MACRA Final Rule: What is the ACO Track 1+?

In our blog last week on the October 14, 2016 MACRA Final Rule with Comment Period (Final Rule), we began a series on topics of interest from the Final Rule, particularly those representing departures from the Proposed Rule, to summarize the decision in the Final Rule.

MACRA repealed the much maligned Sustainable Growth Rate (SGR) formula and replaced it with the Quality Payment Program, made up of two avenues to reward delivery of high quality patient care: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs).

CMS considers APMs to be an important step in moving toward value-based care. Certain APMs can qualify as Advanced APMs by assuming sufficient downside financial risk, and participants in Advanced APMs can become Qualifying APM Participants (QPs), eligible to earn incentive payments. However, because of the limited number of Advanced APMs and the criteria to become a QP, CMS initially estimated only 30,000 to 90,000 QPs in 2017, leaving many others to be paid under MIPS in the first payment year of 2019.

In responding to comments related to APMs, CMS announced in the Final Rule that it is exploring a new Medicare ACO Track 1+ Model to begin in 2018. The Track 1+ model would be voluntary for ACOs currently in Track 1 of the Medicare Shared Savings Program (MSSP) or ACOs planning to participate in the MSSP for the first time. It would incorporate more limited downside risk than Tracks 2 or Track 3 of the MSSP, but have sufficient downside financial risk to qualify as an Advanced APM. Because a majority of ACOs still participate in the one-sided model, CMS is exploring how to move ACOs to performance-based risk more rapidly, and Track 1+ is intended to encourage faster progression, as CMS terms, “an on-ramp to Tracks 2 or 3.”

CMS is also proposing amendments to other programs not considered Advanced APMs in the Proposed Rule, such as the Comprehensive Care for Joint Replacement (CJR) bundled payment model. As a result of changes such as these, CMS expects higher numbers of QPs in the range of 70,000 to 120,000 in 2017 and 125,000 to 250,000 in 2018.

Physicians and hospital administrators we know who fully understand MACRA are rightfully concerned about the long-term implications of reimbursement under the MIPS program, so opportunities to qualify for Advanced APMs should be on your radar. CMS plans to announce additional information about the Track 1+ Model in the future. Hospitals and physician groups with ACOs or plans to enter the ACO space should watch these developments very carefully.

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