The latest Medicare Shared Savings Program payment model released by CMS may put you on the Advanced Alternative Payment pathway for MACRA’s Quality Payment Program, allowing you to take part in an Advanced APM with less risk as your practice makes the transition to value-based reimbursement.

Why the ACO Track 1+ Payment Model Is Worth Considering

The ACO Track 1+ Payment Model is a test of a new payment design under the Medicare Shared Savings Program (“MSSP”) that allows participants to ease into managing risk more cautiously than participants in the MSSP Track 2 or Track 3 models.  

The goal in creating the Track 1+ Model is to encourage more physician practices—especially small practices—to move towards value-based care while developing the ability to effectively manage risk. Hospitals, including small, rural hospitals, may also participate in Track 1+.

As you may recall, MACRA’s Quality Payment Program (“QPP”) requires physicians to choose one of two pathways for reporting performance metrics: The Merit-Based Incentive Payment System (“MIPS”) pathway, or the Advanced Alternative Payment Model (“APM”) pathway.  Of the two pathways, most providers will choose MIPS because they are not currently part of an Advanced APM. It’s a default choice for many providers who don’t know how to join an Advanced APM, or whether they even should. CMS estimates that 90% of providers will choose the MIPS pathway in MACRA’s first year of implementation.

However, with the release of this new model, physicians who participate in Track 1+ ACO may choose the QPP’s Advanced APM pathway instead of MIPS for reporting under the QPP.  This is an important option for physicians to consider, because selecting the APM pathway means physicians may add an additional 5% incentive payment to their Medicare reimbursement.

Feeling a bit behind on MACRA updates and what the pros and cons are for each track?

Click here to learn more about Advanced APMs and the positive and negative payment adjustments under MACRA.

What Is An Accountable Care Organization (ACO)?

As a reminder – an Accountable Care Organization (ACO) creates incentives for doctors, hospitals, and other healthcare providers to work across care settings to improve the quality of care patients receive while reducing the cost of care, in part by reducing unnecessary and ineffective treatments and interventions.  

The Medicare Shared Savings Program, established by CMS, rewards ACOs who meet quality of care standards while lowering healthcare costs.

Studies have shown that this coordination among providers does result in a higher quality of care for the patient and often costs less because there is no duplication of services and less waste of resources.

Risks and Benefits of Participation in the Medicare ACO Track 1+ Payment Model

According to CMS, Track 1+ ACOs can share in savings up to a maximum 50 percent shared savings rate based on quality performance. (In comparison, Track 2 has a 60 percent maximum savings rate and Track 3 has a 75 percent maximum savings rate.)  While the upside for success isn’t as high as Track 2 or Track 3, the downside risk is more limited, with a fixed 30 percent loss sharing rate.  Depending on the composition of the ACO (including such factors as whether rural hospitals are participants), the maximum loss limit will be capped at 8 percent of Medicare fee-for-service revenue or 4 percent of the updated historical benchmark.

CMS estimates an additional 70,000 providers will qualify for incentive payments under MACRA’s Advanced APM pathway through participating in the MSSP Track 1+ Payment Model.

How to Apply to be an MSSP Track 1+ ACO

Applicants must file a letter of intent to participate with CMS by May 31, 2017. New ACOs and existing Track 1 ACOs are eligible to participate, but those who are currently or previously enrolled in the Track 2, Track 3, Pioneer Model ACO or Next Generation Model ACO are not eligible. CMS is limiting an ACO’s participation in the Track 1+ Model to one full three-year agreement period.

Succeeding under MACRA

The new Track 1+ Medicare ACO is another path on the roadmap to success under MACRA and the transition to value-based payment. We’re helping our clients build the roadmap that makes the most sense for their practices. Read more from our series of articles on MACRA, take five minutes and complete our MACRA Readiness Assessment, or contact us to learn how we can help you.


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