2017 Hurricanes, Wildfires Impact ACOs' Ability to Succeed

AAFP Urges Changes to CMS Interim Final Rule

February 20, 2018 04:03 pm News Staff

The AAFP has been in touch with family physicians in communities devastated by an unusually ferocious 2017 hurricane and wildfire season, and it's clear that the lingering effects of those disasters continue to weigh heavily on physicians and health care entities.

[Plaque that reads Disaster Recovery beside red button marked Push]

Accountable care organizations (ACOs) that participate in the Medicare Shared Savings Program in those areas need special consideration because the disasters may have affected utilization and cost of services to patients, the AAFP told CMS.

"ACOs have expressed concerns that disaster-related effects on their ACO participants and assigned beneficiary population could affect their ability to successfully meet quality performance standards and, in the case of ACOs under performance-based risk, avoid shared losses," said the AAFP in a Feb. 14 letter(4 page PDF) to CMS Administrator Seema Verma, M.P.H.

The letter, signed by AAFP Board Chair John Meigs, M.D., of Centreville, Ala., was in response to a CMS interim final rule published in the Dec. 26, 2017, Federal Register(www.gpo.gov) that established policies for assessing the financial and quality performance of Medicare Shared Savings Program ACOs that were affected by extreme and uncontrollable circumstances during the 2017 performance year.

Story Highlights
  • The AAFP urged CMS to make changes to its interim final rule covering Medicare Shared Savings Programs and accountable care organizations (ACOs) affected by extreme and uncontrollable circumstances during the 2017 performance year.
  • The AAFP said in a letter to the agency that ACOs have expressed concerns that disaster-related effects could affect their ability to successfully meet quality performance standards and avoid shared losses.
  • In its interim final rule, CMS referred specifically to hurricanes Harvey, Irma and Maria, as well as to California wildfires.  

In that rule, CMS refers specifically to hurricanes Harvey, Irma and Maria, as well as to a rash of wildfires that burned entire neighborhoods in California.

The AAFP noted that ACO stakeholders in the impacted regions "report that loss of infrastructure has significantly affected the utilization and cost of services furnished to their Medicare beneficiaries."

That includes services provided in ERs, hospitals and skilled nursing facilities.

The AAFP pointed out that some patients with chronic conditions have limited access to their primary care physicians and, therefore, may not get necessary medication refills when needed -- a situation that could lead to an increase in hospital admissions.

In addition, disaster-affected ACO providers and suppliers "are struggling to meet beneficiaries' discharge needs, including housing, family support and personal care."

Determination of Quality Performance Scores

Because extreme and uncontrollable circumstances frequently occur across different geographic regions and impact a mix of beneficiaries, the CMS rule would base qualification for an automatic extreme and uncontrollable circumstances designation on whether

  • 20 percent or more of the ACO's assigned beneficiaries reside in counties designated as emergency areas in performance year 2017 or
  • the ACO's legal entity is located in such an area.

The AAFP letter noted that 92 percent of the ACOs impacted by the 2017 disasters had more than 20 percent of their assigned beneficiaries residing in declared emergency areas and that some ACOs below that beneficiaries threshold have a legal entity in such an area.

The ability of those ACOs to report quality "may be equally impacted since the legal entity may be unable to collect the information from the ACO participants or (may) experience infrastructure issues," said the AAFP.

The Academy expressed support for CMS' efforts but urged some changes.

For instance, the AAFP recommended that CMS

  • use the 20 percent "hypothesis" and other percentages -- say, 5 percent or 10 percent -- as test cases to see if those also cause on impact on an ACO's quality scores;
  • include physicians and other clinicians as an additional method to identify whether an ACO's quality performance has been affected -- for example, by automatically applying the extreme and uncontrollable circumstances policy if 50 percent of the national provider identifiers billing under the tax identification number are in an impacted area; and
  • use an affected ACO's minimum quality performance score as the mean -- but not calculate future benchmark thresholds until complete reporting can be achieved.

"Setting quality benchmarks to an artificial mean is not a valid approach to determine legitimate savings and losses," said the AAFP.

The Academy also asked that CMS be "transparent" when choosing criteria to determine the time period during which an ACO is identified as experiencing extreme and uncontrollable circumstances.

Mitigating Shared Losses

The AAFP noted that CMS suggested a modified payment methodology under Medicare Sharing Savings Program tracks two and three to "mitigate shared losses owed by ACOs affected by extreme and incontrollable circumstances."

Based on CMS' interim final rule, an ACO's shared losses would be reduced by an amount determined by

  • the percentage of total months the ACO experienced the extreme and uncontrollable circumstance, and
  • the percentage of the ACO's assigned beneficiaries who live in area affected by such a circumstance.

Furthermore, the AAFP noted that CMS would

  • remove claims for services provided to assigned beneficiaries in the impacted area by an ACO participant -- when such claims are submitted with a natural disaster modifier -- before calculating financial performance,
  • hold ACOs accountable for months when there was no disaster and for the beneficiary population located outside the disaster area, and
  • allow ACOs to continue to share in any savings achieved for performance year 2017.

In addition, CMS would not modify the historical benchmark, but would note the impact of the 2017 hurricanes and wildfires on ACO expenditures and leave open the option to revisit the question of making methodology adjustments for calculating benchmarks in future rule-making.

The AAFP acknowledged its support for CMS' proposal to mitigate shared losses and offered a recommendation if extreme and uncontrollable circumstances impact ACOs in the future.

In that situation, CMS could compare ACO expenditures in impacted areas under tracks two and three to the 2017 benchmarks "to determine an approach that is fair and statistically reliable," said the AAFP.

This is not the first time the AAFP has stepped in to support members on disaster-related issues. In December 2017, the AAFP commented(15 page PDF) on the Quality Payment Program interim final rule and championed CMS' plan to establish a policy to cover extreme and uncontrolled circumstances related to the Merit-based Incentive Payment System.

Related AAFP News Coverage
AAFP Calls for Further Changes to QPP Interim Final Rule

2017 Hurricanes, Wildfires Prompt Changes in MIPS Reporting
Affected Physicians to Receive Neutral Pay Adjustment