Mssp Calculation Example

Estimate your potential savings under the Medicare Shared Savings Program (MSSP) by entering your ACO’s performance data below.

Comprehensive Guide to MSSP Calculation: Understanding Medicare Shared Savings Program Payments

The Medicare Shared Savings Program (MSSP) is a value-based payment model that rewards Accountable Care Organizations (ACOs) for delivering high-quality care while reducing healthcare costs. Understanding how MSSP calculations work is crucial for ACOs to maximize their potential savings and improve patient outcomes.

How MSSP Calculations Work

The MSSP calculation determines whether an ACO has generated savings or losses compared to its benchmark, and if eligible, how much of those savings the ACO will share with Medicare. The process involves several key components:

1. Benchmark Establishment: Medicare sets a financial benchmark for each ACO based on the historical spending of the ACO’s assigned beneficiaries.
2. Actual Expenditures: The actual spending for the performance year is calculated for the same beneficiary population.
3. Savings/Loss Determination: The difference between the benchmark and actual expenditures determines if there are savings or losses.
4. Quality Performance: ACOs must meet quality performance standards to be eligible for shared savings.
5. Shared Savings Calculation: Eligible ACOs receive a portion of the savings based on their track and performance.

Key Components of MSSP Calculations

1. Benchmark Methodology

The benchmark is typically based on the most recent three years of fee-for-service spending for the ACO’s assigned beneficiaries, adjusted for regional spending and other factors.

Regional Adjustment: For ACOs in their second or subsequent agreement period, the benchmark is blended with regional fee-for-service expenditures.

Risk Adjustment: Benchmarks are risk-adjusted to account for the health status of the ACO’s patient population.

2. Quality Performance

ACOs must meet quality performance standards to be eligible for shared savings. The quality score is based on:

• Patient/Caregiver Experience (32%)
• Care Coordination/Patient Safety (28%)
• Preventive Health (12%)
• At-Risk Population (28%)

ACOs must achieve at least the 30th percentile on quality measures to qualify for shared savings.

3. Shared Savings Rates

The percentage of savings an ACO can share depends on its track:

• Basic Track (Levels A-E): 25%-50% depending on level
• Enhanced Track: Up to 75%

Higher risk tracks offer higher potential shared savings but also require the ACO to accept downside risk.

MSSP Calculation Formula

The basic formula for calculating shared savings is:

Shared Savings = (Benchmark – Actual Expenditures) × Quality Score × Sharing Rate

Where:

• Benchmark: The financial target set by Medicare
• Actual Expenditures: The ACO’s actual spending
• Quality Score: The ACO’s performance on quality measures (capped at 100%)
• Sharing Rate: The percentage of savings the ACO is eligible to receive

MSSP Track Comparison

Track	Risk Level	Shared Savings Rate	Shared Losses Rate	Maximum Savings/Losses
Basic Level A	Upside only	25%	0%	Capped at 10% of benchmark
Basic Level B	Upside only	30%	0%	Capped at 15% of benchmark
Basic Level C	Low downside	35%	30%	Capped at 20% of benchmark
Basic Level D	Medium downside	40%	35%	Capped at 25% of benchmark
Basic Level E	High downside	50%	40%	Capped at 30% of benchmark
Enhanced	Full downside	75%	75%	No cap

Historical MSSP Performance Data

According to the Centers for Medicare & Medicaid Services (CMS), MSSP has shown significant growth and savings since its inception:

Year	Number of ACOs	Assigned Beneficiaries (millions)	Gross Savings (billions)	Net Savings to Medicare (billions)
2012	114	1.7	$1.9	$0.3
2015	404	7.7	$4.9	$1.5
2018	561	10.5	$7.4	$2.9
2020	517	11.2	$4.1	$1.9
2022	483	11.0	$5.3	$2.6

Strategies to Maximize MSSP Savings

ACOs can implement several strategies to improve their performance and maximize shared savings:

1. Enhance Care Coordination:
   • Implement robust care management programs for high-risk patients
   • Use health information technology to improve communication among providers
   • Develop strong relationships with post-acute care providers
2. Focus on Preventive Care:
   • Increase screening rates for chronic conditions
   • Implement annual wellness visit programs
   • Develop patient education initiatives for self-management
3. Optimize Specialist Referrals:
   • Implement referral management systems
   • Develop preferred specialist networks
   • Monitor and reduce unnecessary specialist visits
4. Improve Quality Performance:
   • Focus on patient experience measures
   • Implement clinical quality improvement initiatives
   • Use data analytics to identify quality gaps
5. Engage Beneficiaries:
   • Develop patient engagement strategies
   • Implement shared decision-making tools
   • Create patient advisory councils

Common Challenges in MSSP Participation

While MSSP offers significant opportunities, ACOs often face challenges:

• Data Management: Integrating and analyzing data from multiple sources can be complex and resource-intensive.
• Care Coordination: Coordinating care across different providers and settings requires significant infrastructure and processes.
• Patient Attribution: The methodology for assigning beneficiaries to ACOs can be unpredictable and may not reflect actual care relationships.
• Financial Risk: ACOs in downside risk tracks face potential financial losses if spending exceeds benchmarks.
• Quality Reporting: Meeting the quality reporting requirements can be administratively burdensome.
• Health Equity: Addressing health disparities among beneficiary populations requires targeted strategies and resources.

Regulatory Considerations

The MSSP is governed by regulations from CMS, which periodically updates the program rules. Key regulatory aspects include:

• Benchmarking Methodology: CMS has made several changes to how benchmarks are calculated, including the introduction of regional adjustments.
• Quality Measurement: The quality performance standards and measures are regularly updated to reflect current best practices.
• Risk Adjustment: The methodology for risk-adjusting benchmarks and expenditures is specified in regulation.
• Beneficiary Assignment: Rules for assigning beneficiaries to ACOs are detailed in program regulations.
• Financial Methodology: The calculation of shared savings and losses is precisely defined in program rules.

ACOs should stay informed about regulatory changes by monitoring updates from CMS and consulting with legal and financial advisors specializing in value-based care.

Future of MSSP

The MSSP continues to evolve as CMS refines the program to achieve better outcomes and greater savings. Several trends are shaping the future of MSSP:

1. Increased Focus on Health Equity:

   CMS is placing greater emphasis on addressing health disparities and improving care for underserved populations. This includes new quality measures focused on health equity and adjustments to benchmark calculations.

2. Transition to Digital Quality Measures:

   The program is moving toward digital quality measures that can be automatically collected from electronic health records, reducing reporting burden.

3. Enhanced Beneficiary Engagement:

   Future iterations of MSSP may include more direct beneficiary engagement requirements and incentives.

4. Greater Emphasis on Primary Care:

   There is growing recognition of the importance of primary care in achieving better outcomes and lower costs, which may lead to changes in how primary care is supported within ACOs.

5. Integration with Other Value-Based Programs:

   CMS is working to better align MSSP with other value-based payment models to create a more cohesive approach to value-based care.

Resources for MSSP Participants

ACOs participating in MSSP can access various resources to support their success:

• CMS Resources: The CMS MSSP website provides program guidance, webinars, and tools for participants.
• National Association of ACOs (NAACOS): This professional organization offers education, advocacy, and networking opportunities for ACOs.
• Learning Collaboratives: Many organizations offer learning collaboratives where ACOs can share best practices and learn from each other.
• Data Analytics Tools: Various vendors offer specialized analytics tools designed for MSSP participants to track performance and identify opportunities.
• Consulting Services: Many consulting firms specialize in helping ACOs optimize their performance in MSSP.

Case Study: Successful MSSP Participation

One example of a successful MSSP participant is the HealthPartners ACO in Minnesota. Over several performance years, they achieved:

• Consistent quality scores in the 90th percentile or higher
• Annual gross savings averaging $20 million
• Shared savings payments totaling over $50 million across multiple performance years
• Improved patient outcomes, including reduced hospital admissions and readmissions
• High patient satisfaction scores

Key factors in their success included:

1. Strong primary care foundation with aligned incentives
2. Robust care coordination programs for high-risk patients
3. Advanced data analytics capabilities
4. Focus on preventive care and chronic disease management
5. Continuous quality improvement initiatives
6. Effective patient engagement strategies

Conclusion

The Medicare Shared Savings Program represents a significant opportunity for healthcare providers to transition from volume-based to value-based care. By understanding the MSSP calculation methodology, focusing on quality improvement, and implementing effective care coordination strategies, ACOs can achieve better patient outcomes while generating shared savings.

Success in MSSP requires a comprehensive approach that includes clinical transformation, data analytics, care coordination, and patient engagement. As the program continues to evolve, ACOs that can adapt to changing requirements and focus on continuous improvement will be best positioned to thrive in this value-based care model.

For the most current information about MSSP, always refer to official sources such as:

• Centers for Medicare & Medicaid Services (CMS)
• CMS Innovation Center
• Health Affairs (for analysis and research on MSSP)