December 2018

In the 2019 Medicare Physician Fee Schedule (MPFS) final rule published on November 23, CMS published new policies for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP). Specifically, CMS adopted certain “stop-gap” rule changes that will permit ACOs whose MSSP participation is scheduled to end in 2018 to continue participation under existing rules until June 30, 2019, while the agency considers comments on its original proposal. The publication of this final rule may forecast some additional significant changes to the MSSP program still pending at CMS, including a program redesign, the “Pathways to Success” program, which was proposed by the Agency on August 17, 2018 and is currently under review by the White House.

The stop-gap measures in the 2019 Physician Fee Schedule (PFS) final rule address a subset of the proposals contained in the August 17, 2018 Pathways to Success proposal, including:

  • Providing for a voluntary 6-month extension of MSSP participation for ACOs whose participation agreement expires on December 31, 2018, along with methodologies to determine financial and quality-based performance during the 6-month participation period based on a 12-month measurement period

  • Implementing statutory changes enacted as part of the Bipartisan Budget Act of 2018 to provide for voluntary beneficiary alignment with ACOs beginning on January 1, 2019

  • Refining and expanding the list of “primary care services” that are used in the MSSP to attribute beneficiaries to ACOs

  • Allowing ACOs to certify that they meet the 50 percent threshold requirements related to use of interoperable electronic health records by ACO participants with the CMS Quality Payment Program’s CEHRT requirements

  • Finalizing changes to address ACOs that are impacted by “extreme and uncontrollable circumstances” such as recent hurricanes, fires and other natural disasters
  • Providing that the rule changes will also generally apply to Track 1+ ACOs authorized by the CMS Innovation Center.


While several changes in the MPFS final rule were viewed as positive by stakeholders, the MPFS final rule may represent a mixed bag for ACOs currently participating in the MSSP and for those considering participation in the future.

The MPFS final rule will permit ACOs in the their first or second agreement periods whose participation in the MSSP is scheduled to end in 2018 to continue their participation without interruption while CMS makes final decisions on a more comprehensive Pathways to Success final rule. Because financial and quality performance during the 6-month extension period will be evaluated based on the ACO’s performance during the entirety of 2019, the final rule may have practical implications that vary depending on whether an ACO is currently engaged in an “upside only” or an “at-risk” MSSP participation track.   

ACOs that are already participating in the MSSP need to recognize that a decision to extend participation for 6-months likely has potentially significant financial implications. Given the 12-month performance period under the final rule, to have a chance of avoiding shared losses, at-risk ACOs that extend their participation through June 2019 will need to continue ACO operations for all of 2019. Conversely, ACOs in upside only arrangements that take advantage of the 6-month extension can make a more pragmatic decision whether to continue to incur ACO-related operational costs through all of 2019 to enhance their odds of earning shared savings or potentially cut their investment in ACO operations mid-year. 

For organizations just now planning to participate in the MSSP, while the Agency’s judicious approach to understanding the ramifications of proposed changes is welcome, the delay in publishing a more comprehensive MSSP final rule may impact decisions on whether, how and when to participate in the program. Industry experience with the MSSP shows that successfully migrating to population health and financial risk takes considerable time, effort and money. As a result, provider communities that are not currently participating in the MSSP will likely take an increasingly hard look at whether they can commit to migrating to financial risk on CMS’ proposed pathways and timeframes – whenever those are finalized.   

CMS reports that it received 470 comments on its August 2018 MSSP proposed rule. Given the robust response, the limited guidance in the final rule was necessary to permit decision-making by ACOs whose current participation agreement is scheduled to end on December 31, 2018. The agency indicated in the PFS final rule that it plans to address the remaining proposals from the MSSP proposed rule in a forthcoming second final rule. Given the feedback from many industry stakeholders that the proposed rule’s rapid migration to financial risk will have a chilling effect on the development of new and continuation of existing MSSP ACOs, new and existing ACOs should stay abreast of developments as CMS continues to develop the MSSP program.