Overview of the Shared Savings Program
As of January 1, 2024, the Medicare Shared Savings Program includes 480 Accountable Care Organizations (ACOs) with over 634,000 healthcare providers, covering more than 10.8 million beneficiaries—almost 50% of Traditional Medicare enrollees. Policy changes from previous rules (CY 2023 and CY 2024 PFS) are anticipated to significantly increase participation in the program, with up to four million additional beneficiaries expected to be assigned to ACOs over the next several years.
CMS aims to have 100% of Traditional Medicare beneficiaries in a value-based care arrangement by 2030, driving growth particularly in rural and underserved areas.
Major Changes in the CY 2025 PFS Rule
Prepaid Shared Savings Option
- CMS is finalizing a new “prepaid shared savings” option to help ACOs with a history of earning shared savings make investments that benefit beneficiaries.
- Eligible ACOs (those in Levels C-E of the BASIC track or the ENHANCED track with prior success) would receive quarterly payments, with at least 50% required to be spent on direct beneficiary services, such as meals, transportation, dental care, vision care, and hearing services. The remaining 50% could be used for staffing or healthcare infrastructure.
- ACOs would be expected to repay these advances through future earned shared savings, with a requirement to directly repay any outstanding balance if shared savings are not earned.
Health Equity Benchmark Adjustment (HEBA)
- To encourage ACOs to serve more beneficiaries from underserved communities, CMS finalized policies to establish a Health Equity Benchmark Adjustment (HEBA). This adjustment would be applied to an ACO’s historical benchmark based on the proportion of beneficiaries who are either enrolled in the Medicare Part D low-income subsidy (LIS) or dually eligible for Medicare and Medicaid.
- The adjustment aims to provide a financial incentive for ACOs to serve underserved populations and encourage practices in these areas to join or remain in the Shared Savings Program.
Alternative Payment Model (APM) Performance Pathway (APP) Plus Quality Measure Set
- CMS introduces the APP Plus quality measure set, aligning with the Adult Universal Foundation quality measures. This new set would incrementally expand from six to 11 measures between 2025 and 2028.
- 2025: Six measures – four electronic/MIPS/Medicare CQMs, one administrative claims measure, and the CAHPS for MIPS Survey.
- 2026: Eight measures – five electronic/MIPS/Medicare CQMs, two administrative claims measures, and the CAHPS for MIPS Survey.
- 2027: Nine measures – six electronic/Medicare CQMs, two administrative claims measures, and the CAHPS for MIPS Survey.
- 2028 or Later: Eleven measures – eight electronic/Medicare CQMs, two administrative claims measures, and the CAHPS for MIPS Survey, beginning in the year after eCQM specifications are available for Quality IDs 487 (Social Drivers of Health Screening) and 493 (Adult Immunization Status).
- ACOs would be required to report all measures annually, with a focus on electronic Clinical Quality Measures (eCQMs) and Medicare Clinical Quality Measures (CQMs). MIPS CQMs will be an available collection type for ACOs in performance years 2025 and 2026. For MIPS Quality performance category scores, ACOs will be evaluated on all required measures in the APP Plus quality measure set, following APP scoring policies. ACOs reporting Medicare CQMs will be assessed using flat benchmarks for the first two performance periods in MIPS.
- A Complex Organization Adjustment will also be introduced in 2025, providing points to Virtual Groups and APM Entities, including ACOs, that meet data requirements. This adjustment caps at 10% of available points in the MIPS Quality performance category, facilitating the shift to digital quality reporting.
Mitigating the Impact of Significant, Anomalous, and Highly Suspect (SAHS) Billing Activity
- CMS finalizes measures to exclude payment amounts associated with SAHS billing activity from expenditure and revenue calculations in the Shared Savings Program.
- This rule would provide greater certainty to ACOs that they will not be held accountable for billing activities beyond their control, thereby ensuring the integrity of the program.
Reopening ACO Payment Determinations
- New Calculation Methodology: When a payment determination is reopened, CMS will now adjust Shared Savings Program expenditures and payments to reflect improper payments identified after the standard claims run-out period or through aggregate overpayments.
- Benchmark Adjustments: If a payment determination is recalculated for a previous performance year, CMS will adjust the historical benchmark to account for improper payments.
- Reopening Requests: ACOs can now request CMS to reopen initial determinations of shared savings or losses, with specific guidance on the process forthcoming. CMS retains the discretion to decide whether to reopen any payment determinations.
Other Modifications to the Shared Savings Program
- Eligibility Requirements: CMS finalizes that ACOs must maintain at least 5,000 assigned beneficiaries throughout an agreement period, but will allow those that fall below this threshold until the time of renewal to meet the requirement.
- Beneficiary Assignment Methodology: CMS is revising the definition of “primary care services” for assigning Medicare FFS beneficiaries to Shared Savings Program ACOs, aligning it with changes in Medicare Physician Fee Schedule (PFS) policies. The updated definition now includes additional services such as safety planning interventions, post-discharge follow-up, virtual check-ins, advanced primary care management, and others. These revisions aim to enhance ACO participation by reducing administrative requirements for specific services. CMS is also expanding the exception to the voluntary alignment policy to include beneficiaries assigned to disease- or condition-specific ACO models in the CMS Innovation Center. These updates take effect for performance years beginning January 1, 2025.
- Beneficiary Notification Requirements: CMS finalizes their proposal to simplify follow-up communication requirements for ACOs, allowing them to provide the follow-up within 180 days of the original notification rather than at the next primary care visit.
For any questions on the ever-evolving policies affecting ACOs or the Shared Savings Program, please contact Kelly Conroy or Daniela Yusufbekova.
