Multi-million dollar opportunities (and risks) with PY 2024 decisions

For PY 2024, the process ACOs use for making their annual model, track, and participant selections should be modified to include several recently announced regulatory changes.  Foremost among them is a new multimillion dollar decision: Whether to early renew to take advantage of the MSSP methodology changes defined in the 2023 Medicare Physician Fee Schedule (MPFS).  Other important considerations in the decision process this application cycle are the effects of competitive pressure from multi-ACO aggregators on participant retention and addition, the impact of ending the COVID PHE on savings and risk exposure, and the interaction of extended CMMI programs (BPCI-A, EOM, etc) on ACO financials.  

Early Renewal into MPFS

ACOs have the option to renew their agreement period early in order to kick off changes dictated by the MPFS.  There are several categories of changes that could result in big swings in benchmark.  ACOs will need to identify how each of the following MPFS provisions affect them and quantify the combined impact:

1. HCC risk score capping based on demographic changes and aggregating enrollment types

2. 3-way national, regional, and ACPT administratively set benchmark trending to reduce ratcheting effect within agreement periods

3. Prior savings adjustment to reduce ratcheting effect between agreement periods

4. Regional calculation window consistent with ACO’s prospective/retrospective assignment method

5. Lower cap of negative regional adjustment cap to 1.5%

6. Receive partial savings below MSR, based on quality and low-revenue status

Additional considerations must be given in two other areas.  First, how would early renewal impact the ACO’s glidepath?  Renewing early may reduce the number of years conservative, risk-avoiding ACOs can stay in upside only.  The more years an ACO has remaining in its current agreement period, the more impact.  Second, how would removing COVID effects from benchmark years impact the ACO?   An ACO’s benchmark may have either been positively or negatively impacted by COVID, depending on utilization changes compared to their region, the acuity of their patients, and the level of care avoidance experienced.  

For all variants discussed here, it is possible to develop predictive probabilistic models to accommodate these changes based on a combination of the ACO’s performance history and those of its region and nation.  There is an additional complication for 2024 due to CMS’s change to the HCC risk scoring model (V28) that went into effect starting PY 2023. With the needed risk score data not being provided by the time selections are due, ACOs need to proactively update their risk scoring calculations to accommodate for this change.