Background

The Affordable Care Act (ACA) included provisions to expand value-based purchasing; broaden quality reporting; improve the level of performance feedback available to providers; and create incentives to enhance quality, improve beneficiary outcomes, and increase the value of care. Confidential physician feedback reporting was initially implemented under Section 131 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) and later expanded by section 3003 of the Affordable Care Act of 2010 (ACA). MIPPA and subsequently ACA, directed the Centers for Medicare & Medicaid Services (CMS) to provide confidential information to physicians and medical practice groups about the resource use and quality of care they provide to their Medicare patients, including quantification and comparisons of patterns of resource use/cost among physicians and medical practice groups. In addition to the expansion of Physician Feedback reporting, section 3007 of the Affordable Care Act also required CMS to begin applying a value-based payment modifier under the Medicare Physician Fee Schedule (PFS) in 2015. CMS has incorporated these requirements, set forth in legislation, into its Physician Value initiatives, which incorporate the Physician Feedback and Value-Based Modifier Programs. These programs are part of CMS’ aim to transform Medicare from a passive payer role to that of an active purchaser of higher quality, more efficient health care.

Section 3022 of ACA added Section 1899 to Title XVIII of the Social Security Act and required the Secretary to establish the Medicare Shared Savings Program (Shared Savings Program), with the intention of the development of Accountable Care Organizations (ACOs) in Medicare. The Shared Savings Program was implemented in January 2012 to help doctors, hospitals, and other health care provides better coordinate care for Medicare patients through ACOs. By focusing on the needs of patients and linking payment rewards to outcomes, this leading ACA delivery system reform will help improve the health of individuals and communities while lowering the growth in Medicare costs. CMS published two proposals to strengthen the Shared Savings Program and finalized the proposals in the June 9, 2015 and June 10, 2016 Federal Registers.

Currently, we are proposing policies in the CY2017 PFS to align the Medicare Shared Savings Program with the proposals for the Quality Payment Program, to take beneficiary preferences for ACO assignment into consideration, and to improve beneficiary protections when ACOs are approved to use the skilled nursing (SNF) 3-day waiver rule. We also are proposing to refine and further implement the value-based payment modifier. To do so, we need to assess and analyze current policy options and proposed rule comments to finalize the regulation.