Health Center Regulatory Issues

A New Medicare Shared Savings Proposed Rule Could Affect Health Centers

The Centers for Medicare and Medicaid Services  (CMS) has released a proposed rule that would transform their Medicare Shared Savings Program (MSSP), pushing accountable care organizations (ACOs) to take on increasing levels of financial risk.  CMS’s proposal, which it is calling “Pathways to Success,” would consolidate and streamline the ACO track options; require that participating ACOs take on two-sided, or both upside and downside risk at some point in their agreement; and promote increased provider flexibility on things like telehealth and patient incentives. These provisions, among other changes to the program, aim to support CMS’s five MSSP priorities of accountability, competition, engagement, integrity, and quality and could impact health centers that are participating in this voluntary program.

Pushing health care providers to engage in increasingly value-based payment arrangements has been one of the top priorities of this Administration and Secretary of Health and Human Services Alex Azar. Secretary Azar even touted the critical role health centers can play in this shift during his speech at NACHC’s Policy & Issues Forum last March, stating:

“Wouldn’t it be nice if, in pursuing [value-based transformation], we had a set of partners that had a track record of delivering quality care at a significantly lower cost? … It’s all of you—America’s Community Health Centers.”

Health centers across the country, many in partnership with their state primary care associations, have already been actively engaged in ACOs and the MSSP. The recent passage of the 21st Century Cures Act also makes it easier for health centers to engage in Medicare ACOs starting in January 2019, allowing Federally Qualified Health Center (FQHC) patients who receive care from non-physician practitioners (i.e., nurse practitioners and physician assistants) to be assigned to an ACO[1]. This greater flexibility ensures more health centers can reach the minimum 5,000 assigned beneficiaries, reducing one key barrier to health center participation in Medicare ACO programs.

Health centers in the MSSP often participate in provider-led ACOs (as opposed to hospital-led ACOs), a trend that drives tremendous savings to the health care system while boosting care coordination and quality for patients. In fact, CMS has found that provider-led ACOs saved more money than ACOs in two-sided risk arrangements —  ACOs that both participate in shared savings and are responsible for spending above a certain threshold. Collectively these provider-led ACOs saved nearly $150 million dollars or 122% more savings that the two-sided ACOs as a whole.

While provider-led ACOs would be afforded greater flexibility in the Pathways to Success program (they can stay in arrangements with lower levels of risk for longer), ultimately the program pushes all ACOs to take on significant, sustained two-sided risk, a potentially difficult financial endeavor for providers investing in new and innovative care models. In part, CMS modeled this shift after their Next Generation ACOs. CMS recently released the report on the first performance year of the Next Generation ACO cohort, finding that these ACOs saved an average of $62 million to the Medicare programs.

NACHC  plans to submit comments regarding the proposed rule before the October 16, 2018 deadline. If you or your members are currently participating in or considering participating in the MSSP, or otherwise have any questions about the proposed rule, please contact

[1] Federal Register / Vol. 82, No. 219 / p. 53211

This blog is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) as part of an award totaling $8,500,000 with 60 percent financed with non-governmental sources. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by HRSA, HHS, or the U.S. Government. For more information, please visit