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Reducing Administrative Burden

What is an MSSP ACO?


One of the major components of the move toward value-based care and away from payment for volume is a program developed by the Centers for Medicare & Medicaid Services (CMS) referred to as the Medicare Shared Savings Program (MSSP) that offers providers an opportunity to create an Accountable Care Organization (ACO). The question for many independent providers may be, what is an MSSP ACO?

An ACO is a group of healthcare providers, which can include physicians and hospitals, who voluntarily form a partnership to share accountability for the cost of care and for the quality of care they deliver to their patients. ACO payments from CMS incorporate financial incentives for lowering costs and for meeting specific goals for quality for their patient population.

The financial incentives can include shared savings (bonuses) or shared losses (penalties) that are paid to or collected from the ACO, instead of the individual providers. There is a range of ACO models, depending on how much financial risk the ACO is willing to take, that vary regarding beneficiary involvement and upfront payments.

The ACO agrees to be held accountable for the patient’s experience of care, which includes the quality and cost of that care. The MSSP features different tracks that allow the ACO to select an arrangement that makes sense for their particular group. CMS emphasizes that the MSSP is an innovative move in the trend toward value-based care and away from the volume-based payment system. The alternative model:

  • Promotes accountability for a patient population.
  • Coordinates items and services for Medicare fee-for-service beneficiaries.
  • Encourages investment in high quality and efficient services.

The MSSP ACO encourages groups of healthcare providers to come together to give coordinated, high quality care to their Medicare patients.

In January 2022, CMS announced that MSSP ACOs are serving a growing patient population. The organization projects that over 11 million Medicare beneficiaries will be served by MSSP ACOs in 2022. CMS Administrator Chiquita Brooks-LaSure noted that “with one in every five healthcare dollars paid by Medicare, we can strengthen and transform our healthcare system. Accountable Care Organizations present an invaluable opportunity to move Medicare toward person-centered care.”

As of January 1, 2022, 66 new ACOs had joined the program. In addition, 140 existing ACOs renewed their participation. The total number of MSSP ACOs is now 483. The number of individuals who receive healthcare via an MSSP ACO is up 3% from 2021.

Healthcare providers are encouraged to participate in an MSSP ACO that is in a track that qualifies as an Advanced Alternative Payment Model (APM). In this track, providers can receive additional rewards for delivering cost-efficient and high-quality care as they take on higher levels of risk. The number of ACOs that participate in this track increased from 34% to 50% as of the beginning of 2022.

Participation options are determined by CMS based on a combination of factors, including:

  • Past experience of the ACO and its ACO participants in performance-based risk Medicare ACO initiatives
  • Whether the ACO is a low revenue ACO or high revenue ACO.

During their agreement period, the MSSP ACO:

  • Coordinates care for beneficiaries, measures and improves quality, and publicly reports performance results
  • Prepares for the next performance year by making sure contact information is current in CMS systems, maintaining their ACO Participant List, and completing the Annual Certification process
  • Receives annual financial and quality performance results.

The MSSP ACO must have at least 5,000 Medicare fee-for-service (FFS) beneficiaries assigned to their ACO in each benchmark year to be eligible for participation in the Shared Savings Program.