United States: 2018 ACOs Are Around The Corner – SNF Deadline Approaching

Elias N Matsakis is a Partner in our Chicago office.

Noon on May 31, 2017, was the deadline for new Medicare Shared Savings Program Applicants to file their online Notice of Intent to Apply (NOIA) for the 2018 year and for current participants in Track 1 to elect to participate under Track 1 A or for accountable care organizations (ACOs) to first participate in the skilled nursing facility (SNF) 3-Day Waiver. Currently participating ACOs and renewing ACOs were required to submit their NOIA via the Health Plan Management System. The applicable deadlines both new and renewing applicants, SNF 3-Day Waiver and/or Track 1+ Model applications are set forth on the CMS website. The regulations can be found at 42 CFR Part 425. While the application process will extend through much of the balance of the year, most of the critical decisions will need to be completed to permit filing of the applications by noon Eastern on July 31, 2017.

As reported on the website, there have been some significant changes available to new Applicants and Track 1 ACOs. Most significantly, beginning in 2018, Track 1 ACOs and new ACO applicants may participate in a Track 1+ Model that has a payment design with more limited downside risk than present in Tracks 2 or 3. As with Track 1 Models, the Track 1 + Model has a performance payment limit of 10 percent and first dollar sharing once the threshold is met or exceeded. The new model incorporates prospective beneficiary assignment and introduces some downside risk,but at lower risk levels than Track 3. The model has a 50 percent shared savings rate and a 30 percent loss sharing rate with lower levels of risk available to qualifying physician-only ACOs. The model can be structured with symmetrical thresholds from which to start sharing in savings or losses.

For ACOs that do not have an inpatient prospective payment system hospital participant, a cancer center or a rural hospital with more than 100 beds, or that are owned or operated, in whole or in part, by such a hospital or by an organization that owns or operates such a hospital, the ACOs loss sharing limit would be the lesser of 8 percent of Medicare Fee For Service Revenue or 4 percent of the ACO updated historical benchmark, if less. All other ACOs' Track 1+ downside would be capped at 4 percent of the ACO updated historical benchmark. Use of this model would qualify these ACOs to be Advanced APM entities under MACRA in 2018. In subsequent years, the ACOs would have to elect higher thresholds to continue to qualify as Advanced APM entities. ACOs electing downside risk will need to provide security for the potential reimbursement. Track 1+ ACOs are also eligible to apply for the SNF 3-Day Rule Waiver.

The SNF 3-Day Rule Waiver waives the requirement for a three day inpatient hospital stay prior to a Medicare-covered, post-hospital, extended care service for prospectively assigned eligible beneficiaries who receive care from an eligible skilled nursing facility (SNF). This waiver is only available for ACOs who participate in the Track 1 + or Track 3 MSSP ACO Models and a separate application is required.  Among the eligibility requirements is submission of SNF affiliate list with an executed agreement for each proposed affiliate and a communication plan, beneficiary evaluation and admission plan and care management plan. The SNF 3-Day Rule Waiver can be applied for existing ACOs, as well as new ACO applicants. The benefit remains unchanged only the hospitalization stay requirement is waived. Note that critical access hospitals or other hospitals that are CMS approved to perform an SNF level of care are not eligible to partner with ACOs under the waiver program.  

Eligibility for these covered SNF services under the waiver is generally limited to Medicare beneficiaries who have been prospectively assigned to the ACO and admitted to an eligible SNF affiliate of the ACO. Eligibility is further conditioned upon the beneficiary:   

  • being a medically stable non-SNF resident with a certain confirmed diagnosis;
  • having a skilled nursing or rehabilitation need that cannot be received as an outpatient; and
  • having been evaluated and approved for admission to the SNF by an ACO provider/suppler who is a physician in a manner consistent with his or her beneficiary evaluation and admission plan.

SNF affiliates must maintain an overall rating of three stars and undergo a program of integrity review. The SNF affiliates are not required to be ACO affiliates but must be on a CMS approved list which is updated and subject to CMS feedback.

The combination of the new Track 1+ model and the SNF 3-Day Rule Waiver offer SNFs and current and new ACO applicant a short window (June/July 2017 for 2018 eligibility) to determine whether entering into an approved affiliation agreement can offer greater care coordination and flexibility to the ACO and provide eligible beneficiaries the opportunity to receive SNF care without a minimum three day hospital stay. The time to act is now.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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