To whom do these decisions apply?
While all ACOs have to make participant and track decisions, this section will analyze specific ACO profiles which can make use of the insights included above: High-Revenue Legacy MSSPs, Small ACOs, High-Revenue Basic E, ACOs who missed their MSR, and ACOs who likely won’t benefit from the AAPM bonus.
High-Revenue Legacy MSSPs
High-revenue, Legacy MSSP in risk-bearing tracks face the transition to ENHANCED in 2022 – unless they can change to low-revenue status and select Basic E.
For these ACOs in particular, the “High / low revenue contribution by TIN” (see Figure 3) metric calculates the revenue vs benchmark contribution by provider and can be used to ensure they end up with a low revenue status. It’s important both for identifying an ACO’s current participants for removal and for scanning an ACO’s geography for compatible participants to add.
For smaller ACOs hovering close to the minimum number of beneficiaries, adding participant TINs would help the ACO stay well above the 5,000 bene minimum and spread the PBPY risk exposure.
The “Attributable benes by TIN” metric (see Figure 3) identifies the number of lives that could be added by scanning the surrounding geography for compatible potential participants. It does this by recreating CMS’s MSSP attribution and assignment rules. As a side benefit, it also tells us how many lives existing participants are attributing. For ACOs wanting to stay in BASIC Levels A or B, having more lives also drives down the MSR, making it easier to bring in net savings.
High-Revenue, BASIC E
High-revenue ACOs in the BASIC Level E track have an opportunity to reduce their risk exposure and repayment mechanism amount by strategically selecting TINs that have lower revenue contribution.
The “High / low revenue contribution by TIN” metric (see Figure 3) calculates the revenue vs expenditure by each participant provider and allows ACO leaders to strategically select their participants and reduce risk exposure and repayment mechanism amount.
ACOs that did not reach their MSR
For ACOs who earned savings for CMS in the past without reaching the MSR, there are ways to improve one’s chances of receiving a check for 2022: strategic TIN selection, moving to a higher risk track, adding beneficiaries (for Tracks A & B).
Figure 8: Contribution to Shared Savings by Practice
Strategic TIN selection can help ACOs improve their performance and reach their MSR. The metrics “Likelihood of savings by TIN” and “Regional efficiency by TIN” (see Figure 3) can be used to increase ACO leaders’ confidence in 2022 performance through strategic TIN selection in order to overcome one’s MSR; risk-bearing tracks BASIC Level C-E and ENHANCED don’t have the same MSR hurdles as BASIC Levels A/B. As represented in Figure 8, Validate Health’s nationwide study found that the majority of ACOs have high variance in shared savings contribution by provider.
If ACO leaders can gain enough confidence to move to Level E or ENHANCED, it’s possible that the gain from the 5% AAPM bonus will be greater than the projected loss associated with increased risk exposure. Restated, it is possible that the margin of projected downside risk will be absorbed by the gain of the AAPM bonus. This decision could be informed by the “QP threshold contribution by TIN” metric (see Figure 3) and related estimates of AAPM vs MIPS payments. Additionally, some ACOs choose to add aggregate reinsurance as another way to find the right level of risk tolerance across their provider participants and other stakeholders.
For ACOs wanting to stay in BASIC Levels A or B, having more lives drives down the MSR, making it easier to bring in net savings. The “Attributable benes by TIN” metric (see Figure 3) identifies the number of lives an ACO could add by scanning their geography for compatible participants to add.
ACOs likely to benefit from AAPM bonus
Some ACOs can leverage the AAPM bonus to justify a decision to move to BASIC Level E.
Although going from lower risk BASIC Level A-D tracks to Level E increases risk exposure, once again, the gain from the 5% AAPM bonus could potentially outweigh the margin of projected loss.
This situation is demonstrated in Figure 9, the case study of an ACO deciding to move from BASIC Level B to Level E.
Figure 9: Impact to net savings moving from BASIC Level B to E
***Important note: The AAPM bonus is only guaranteed to be earned through 2022 for ACOs who meet the QP threshold.
The decision to select Level E could also be informed by the “QP threshold contribution by TIN” metric (see Figure 3) and related estimate of AAPM vs MIPS payments, as well as the probability distribution of payouts by track. As we’ve seen in examples throughout this paper, ACOs can gain additional benefits from higher risk tracks, such as MSR reduction and improved sharing rate.
ACOs can increase their confidence in taking on higher risk by using the metrics “Likelihood of savings by TIN” and “Regional efficiency by TIN” during TIN selection. Again, Validate Health’s nationwide study found that the majority of ACOs have high variance in shared savings contribution by provider.
While some of the same benefits could be gained by moving to ENHANCED instead of Level E, the risk associated with unfavorable benchmark rebasing might make this option unattractive.
Whatever their particular situation, it is imperative that every ACO carefully consider the metrics discussed above before making their participant and track selection decisions this year in order to maximize the potential to earn shared savings and avoid the probability of loss.
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This article aims to provide ACO leaders with valuable insights to optimize their participant and track selection for 2022 and earn shared savings. Unpacking ACO-level metrics into TIN-level metrics empowers ACO leaders to see tactics that may otherwise be hidden within higher-level performance figures – and ensure they’re not leaving money on the table or over-exposing themselves to risk.
Each year, Validate Health helps ACOs make optimal decisions for participant and track selection by providing granular actuarial modeling services and leveraging unique access to Medicare FFS claims data. For inquiries about the insights shared in this article, or any of Validate’s ACO-specific financial optimization services, please contact us on our website, validatehealth.com/contact.