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01.29.2020

What is the Medicare Pathways to Success Program?

by Jennifer Bresnick

The Medicare Pathways to Success program offers a structured yet flexible “glide path” for accountable care organizations as they take on increasing levels of performance-based financial risk.

In the world of value-based care, few initiatives have had more of an impact on patients and providers than the Medicare Shared Savings Program (MSSP). 

Launched in 2013, the MSSP now includes more than 500 accountable care organizations (ACOs) managing the care of more than 10.9 million Medicare beneficiaries, making it the largest single program to use performance-based incentives to reward providers for better outcomes and lower costs.

At the end of 2018, the Centers for Medicare and Medicaid Services (CMS) finalized a number of structural changes to the MSSP in an effort to foster participation, add more flexibility, and encourage healthcare providers to embrace robust risk-based financial arrangements.

CMS also introduced a new name for the program – Pathways to Success – which reflects the multiple tracks and options for first-time and experienced ACOs.

“Pathways to Success is a bold step towards quality healthcare at a lower cost through competition and beneficiary engagement,” said CMS Administrator Seema Verma at the time.

One of the biggest changes in Pathways to Success is the requirement to shoulder increasing levels of financial accountability over time, CMS explained.  The “glide path” to higher levels of shared risk is intended to accelerate the shift away from traditional fee-for-service reimbursements while holding healthcare providers to high standards of quality and performance.

“The rule strikes a balance between encouraging participation in the ACO program and advancing the transition to value, ultimately protecting taxpayers and patients,” Verma said. “Medicare can no longer afford to support programs with weak incentives that do not deliver value. As we structure new payment arrangements, the impact on the overall market will be top of mind.”  

For independent primary care providers, Pathways to Success offers numerous opportunities to manage patients more effectively within the framework of value-based reimbursement.

How does participation work?

Hospitals, primary care providers, and specialists can all participate in Pathways to Success by forming accountable care organizations, or ACOs.  These ACOs work together to meet specific quality and spending goals for an assigned population of eligible Medicare beneficiaries.

ACOs can choose between two broad categories of financial arrangement: upside-only risk models (one sided) or downside risk models (two sided).

In an upside-only arrangement, an ACO will receive a portion of shared savings, or the difference between what Medicare expected to spend on care for the attributed population and the actual spending for the performance period, if it meets quality and spending benchmarks. 

ACOs in upside-only models are not financially liable to return any money to Medicare if it spends more than the target amount or falls short of its quality goals. 

Downside risk models offer a higher percentage of the shared savings in return for successfully managing quality and costs.  However, if the ACO spends more than expected, it will be responsible for repaying a portion of the overages back to Medicare.

Medicare sets an ACO’s performance benchmarks on a yearly basis, using a combination of factors to adjust the targets appropriately, explains Travis Broome, Vice President of Policy at Aledade.

“Attribution and expected costs are the two major elements of your benchmark,” he said during a recent Aledade webinar for independent primary care providers who want to get started in the Pathways to Success program. 

“Attribution is the assignment of patients to an ACO by identifying a primary care provider.  It defines the population we’re talking about so that we can get a clear idea of the spending, savings, and outcomes of that group of patients.” 

Around 22 million of the nation’s 33 million traditional Medicare fee-for-service beneficiaries are eligible for attribution based on their Medicare coverage and utilization history, he added.  

“Attribution is often determined by simple majority of services provided in the past 12 months.  But if the person’s care is more fragmented, the determination can be based on the plurality of services instead,” said Broome.  “ACOs can work together to achieve the plurality, so if the group of providers who delivered the most services are in the same ACO, that ACO will get the attribution.” 

“Generally, we want there to be a strong and clear relationship so that you have a meaningful connection with them and have a greater chance of positively influencing their behaviors.”

The expected costs of this attributed population are calculated by understanding the clinical risk level of the population, their historical costs, and how a provider’s costs compare to the regional market. 

“Medicare is basically asking what that population would cost if they had been seen by someone else in your area,” said Broome.  “That helps them determine if you are already a highly efficient provider or someone who has more room to reduce unnecessary expenditures in a clinically appropriate way.”

What are the different tracks in Pathways to Success?

ACOs can begin their Pathways to Success journey on the Basic Track or the Enhanced Track based on previous experience and readiness to take on risk.

The Basic Track is further divided into five levels with increasing levels of risk and reward.

ACOs will generally advance automatically through the levels each year of the 5-year performance period, but they can also choose to move more quickly if they feel confident about their success.

 

Basic A and B

 

The Basic A and Basic B levels are for ACOs that are ready to get started with value-based care but would prefer not to immediately shoulder financial risk.  These levels are upside-only. Participants can earn up to 40 percent of any shared savings and are not accountable for any losses.

“Basic A and B are for ACOs who are committed to the concept and the principle of value-based care,” said Broome. 

“They might not have much experience integrating population health management into primary care yet, but that’s why one-sided risk is a good option for them.  They can get used to the reporting, learn how to put those ideas into action, and get their feet wet without the risk of paying back money to CMS if they don’t exceed their targets.”

 

Basic C and D 

 

ACOs that progress into Basic C and D will need to begin taking on downside risk.  These levels offer slightly higher percentages of shared savings – up to 50 percent – but also require the ACO to be accountable for 30 percent of any downside losses, with a risk cap of either 2 or 4 percent of their Medicare fee-for-service revenue.

CMS notes that existing ACOs identified as having previously participated in the MSSP under the former Track 1 would be restricted to a single year under a one-sided model. 

However, newly formed low revenue ACOs are allowed up to three years under a one-sided model.  These ACOs can remain in Basic B for an extra year provided that they agree to skip Basic C and D and progress directly to Basic E in their fourth performance year. 

 

Basic E

 

Basic E is similarly focused on keeping providers accountable for better outcomes through downside risk.  This two-sided option offers up to 50 percent of shared savings along with responsibility for up to 30 percent of losses.  The risk cap is slightly higher, however, at 8 percent of Medicare fee-for-service revenue. 

While the risk cap may seem steep, Broome still advises practices to consider Basic E as an attractive option.

“Basic C and D can give you your first taste of risk, but we typically don’t advise people to start or stay there unless you are not eligible for the Advanced Alternative Payment Model (AAPM) bonus in MIPS,” he noted.  The Basic E and Enhanced tracks both qualify as AAPMs under MIPS.

“Basic E is usually a better option for independent primary care providers in physician-led ACOs,” Broome continued.  “The risk cap is higher, at 8 percent of your FFS revenue. But if you get the AAPM bonus, which is roughly 5 percent, then you’re really only talking about a 3 percent cap on your risk. That is a manageable situation for the majority of practices.”

 

Enhanced Track

 

The Enhanced track is equivalent to the challenging Track 3 under the former MSSP model.  Existing ACOs that participated in the higher-level risk-bearing tracks of the old MSSP (Track 1+, Track 2, and Track 3) will need to start in Basic E or Enhanced.  They may not go “backwards” into upside only models.

Enhanced gives high-earning and very experienced ACOs the chance to earn a much higher percentage of shared savings, but also significantly increases the risk factor.

Participants in the Enhanced track can receive up to 75 percent of upside shared savings but are responsible for up to 40 percent of losses.  The risk cap is also higher, at 15 percent of Medicare fee-for-service revenue.

“The Enhanced track is for ACOs that fully understand the program and are well positioned to succeed under their benchmark,” said Broome.  “They understand how that benchmark is calculated, they know who their patients are, and they have the strategies and technologies in place to manage their population proactively.” 

“Enhanced is really a full-risk situation, but it’s a great option for ACOs once they gain enough experience and get to the point where they feel comfortable taking full accountability for their patients.  That’s the goal of value-based care, when it comes down to it.”

Creating value for patients and providers

The new Pathways to Success program is designed to ensure that more providers have more flexibility and choice as they transition to value-based care.

However, CMS has been very clear about its intentions to rely much more heavily on risk-based models to create value for patients and taxpayers, and that the nation’s largest payer will use its industry clout to shepherd providers toward value-based reimbursements at a steady rate.

“The biggest takeaway from these program changes is that everyone needs to buy into the notion that primary care providers have to be accountable for the total cost and outcomes of their patients,” Broome said. 

“If you are able to transform your outlook and your practice to embrace value-based care, then Pathways to Success is a great vehicle to help you thrive in the future.”

Pathways to Success creates a new urgency around gaining the skills and competencies to accept more accountability for clinical outcomes and financial results. 

“In the near future, the difference between a financially successful practice and a struggling practice will be how well they embrace revenue that isn’t driven directly by fee-for-service.  Value-based programs, like Pathways to Success, are going to be the way to make that happen,” Broome stated. 

“Understanding these changes now and getting into the right track as soon as possible is one of the best things you can do to prepare your practice for the uncertainty and challenges ahead."