advance CMS’ overall value-based care strategy of growth, alignment, and equity.

Through the changes we are proposing in this proposed rule, we seek to reverse certain recent trends^[1],[2] in the Shared Savings Program: in recent years growth in the number of beneficiaries assigned to ACOs in the Shared Savings Program has plateaued; higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks; and access to ACOs appears inequitable as shown by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts.

Several of the proposals we are making in this proposed rule are expected to advance equity within the Shared Savings Program. Based on feedback from health care providers treating rural and underserved populations that they require upfront capital to make the necessary investments to succeed in accountable care and may also need additional time under a one-sided model before transitioning to performance-based risk, we are proposing to provide advance shared savings payments (referred to as advance investment payments) to low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, that are new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and that serve underserved populations. These advance investment payments would increase when more beneficiaries who are dually eligible for Medicare and Medicaid or who live in areas with high deprivation (measured by the area deprivation index (ADI)), or both, are assigned to the ACO, and these funds would be available to address the social and other needs of people with Medicare. We are also proposing other modifications to certain existing policies under the Shared Savings Program to support organizations new to accountable care by providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign their care processes to be successful under risk arrangements.

As we seek to increase the percentage of people with Medicare in accountable care arrangements, we are balancing incentives and participation options to serve a dual purpose of sustaining participation by existing ACOs and increasing program growth, recognizing that ACOs vary in their composition of providers/suppliers, the needs of the populations they serve, and have varying degrees of efficiency relative to their region and experience with accountable care initiatives. In this proposed rule, we are building on the existing Shared Savings Program benchmarking methodology by proposing modifications to strengthen financial incentives for long term participation by reducing the impact of ACOs’ performance on their benchmarks, to address the impact of ACO market penetration on regional expenditures used to adjust and update benchmarks, and to support the business case for ACOs serving high-risk and high dually eligible populations to participate, which will help sustain participation and grow the program. Additionally, we are proposing modifications to the benchmarking methodology to mitigate bias in regional expenditure calculations that benefits ACOs electing prospective assignment. The changes we are proposing to the benchmarking methodology used in the Shared Savings Program would align with our consideration of the more long-term benchmarking concepts that would move toward the use of administratively set benchmarks in order to grow and sustain long term program participation as discussed in the related Request for Information (RFI). We are also proposing to expand opportunities for certain low revenue ACOs participating in the BASIC track to share in savings even if they do not meet the minimum savings rate (MSR) to allow for investments in care redesign and quality improvement activities among less capitalized ACOs.

We are proposing changes to the quality reporting and the quality performance requirements that are responsive to interested parties’ feedback, and designed to support transition of ACOs to all payer quality measure reporting. These proposals include reinstitution of a sliding scale reflecting an ACO’s quality performance for use in determining shared savings for ACOs, regardless of how they report quality data, and to revise the approach for determining shared losses for ENHANCED track ACOs. We are proposing to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. We are also proposing to implement a health equity adjustment to an ACO’s quality performance category score to recognize high quality performance by ACOs with high underserved populations. We are proposing benchmarking policies to establish quality measure benchmarks and minimum attainment level for the CMS Web Interface measures for performance years 2022, 2023 and 2024 under the Shared Savings Program.

Many of these proposals are the result of our efforts to align policies under the Shared Savings Program and under the Center for Medicare and Medicaid Innovation’s (Innovation Center) ACO models. For example, the proposed advance investment payments are derived from learnings from the ACO Investment Model (AIM), an Innovation Center model that tested the effects of making advanced payments of shared savings to certain ACOs participating in the Shared Savings Program. This proposal to incorporate advance investment payments into the Shared Savings Program payment methodology is an example of how our larger ACO strategy of having the Innovation Center test new payment and service delivery models on the Shared Savings Program “chassis” can better harmonize policies across Medicare ACO initiatives and enable us to scale any findings.

CMS is also seeking comment on an alternative approach to calculating ACO historical benchmarks that would use administratively set benchmarks that are decoupled from ongoing observed FFS spending including the design of a potential approach, as described in the RFI. CMS has observed that the benchmarking methodology for the Shared Savings Program and Innovation Center models may include ratchet effects that reduce benchmarks for successful ACOs and jeopardizes their continued participation over multiple agreement periods, resulting in selective participation (including limited participation by inefficient ACOs). The RFI seeks to gather information regarding a potential alternative approach to calculating ACO historical benchmarks that would use administratively-set benchmarks that are decoupled from ongoing observed FFS spending.

Finally, we are proposing changes that are important for improved operations of the Shared Savings Program, including policies to reduce ACO administrative burden as part of our efforts to balance reducing administrative burden on ACOs with our continued focus on program integrity. While ACOs would continue to have to comply with marketing material requirements, we are proposing to eliminate the requirement for an ACO to submit marketing materials to CMS for review and approval prior to disseminating, and modifications to streamline the SNF 3-day rule waiver application review process. We are also proposing modifications to the beneficiary notification requirements including to reduce the frequency with which beneficiary information notices are provided to beneficiaries from annually to a minimum of once per agreement period, with a proposed follow-up beneficiary communication serving to promote beneficiary comprehension of the standardized written notice. Further, we are proposing to update data sharing regulations to add that ACOs acting as organized health care agreements (OHCAs) may request aggregate reports and beneficiary-identifiable claims data from CMS, and indicate ACOs may choose to structure themselves as OHCAs in order to reduce burden with reporting eCQMs/MIPS CQMs.

This fact sheet summarizes the major proposed changes to the Shared Savings Program that are included in the CY 2023 PFS proposed rule, and select issues on which we seek comment. There will be a 60-day public comment period on this proposed rule. CMS encourages all interested members of the public, including ACOs, providers, suppliers, and Medicare beneficiaries to submit comments so that CMS can consider them as we develop the final rule. The 60-day comment period closes on Sept 6, 2022. Comments can be submitted at: https://www.regulations.gov/ (in commenting please refer to file code CMS-1770-P).

Increasing Participation in Accountable Care Models in Underserved Communities by Providing an Option for Advance Investment Payments to Certain ACOs

Advance Investment Payments

Given the positive results from the Innovation Center’s AIM, and based on our experience with this model, we are proposing to incorporate an option into the Shared Savings Program to make advance shared savings payments to certain ACOs. The expectation is that this proposal, if finalized, would be an opportunity for many providers in rural and other underserved areas to join together as ACOs, building the infrastructure needed to succeed in the program, and promote equity by holistically addressing patient needs, including social needs. Under the proposed approach, an eligible ACO that is new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and identified as being low revenue and inexperienced with performance-based risk Medicare ACO initiatives, may receive a one-time fixed payment of $250,000 and quarterly payments for the first two years of the 5-year agreement period. Quarterly payments would be based on a score set to 100 if the beneficiary is dually eligible for Medicare and Medicaid or set to the ADI national percentile rank (an integer between 1 and 100) of the census block group in which the beneficiary resides if the beneficiary is not dually eligible, with higher payment amounts for assigned beneficiaries with a higher risk factors-based score. Payments would be capped at 10,000 assigned beneficiaries. The advance investment payments would be recouped once the ACO begins to achieve shared savings in their current agreement period and in their next agreement period, if a balance persists. If the ACO doesn’t achieve shared savings, we would not recoup the funding, except if the ACO terminates during the agreement period in which it received the advance investment payments. Under the proposed approach, ACOs must use advance investment payments to improve health care provider infrastructure, increase staffing, or provide accountable care for underserved beneficiaries, which may include addressing social needs. ACOs would also publicly report on their website the amount of any advance investment payments and the actual amount spent in each of the spend plan categories. We propose the initial application cycle to apply for advance investment payments will occur during CY 2023 for a January 1, 2024, start date.

Smoothing the Transition to Performance-Based Risk

For agreement periods beginning on January 1, 2024, and in subsequent years, we are proposing to allow ACOs inexperienced with performance-based risk to participate in one 5-year agreement under a one-sided shared savings model only by entering the BASIC track’s glide path and remaining in Level A for all 5 years. These ACOs may be eligible for a second agreement period within the BASIC track’s glide path, with 2 additional years under a one-sided model for a total of 7 years before transitioning to two-sided risk. For performance years beginning January 1, 2023, and in subsequent years, we are proposing to allow ACOs currently participating in Level A or B the option to elect to continue in their current level of the BASIC track glide path for the remainder of their agreement.

For agreement periods beginning on January 1, 2024, and in subsequent years, we are proposing to remove the limitation on the number of agreement periods an ACO can participate in Level E of the BASIC track; participation in the ENHANCED track would be optional.

This proposal is responsive to interested parties’ concerns that particularly smaller providers in rural and underserved settings need additional time to transition to two-sided risk, and that quickly forcing providers to adopt two-sided risk models was a barrier to participation in the Shared Savings Program.

Strengthening Program Participation by Reducing the Effect of ACO Performance on Historical Benchmarks, Addressing Market Penetration, Strengthening Incentives for ACOs Serving Medically Complex and High Cost of Care Populations

The following proposals ensure rebased benchmarks remain accurate and serve as a reasonable baseline, when benchmark years correspond to performance years of the ACO’s preceding agreement period, requiring ACOs to continually beat their own performance;  address a single ACO’s or multiple ACOs’ collective effects on their own regional expenditures, which are used to calculate the regional adjustment and regional portion of the trend and update factors; and   ensure the benchmarking methodology results in benchmarks of sufficient value to encourage program entry and continued participation by ACOs, ACO participants, and ACO providers/suppliers serving medically complex, high cost populations, and to address selective participation in the program by ACOs, and ACO participants, and ACO providers/suppliers resulting from the program’s benchmarking methodology.

We propose a combination of policies to ensure a robust benchmarking methodology that would reduce the effect of ACO performance on ACO historical benchmarks and increase options for ACOs caring for high-risk populations, specifically to: 1) modify the methodology for updating the historical benchmark to incorporate a prospective, external factor, 2) incorporate a prior savings adjustment in historical benchmarks for renewing and re-entering ACOs, and 3) reduce the impact of the negative regional adjustment. We believe these proposed modifications could serve as “stepping stones” to a longer-term approach to the benchmarking methodology, and they are designed to be consistent with the potential approach for incorporating a methodology for administratively set benchmarks, which is described in the related RFI.

These proposed changes, and the other proposed changes to the Shared Savings Program’s benchmarking methodology within this proposed rule, would be applicable to establishing, updating, and adjusting the benchmark for agreement periods beginning on January 1, 2024, and in subsequent years.

Incorporating a Prospective, External Factor in Growth Rates Used to Update the Historical Benchmark 

We are proposing to incorporate a prospectively projected administrative growth factor, a variant of the United States Per Capita Cost (USPCC) referred to in this proposed rule as the Accountable Care Prospective Trend (ACPT), into a three-way blend with national and regional growth rates to update an ACO’s historical benchmark for each performance year (PY) in the ACO’s agreement period. Incorporating this prospective trend in the update to the benchmark would insulate a portion of the annual update from any savings occurring as a result of the actions of ACOs participating in the Shared Savings Program and address the impact of increasing market penetration by ACOs in a regional service area on the existing blended national-regional growth factor.

A three-way blend would be calculated as the weighted average of the ACPT (one-third) and the existing national-regional blend (two-thirds) for use in updating an ACO’s historical benchmark between benchmark year (BY) 3 and the PY. The ACPT would be projected by the CMS Office of the Actuary (OACT) and would be a modification of the existing FFS USPCC growth trend projections used annually for establishing Medicare Advantage rates, excluding indirect medical education (IME), and disproportionate share hospital (DSH) payments, and the proposed new supplemental payment for Indian Health Service (IHS)/Tribal Hospitals and hospitals located in Puerto Rico, and including payments associated with hospice claims to be consistent with Shared Savings Program’s expenditure calculations.

We are proposing to set the ACPT growth factors for the ACO’s entire 5-year agreement period near the start of the agreement period. The ACPT factors would remain unchanged throughout the ACO’s agreement period, providing a degree of certainty to ACOs. We are proposing a “guardrail” to provide protection for ACOs from larger shared losses (or potentially from the negative implications of financial monitoring) based on an updated benchmark computed using the proposed three-way blend than the current national-regional blend. This guardrail would not apply to any shared savings calculation. CMS would also retain flexibility to reduce the impact the prospectively determined ACPT portion of the three-way blend if unforeseen circumstances occur during an ACO’s agreement period.

Adjusting ACO Benchmarks to Account for Prior Savings 

We are proposing to incorporate an adjustment for prior savings that would apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs, that were reconciled for one or more performance years in the three years preceding the start of their agreement period. Such an adjustment would help to mitigate the rebasing ratchet effect on an ACO’s benchmark by returning to an ACO’s benchmark an amount that reflects its success in lowering growth in expenditures while meeting the program’s quality performance standard in the performance years corresponding to the benchmark years for the ACO’s new agreement period. Furthermore, we believe that returning dollar value to benchmarks through a prior savings adjustment could help address an ACO’s effects on expenditures in its regional service area that result in reducing the regional adjustment added to the historical benchmark. Overall, this proposal would help ensure that high performing ACOs have incentives to remain in the program for the long-term. CMS would adjust an ACO’s benchmark based on the higher of either the prior savings adjustment or the ACO’s positive regional adjustment. We would also use a prior savings adjustment to offset negative regional adjustments for ACOs that are higher spending compared to their regional service area.

Reducing the Impact of the Negative Regional Adjustment

We propose to institute two policy changes designed to limit the impact of negative regional adjustments on ACO historical benchmarks and further incentivize program participation among ACOs serving high cost beneficiaries. We propose to reduce the cap on negative regional adjustments from negative 5% of national per capita expenditures for Parts A and B services under the original Medicare FFS program in BY3 for assignable beneficiaries to negative 1.5%. We also propose that after the cap is applied to the regional adjustment, to gradually decrease the negative regional adjustment amount as an ACO’s proportion of dual eligible Medicare and Medicaid beneficiaries increases or its weighted-average prospective HCC risk score increases.

Calculating County FFS Expenditures to Reflect Differences in Prospective Assignment and Preliminary Prospective Assignment with Retrospective Reconciliation

Under the current benchmarking methodology, CMS uses risk adjusted county-level FFS expenditures, determined based on expenditures for assignable beneficiaries identified for the 12-month calendar year corresponding to the relevant benchmark or performance year, to calculate factors based on regional FFS expenditures used in establishing, adjusting and updating the ACO’s historical benchmark. We have observed that this approach creates a systematic bias in the calculations using county-level expenditures that favors ACOs under prospective assignment. To remove the favorable bias and bring greater precision to the calculation of factors based on regional FFS expenditures, we are proposing to calculate risk adjusted regional expenditures using county-level values computed using an assignment window that is consistent with an ACO’s assignment methodology selection for the performance year. That is, for ACOs selecting prospective assignment, we would use an assignable population of beneficiaries that is identified based on the offset assignment window (for example, October through September preceding the calendar year) and for ACOs selecting preliminary prospective assignment with retrospective reconciliation, we would continue to use an assignable population of beneficiaries that is identified based on the calendar year assignment window. To facilitate modeling of the proposed changes, CMS is making available, through the Shared Savings Program website at www.cms.gov/sharedsavingsprogram/ the following data files:  risk adjusted county-level FFS expenditures for 2018-2020 calculated based on an assignable population identified using an offset assignment window; and data files with ACO-specific information on the applicable assignment methodology for the corresponding years.

Improving the Risk Adjustment Methodology to Better Account for Medically Complex, High Cost Beneficiaries and Guard Against Coding Initiatives

Currently, for ACOs in agreement periods beginning on or after July 1, 2019, we use prospective HCC risk scores to adjust the ACO's historical benchmark at the time of reconciliation for a performance year to account for changes in severity and case mix for the ACO's assigned beneficiary population between BY3 and the performance year, subject to a cap of positive 3% for the agreement period (referred to herein as the “3% cap”). Currently, the 3% cap is applied separately for the population of beneficiaries in each Medicare enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries). That is, any positive adjustment between BY3 and any performance year in the agreement period cannot be larger than 3 percent for any Medicare enrollment type.

We are proposing to modify the existing 3% cap on positive prospective HCC risk score growth, such that an ACO’s aggregate prospective HCC risk score would be subject to a cap equal to the ACO’s aggregate growth in demographic risk scores between BY3 and the performance year plus 3 percentage points. In other words, we would calculate a single aggregate value for the cap equal to the dollar-weighted average growth in demographic risk scores across the four enrollment types plus 3 percentage points. We would only apply this cap to prospective HCC risk score growth for a particular enrollment type if the aggregate growth in prospective HCC risk scores, calculated as the dollar-weighted average growth in prospective HCC risk scores across the four enrollment types, exceeds the value of the cap. We believe that these changes to the risk adjustment methodology would address several of the concerns raised by interested parties: account for higher volatility in risk scores for certain enrollment types due to smaller sample sizes; allow for higher benchmarks than the current methodology for ACOs that care for larger proportions of beneficiaries in dually eligible, disabled and ESRD enrollment types (which are more frequently subject to the cap on risk score growth currently); and continue to safeguard the Trust Funds by limiting returns from coding initiatives.

Increased Opportunities for Low Revenue ACOs to Share in Savings

We are proposing to expand the eligibility criteria to qualify for shared savings for agreement periods beginning on January 1, 2024, and in subsequent years, to enable certain low revenue ACOs participating in the BASIC track to share in savings even if the ACO does not meet the minimum savings rate (MSR) requirement. Eligible ACOs that meet the quality performance standard required to share in savings at the maximum sharing rate would receive half of the maximum sharing rate for their level of participation (20% instead of 40% under Levels A and B, and 25% instead of 50% under Levels C, D, and E). For eligible ACOs that do not meet the quality performance standard required to share in savings at the maximum sharing rate but meet the proposed alternative quality performance standard, the sharing rate would be further adjusted according to proposed sliding scale approach for determining shared savings. The proposed approach would provide payments to ACOs with the greatest need for shared savings, in particular smaller, rural ACOs which tend to be less capitalized, allowing for investments in care redesign and quality improvement activities. This modification would also align with the other changes we are proposing to encourage participation by new ACOs and ACOs that focus on underserved populations, such as the proposal to offer advance investment payments to new low revenue ACOs joining the BASIC track.

Ongoing Consideration of Concerns About the Impact of the Public Health Emergency (PHE) for COVID-19 on ACOs’ Expenditures

CMS’s analysis of current data indicates that ACOs exhibiting sharp declines in spending in 2020 tend to show rebounds in spending in 2021 such that historical benchmarks averaged across a base period including both 2020 and 2021 would appear to represent a reasonable basis from which to update ACO spending targets going forward. The proposal described in this proposed rule to utilize a three-way blend of the ACPT / national-regional growth rates to update benchmarks would further mitigate any potential adverse effects of the PHE for COVID-19 on historical benchmarks while also protecting against unanticipated variation in performance year expenditures and utilization resulting from a future PHE. We will continue to monitor the impact of the PHE for COVID-19 to determine whether any further changes may be necessary to account for the effects of this PHE or future PHEs.

Proposed New Supplemental Payment for Indian Health Service and Tribal Hospitals and Hospitals Located in Puerto Rico  

As described in the Fiscal Year (FY) 2023 Medicare Hospital Inpatient Prospective Payment Systems (IPPS) / Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) proposed rule (87 FR 28396 through 28398), we are proposing to use our exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to establish new supplemental payments for Indian Health Service (IHS)/Tribal hospitals and hospitals located in Puerto Rico, beginning in FY 2023. Consistent with our policy that excludes disproportionate share hospital and uncompensated care payments from ACO benchmark year expenditures and performance year expenditures, we propose to exclude the proposed new supplemental payments for IHS/Tribal Hospitals and hospitals located in Puerto Rico  from the determination of Medicare Parts A and B expenditures for purposes of calculations under the Shared Savings Program and include the proposed new supplemental payment to IHS/Tribal hospitals and hospitals located in Puerto Rico  in Shared Savings Program calculations of ACO participant revenue. These proposed updates would be applicable for performance years beginning on January 1, 2023, and in subsequent years, if finalized.

Alternative Options for Addressing Concerns About the Effect of an ACO’s Assigned Beneficiaries on Regional FFS Expenditures in Establishing, Adjusting, Updating, and Resetting the ACO’s Historical Benchmark

Interested parties have suggested that including an ACO’s assigned beneficiaries in the determination of the ACO’s regional expenditures results in relatively lower benchmarks for ACOs, particularly ACOs with high market penetration. We believe the set of benchmarking policies proposed would effectively address these concerns. For example, the proposed inclusion of the ACPT in the growth rates used to update the benchmark based on a three-way blend would reduce the impact of the ACO’s own assigned beneficiaries in the regional component of the blend. Under the proposal to use the higher of the prior savings adjustment or positive regional adjustment, the proposed prior savings adjustment could increase the historical benchmark for an ACO whose regional adjustment could have been decreased by the inclusion of its own assigned beneficiaries in the regional expenditure calculation. While we believe the proposals included in this proposed rule (updating the benchmark using a three-way blend that includes the ACPT, adjusting the benchmark for prior savings, and reducing the impact of the negative regional adjustment) address interested parties’ concerns while avoiding adverse incentives, we are seeking comment on alternative benchmarking policies – a) exclude the ACO’s own assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations, b) expand the definition of the ACO regional service area to use a larger geographic area to determine regional FFS expenditures, or c) both – in order to provide interested parties the opportunity to consider the merits of those alternatives relative to the package of policies we are proposing.

Transitioning ACOs to All Payer Quality Measure Reporting, Adjusting for Health Equity, and Addressing Social Determinants of Health

Proposal to Use a Sliding Scale Approach for Determining Shared Savings and Scaled Losses Beginning in Performance Year 2023 and Extend the Incentive for Reporting eCQMs/MIPS CQMS for Performance Year 2024

Beginning on January 1, 2023, and subsequent years, we are proposing to change the all-or-nothing approach to determining an ACO’s eligibility for shared savings based on quality performance to allow for scaling of shared savings rates for ACOs that fall below the 30th/40th percentile quality standard threshold required to share in savings at the maximum sharing rate, but who meet minimum quality reporting and performance requirements. Under the proposal, an ACO’s quality score for a performance year and the determination of whether the ACO met the Shared Savings Program quality performance standard would affect the determination of shared savings for that performance year and, for ACOs participating in the ENHANCED track, the amount of any shared losses owed. We are proposing that, beginning with performance year 2023 and for subsequent performance years, if an ACO fails to meet the existing criteria under the quality performance standard to qualify for the maximum sharing rate but the ACO achieves a quality performance score equivalent to or higher than the 10th percentile of the performance benchmark on at least one of the four outcome measures in the APP measure set then the ACO would share in savings (if otherwise eligible) at a lower rate that reflects the ACO’s quality performance category score. The intent of this proposal is to lead to more predictable savings, avoid a cliff whereby small differences in quality scores would lead to elimination of all shared savings, and to promote quality improvement to drive high-quality care for all people with Medicare that receive care at ACOs.

Additionally, we are proposing to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option and allow ACOs an additional year to gauge their performance on the eCQM/MIPS CQMs before full reporting of the measures are required beginning in performance year 2025.

Proposal to Implement a Health Equity Adjustment

We are proposing to implement a health equity adjustment of up to 10 bonus points to an ACO’s MIPS quality performance category score when reporting all-payer eCQMs/MIPS CQMs and based on (1) high quality measure performance and (2) providing care for a higher proportion of underserved or dually eligible beneficiaries. We propose to use the area deprivation index (ADI) score and Medicare and Medicaid dually eligible status to assess underserved populations which would allow capturing of broader neighborhood level and individual beneficiary characteristics. The proposal would add bonus points to the ACO’s MIPS quality performance category score if the ACO scores in the top third or middle third of performance for each quality measure. This proposal would only positively impact ACOs and not penalize them.

This proposal represents one of the first that would promote equity in a value-based care program, while simultaneously avoiding the pitfalls of other pay-for-equity type approaches. This health equity adjustment would not risk adjust away disparities (thereby masking them), and does not set lower quality standards for underserved populations— rather, this proposal would reward those providers who provide excellent care for underserved populations. Because the upside-only reward would only go to those providers who serve a minimum percentage of underserved populations, this means that there would also be greater incentive to care for underserved populations. This proposal would also address concerns raised by interested parties that in the switch to all-payer eCQMs/ MIPS CQMs that those providers who treat a higher proportion of underserved populations would receive lower quality scores and lower shared savings or higher shared losses as a result. This proposal also operates synergistically with the proposal to revise the all-or-nothing approach to one of a sliding scale, in that it would possibly lead to higher shared savings or reduced shared losses for a broader array of ACOs treating underserved populations.

Addressing MIPS Quality Performance Category Score Corrections in the Shared Savings Program’s Reopening Authority

In this proposed rule, we are also clarifying that the Shared Savings Program will reopen an ACO’s initial determination to correct errors in the MIPS quality performance category score identified through the MIPS targeted review process. In the event that we learn of errors in the calculation of MIPS quality performance category scores (from a MIPS targeted review or some other MIPS quality performance category score-related corrections) that change the percentile score an ACO must achieve in order to meet the quality performance standard, we would exercise our discretion to reopen the initial determination of an ACO’s financial performance for good cause to correct errors in the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO due to the miscalculation of MIPS quality performance category scores. We have requested comment on the clarification of when we would exercise our discretion to reopen for good cause.

Clarifying the Use of Unweighted MIPS Quality Performance Category Scores for Quality Performance Standard Determinations under the Shared Savings Program

Historically, we have used the unweighted distribution of quality performance category scores submitted by ACOs, groups, and individuals to calculate benchmarks for quality measure performance under MIPS and the Shared Savings Program. We are clarifying that we use the submission level MIPS quality performance category scores (unweighted distribution of scores) to determine the 30^th percentile and 40^th percentile MIPS quality performance category scores for purposes of establishing the applicable quality performance standard under the Shared Savings Program. We are also clarifying that we use an ACO’s submission, which is considered the unweighted distribution of quality performance category scores, to calculate its MIPS quality performance category score for purposes of determining whether the ACO meets the quality performance standard under the Shared Savings Program in performance year 2021 and subsequent performance years, which is consistent with our original intended methodology of using the unweighted distribution based on submission data.

Proposed Benchmarking Policies for CMS Web Interface Measures for Performance Years 2022, 2023, and 2024

In the CY 2022 PFS final rule, we extended the CMS Web Interface as a collection type for performance years 2022, 2023 and 2024 for Shared Savings Program ACO’s reporting under the APP, however, the benchmarking policies under § 425.502(b) that were used to establish quality measure benchmarks in the Shared Savings Program prior to the development and implementation of the APP were sunset with the 2020 performance year. In this proposed rule, we are proposing to amend the regulation at § 425.512, which governs the ACO quality performance standard for performance years beginning on or after January 1, 2021, to include a new paragraph (a)(6), which will provide that for performance years 2022, 2023, and 2024, CMS designates a performance benchmark and minimum attainment level for each CMS Web Interface measure and establishes a point scale for the measure as described in § 425.502(b). In addition, we are proposing to use the approach to set flat percentage benchmarks for the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) measure and score the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) measure using flat percentage benchmarks for performance year 2022.

Social Determinants of Health Measure and Addition of New Consumer Assessment of Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive Payment System (MIPS) Survey Questions Requests for Information (RFIs)

In order to further address health equity as it relates to quality measurement, we also have a request for information on the use of two social determinants of health (SDOH) eCQM/MIPS CQM outcome-oriented measures for ACOs, which would assess providers on the percentage of individuals screened for social needs (done in conjunction with CCSQ), and inclusion of CAHPS for MIPS survey questions specific to discrimination and price transparency. These SDOH eCQM/MIPS CQMs are identical to those proposed as part of the Inpatient Prospective Payment System (IPPS) Proposed Rule for Hospital Inpatient Quality Reporting (IQR), demonstrating alignment across quality programs.

Reducing Administrative Burden for ACOs

Marketing Materials

We are proposing to remove the requirement for ACOs to submit marketing materials for CMS review prior to use. This change would be effective for performance years beginning January 1, 2023, and for subsequent years. CMS is balancing a desire to reduce administrative burden of ACOs with our continued focus on program integrity. ACOs would continue to have to comply with marketing material requirements and CMS maintains its ability to review marketing materials upon request. We would also maintain our requirements regarding the content of marketing materials and our ability to issue a compliance action if a marketing material is out of compliance in the future.

Beneficiary Notifications

We believe it is important to educate beneficiaries on the benefits of value-based care and are planning to work with consumer advocates and interested parties to develop and implement strategies to effectively communicate the benefits of value-based care to Medicare beneficiaries, including improving Medicare & You content. We also recognize that the current requirement for ACOs to notify beneficiaries annually has created unintended burden and confusion, as reported by ACOs. We are proposing to modify the requirement for ACOs to provide a beneficiary notice prior to or at the first primary care service visit annually to providing the notice prior to or at the first primary care service visit once per agreement period, with a follow-up beneficiary communication taking place within 180 days after the beneficiary notice is provided, effective for performance years beginning January 1, 2023 and in subsequent years. The goal of this follow-up beneficiary communication is to promote beneficiary comprehension around the standardized written notice by ensuring they understood its content and providing an opportunity for beneficiaries to ask any outstanding questions they may have.

We are also proposing to further clarify our current policy that all ACO participant practices and facilities need to post signs notifying beneficiaries of their participation in an ACO, what it means for their care, and their ability to decline claims data sharing and voluntary align to their primary clinicians. We also note that our current regulations require practices and facilities providing primary care services to make the individual notice available upon request.

We seek comment on the proposed frequency of the notification and whether our proposal would reduce net burden and mitigate any potential beneficiary confusion.

SNF 3-day Rule Waiver Application

In prior rulemaking we removed requirements for applicants to provide narratives during the application process in an effort to reduce burden. Similarly, based on our prior experience, we propose to remove the requirement for ACOs applying for the SNF 3-Day Rule Waiver to provide narratives describing its communication plan, care management plan, and beneficiary evaluation and admission plan. For performance years beginning January 1, 2024, and subsequent years, we propose to require ACOs to submit attestations that they have established the relevant plans.

Data Sharing

We are proposing to update data sharing regulations to add that ACOs acting as organized health care agreements (OHCAs) may request aggregate reports and beneficiary-identifiable claims data from CMS, and indicate ACOs may choose to structure themselves as OHCAs in order to reduce burden with reporting eCQMs/MIPS CQMs. This is proposed to be effective for performance years beginning January 1, 2023, and subsequent years.

Updates to ACO Beneficiary Assignment Methodology

We are proposing revisions to the definition of primary care services that are used for purposes of beneficiary assignment including to incorporate new prolonged services codes and new chronic pain management codes to ensure that the Shared Savings Program assignment methodology remains consistent with billing and coding guidelines. These proposed changes would be applicable for the performance years starting on January 1, 2023, and in subsequent years.

We are also proposing to modify our approach for identifying facilities, such as Federally Qualified Health Centers, Rural Health Clinics, Electing Teaching Amendment hospitals, and Method II Critical Access Hospitals, identified by CMS Certification Numbers (CCNs) on ACO participant lists used to assign beneficiaries, to account for changes in CCN enrollment during the performance year. These proposed updates would be applicable for the performance year starting on January 1, 2023, and subsequent performance years.