Accountable Care Organizations (ACOs): Preparing for Changing Quality Reporting Methodology

September 13, 2021

By Tyler Tracewski 

The health care industry faces accelerating transformation from fee-for-service reimbursement toward value-based payment models such as Accountable Care Organizations (ACOs) and Direct Contracting Entities (DCEs). As of January 2021, there were 477 Medicare ACOs serving more than 10.7 million beneficiaries, with hundreds more commercial and Medicaid ACOs serving millions of additional patients. 

Value-based payment models link provider reimbursements to quality of care, rather than simply to the quantity of services delivered. This approach offers an opportunity to enhance quality of care, reduce costs and improve health outcomes. However, to be successful, ACOs and providers must understand complex regulation changes. Chief among the regulatory changes is the 2021 Medicare Physician Fee Schedule final rule that implements seismic changes in the way Medicare Shared Savings Program (MSSP) ACOs are measured, assessed and compensated. The National Association of ACOs described the changes as requiring “a very different approach to quality reporting … that may require substantial operational changes in the ACO to execute.”

Due to advocacy efforts regarding the 2022 Proposed Rule, the Centers for Medicare & Medicaid Services (CMS) are delaying the planned full retirement of the web interface reporting mechanism until performance year (PY) 2024. These changes will phase in, with ACOs needing to change reporting methodology and approach. While the proposed extension provides additional leeway, the new quality reporting requirements are complex, and the time to implement needed reporting systems and processes to navigate them is now.

Report Methodology Changes

There are two main challenges for ACOs with this regulatory change: the data gathering method and data quantity.

First, the MSSP ACOs will need to collect data in a new way so it can be extracted, aggregated and submitted as large sets of structured data mapped to standardized codes. The previous CMS web interface allowed for submission of data via a simple Excel spreadsheet upload, and most practices with manual processes could adhere to the data submission requirement. Reporting options going forward include submitting via a Qualified Clinical Data Registry (QCDR) or an Electronic Health Record (EHR) Electronic Clinical Quality Measure (eCQM) with a Quality Reporting Document Architecture (QRDA) formatted reporting structure for all patients, regardless of payer, with no option for Excel uploads as reporting tools.

Second, new specification requirements remove the sampling approach to quality assessment used by the web interface. Instead, CMS will require that the measures be reported for at least 70% of eligible patients, regardless of payer type, to assess the overall quality of care delivered by the ACO. This will include both Medicare and non-Medicare patients, not just the ACO’s attributed beneficiaries, to assess the overall quality of care furnished by the ACO. 

Both of these challenges are massive changes in terms of volume and scale, eliminating the possibility of human interface and manual paper-based systems. ACOs will need to aggregate a large amount of patient population data and related quality actions for their providers who employ various workflows and EHRs. Even if an ACO’s provider network utilized one EHR, linking together data for quality measures will be a daunting task. This decision by CMS to capture even more data has caused much distress and volatility.

Measure Array Changes

Phasing in from PY 2022 through PY 2024, practices will need a new measure set included in the newly created Alternative Payment Model (APM) Performance Pathway (APP) to better align quality measurement approaches with the Quality Payment Program (QPP) Merit-Based Incentive Payment System (MIPS).

Previously, quality measures were based on 23 items across four equally weighted domains. In PY 2021, quality measures were reduced to 13, driven by the Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS consolidation. In PY 2022 and beyond, there will be a further reduction to six measures: CAHPS for MIPS, hospital-wide readmission claims, chronic condition admission claims, diabetes poor control, controlling high blood pressure, and screening for depression.

These particular quality measures focus on managing chronic health conditions that have a high prevalence among Medicare beneficiaries. Reporting these measures will become mandatory for all ACOs, and while they are fewer in number, they require an exponentially larger set of data for reporting.

There are notable differences in benchmarking. CAHPS for MIPS does not use a flat percentage approach and, therefore, may have the effect of creating larger differences in quality scores across ACOs.

Prepare Now

These changes require a very different approach to quality reporting, necessitating substantial operational changes and workflows. In many cases, substantial investment will be needed to comply with the requirements. Larger practices with newer EHR systems and modules for data sharing and reporting, will be in a relatively good position to make these changes. But many other ACOs don’t have the expertise, technology or resources to meet the new rules. One strategy for practices that know they will not make the reporting threshold or who are working on legacy paper-based systems may be to leave the ACO.

In the future, we anticipate a move away from MSSP to DCEs. This may remove some administrative burden as DCE quality measures are based on claims data and patient surveys alone. However, no one can confidently predict how CMS will change its reporting requirements going forward.

The scale and complexity of the MSSP changes makes expert counsel more important than ever. Look for an advisor who has experience helping large ACOs and practices make the operational and data management changes needed to improve quality, manage expenses and realize savings. Your consultant should bring a deep and ongoing understanding of changing quality metrics and measurement protocols for each PY. What’s more, there are a number of outstanding implementation questions remaining that need to be monitored.

About Tyler Tracewski

Tyler Tracewski is a Health Care Services Group Manager, assisting clients with strategic and financial planning, development and integration of financial modeling tools, and overall practice management.