Calendar Year (CY) 2024 Medicare Physician Fee Schedule Final Rule — Medicare Shared Savings Program Fact Sheet
On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2024 Medicare Physician Fee Schedule (PFS) final rule that includes changes to the Medicare Shared Savings Program (Shared Savings Program) to further advance CMS’ overall value-based care strategy of growth, alignment, and equity. These changes include refinements to the broader changes finalized in the CY 2023 PFS final rule (87 FR 69404, 69777 through 69968 (Nov. 18, 2022) and also described in the CY 2023 Medicare Physician Fee Schedule Final Rule — Medicare Shared Savings Program Fact Sheet.
This Fact Sheet summarizes the major changes to the Shared Savings Program that are included in the CY 2024 PFS final rule. The changes we are finalizing continue to move ACOs toward digital measurement of quality by establishing a new Medicare Clinical Quality Measure (CQM) collection type for ACOs and aligning Shared Savings Program and Merit-based Incentive Payment System (MIPS) Promoting Interoperability requirements starting January 1, 2025. We are also finalizing changes to the financial benchmarking methodology for ACOs in agreement periods beginning on January 1, 2024, and in subsequent years, to apply a cap to risk score growth in an ACO’s regional service area (similar to the cap applied on an ACO’s risk score growth), apply the same risk adjustment methodology to both the benchmark and performance years, and eliminate the overall negative regional adjustment to the benchmark to encourage participation by ACOs caring for medically complex, high-cost beneficiaries.
Additionally, the policies we are finalizing include adding a third step to the beneficiary assignment methodology to provide greater recognition of the role of nurse practitioners, physician assistants and clinical nurse specialists in delivering primary care services, updating the definition of “primary care services,” used for purposes of beneficiary assignment to remain consistent with billing and coding guidelines, and refining policies for the newly established advance investment payments (AIP).
In total, these changes are expected to increase participation in the Shared Savings Program by roughly 10% to 20%, which will provide additional opportunities for beneficiaries to receive coordinated care from ACOs.
Lastly, in this final rule, we summarize comments received in response to the comment solicitation that sought to gather information on potential future developments to Shared Savings Program policies, including incorporating a higher risk track than the ENHANCED track, modifying the amount of the prior savings adjustment, potential refinements to the Accountable Care Prospective Trend (ACPT) and the three-way blended benchmark update factor, and approaches to promote ACO and community-based organization (CBO) collaboration.
Revising the Shared Savings Program Quality Performance Standard
Medicare CQMs for Shared Savings Program ACOs
For performance year 2024 and subsequent performance years, we are establishing the Medicare CQMs for Accountable Care Organizations Participating in the Medicare Shared Savings Program (Medicare CQMs) as a new collection type for Shared Savings Program ACOs under the Alternative Payment Model (APM) Performance Pathway (APP). This policy reduces barriers in the adoption of digital measurement to allow the Shared Savings Program to align with the Universal Foundation for adults in 2025.
In order to facilitate population-based activities that improve health and aid ACOs in patient matching and data aggregation throughout the performance year, we will provide all ACOs with a list of beneficiaries eligible for Medicare CQMs each quarter throughout the performance year. The cadence of quarterly updates to the list throughout the performance year will enable ACOs to aggregate data throughout the performance year.
Standards for data completeness, benchmarking, and scoring ACOs for the Medicare CQM collection type will align with MIPS benchmarking and scoring policies. We are also finalizing policies to apply the Shared Savings Program’s health equity adjustment to an ACO’s MIPS Quality performance category score when calculating shared savings payments, which advances equity by supporting ACOs that deliver high quality care while also serving a high proportion of underserved individuals.
ACOs will continue to have the option to report quality data using the CMS Web Interface measures, eCQMs, and/or MIPS CQMs collection types in performance year 2024, in addition to the new option to report quality data using Medicare CQMs. In performance year 2025 and subsequent performance years, ACOs will have the option to report quality data using the eCQMs, MIPS CQMs, and/or Medicare CQMs collection types.
Aligning CEHRT Requirements for Shared Savings Program ACOs with MIPS
In order to align the Shared Savings Program CEHRT requirement with MIPS, we are finalizing our proposed policies, with a one-year delay. We are delaying implementation of these policies for one year to give ACOs time to work with their participants to meet this new requirement. As such, for performance years beginning on or after January 1, 2025, unless otherwise excluded, an ACO participant, ACO provider/supplier, and ACO professional that is a MIPS eligible clinician, Qualifying APM Participant (QP), or Partial QP, regardless of track, would be required to report the MIPS Promoting Interoperability performance category measures and requirements to MIPS and earn a performance category score for the MIPS Promoting Interoperability performance category at the individual, group, virtual group, or APM Entity level.
In order to reduce burden and further alignment with MIPS, we are also finalizing certain exclusions from the new reporting requirements, as well as providing options to report the MIPS Promoting Interoperability performance category at the individual, group, virtual group, or APM Entity level. We are also delaying for one year our proposed ACO public reporting requirement related to CEHRT use.
Modifications to the Health Equity Adjustment Underserved Multiplier
We are finalizing policies to recognize beneficiaries with partial year, as compared to full year, Medicare Part D low-income subsidy (LIS) enrollment or dual eligibility for Medicare and Medicaid, to strengthen incentives for ACOs to serve this population. We are also finalizing policies to remove beneficiaries who do not have a numeric national percentile Area Deprivation Index (ADI) rank from the health equity adjustment calculation for PY 2023 and subsequent performance years. For a fact sheet on the CY 2024 Quality Payment Program final rule changes, please visit the QPP Resource Library (cms.gov).
Benchmarking Methodology Modifications to Improve ACO and Regional Risk Adjustment, and Encourage Participation by ACOs Caring for Medically Complex, High-Cost Beneficiaries
Cap Regional Service Area Risk Score Growth for Symmetry with ACO Risk Score Cap
We are finalizing our proposal to modify the calculation of the regional component of the three-way blended benchmark update factor (weighted one-third ACPT, and two-thirds national-regional blend), for agreement periods beginning on January 1, 2024, and in subsequent years. The approach will cap prospective Hierarchical Condition Category (HCC) risk score growth in an ACO’s regional service area between benchmark year three and the performance year using a similar methodology to the one adopted in the CY 2023 PFS final rule (87 FR 69932 through 69946) for capping ACO risk score growth, while additionally accounting for an ACO’s aggregate market share. This cap on regional risk score growth will be applied whether or not the ACO’s prospective risk score growth was capped.
Symmetrically limiting risk score growth within both an ACO’s assigned beneficiary population and its region is expected to improve the accuracy of the regional update factors, for ACOs operating in regional service areas with high-risk score growth, and maintain a disincentive against coding intensity for ACOs with high market share by adjusting the regional risk score growth cap based on ACO market share. We believe capping regional risk score growth will strengthen incentives for ACOs to form or continue to operate in regions with high-risk score growth and thereby incentivize ACOs to care for higher risk beneficiaries. This approach also offers an incentive for potential applicant ACOs that may be examining recent risk score growth in their region and making the decision whether to participate in the Shared Savings Program.
Updating How Benchmarks Are Risk Adjusted
On March 31, 2023, CMS released the Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, which finalized the transition to a revised CMS-HCC risk adjustment model, the 2024 CMS-HCC risk adjustment model, Version 28 (V28). Currently, to perform Shared Savings Program risk adjustment calculations, we use the CMS-HCC risk adjustment model(s) that is applicable for a particular calendar year to identify a Medicare FFS beneficiary’s prospective HCC risk score for the corresponding benchmark year or performance year. Based on a Shared Savings Program analysis, we have found that using different CMS-HCC risk adjustment models, between the benchmark and performance years, negatively impacts ACOs with the highest average risk scores, ACOs participating in two-sided models, and ACOs that have been in the Shared Savings Program longer.
To strengthen risk adjustment in the Shared Savings Program and consistently apply V28 in the Shared Savings Program context, we are finalizing a policy under which CMS will apply the same CMS-HCC risk adjustment model used in the performance year for all benchmark years, when calculating prospective HCC risk scores to risk adjust expenditures used to establish, adjust, and update an ACO’s benchmark. This policy is applicable for agreement periods beginning on January 1, 2024, and in subsequent years. This will be the same three-year phase-in as Medicare Advantage to the revised 2024 CMS-HCC risk adjustment model (V28). The underlying model we will use for performance year (PY) 2024 will be 67% of the current 2020 CMS-HCC risk adjustment model (Version 24) and 33% of V28.
Eliminating the Negative Regional Adjustment on the Benchmark to Encourage Participation by ACOs Caring for Medically Complex, High-Cost Beneficiaries
With the policies finalized in the CY 2023 PFS final rule (87 FR 69915 through 69923), we sought to reduce the impact of negative regional adjustments in several ways for agreement periods beginning on January 1, 2024, and subsequent years, to incentivize ACOs that serve high-cost beneficiaries to join or continue to participate in the Shared Savings Program. CMS is finalizing its proposed changes to eliminate overall negative regional adjustments to further support participation by ACOs serving medically complex and high-cost populations. ACOs that would have had an overall negative regional adjustment under the methodology adopted in the CY 2023 PFS final rule will benefit from this policy.
Modifications to the Step-Wise Beneficiary Assignment Methodology and Approach to Identifying the Assignable Beneficiary Population
We are finalizing our proposal to modify the beneficiary assignment methodology, and the definition of an assignable beneficiary, to better account for beneficiaries who receive primary care from nurse practitioners, physician assistants, and clinical nurse specialists during the 12-month assignment window and who received at least one primary care service from a physician used in assignment in the preceding 12 months. For the performance year beginning on January 1, 2025, and subsequent performance years, we will apply a revised step-wise beneficiary assignment methodology that will include a new step three, which will use an expanded window for assignment (a 24-month period that includes the applicable 12-month assignment window and the preceding 12 months) to identify additional beneficiaries for assignment. Consistent with the use of an expanded window for assignment in a revised step-wise assignment methodology, we are finalizing our proposal to revise the definition of an “assignable beneficiary” to include additional beneficiaries who will be identified using the expanded window for assignment.
These changes will improve equity and access to ACOs, since individuals who receive primary care from these practitioner types are more likely to come from underserved communities. These changes are also aligned with HHS’ Initiative to Strengthen Primary Care because, by better recognizing and considering the variety of clinician types who participate in delivering high-quality primary care, these changes advance coordinated, integrated primary care and promote health equity. Finally, this assignment methodology change is expected to grow assignable beneficiaries by more than 760,000, many of whom would be eligible to be assigned to ACOs.
Modifications to Advance Investment Payments Policies
In the CY 2023 PFS final rule, we finalized a new payment option for eligible Shared Savings Program ACOs entering agreement periods beginning on or after January 1, 2024, to receive advance shared savings payments (87 FR 69782 through 69805). This payment option is referred to as “advance investment payments” or “AIP.”
In the CY 2024 PFS final rule, we are finalizing a series of modifications to refine AIP policies to better prepare for initial implementation of AIP, beginning with ACOs entering agreement periods on January 1, 2024. We are finalizing our proposal to better support ACOs that are prepared to progress to performance-based risk by allowing them to advance to two-sided model levels within the BASIC track’s glide path beginning in performance year three of the agreement period in which they receive advance investment payments. We are also finalizing our proposal to allow an ACO receiving advance investment payments to early renew its participation agreement after its second performance year without triggering full recoupment of advance investment payments at that time. We are finalizing our proposal to require ACOs to report spend plan updates and actual spend information to CMS in addition to publicly reporting such information. We are finalizing our proposal to modify AIP termination policies to specify that CMS will immediately terminate advance investment payments to an ACO for future quarters if the ACO voluntarily terminates from the Shared Savings Program. We are also finalizing our proposal to codify that ACOs receiving advance investment payments may seek reconsideration review of all quarterly payment calculations. These policies will be effective beginning January 1, 2024.
For a fact sheet on the CY 2024 Quality Payment Program final rule changes, please visit the QPP Resource Library (cms.gov).
 Refer to Jacobs DB, et al. “Aligning Quality Measures across CMS — The Universal Foundation”. New England Journal of Medicine (March 2, 2023), available at .
 For more details, refer to Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (March 31, 2023), available at .
 Refer to U.S. Department of Health and Human Services, Request for Information (RFI): HHS Initiative to Strengthen Primary Health Care, 87 FR 38168 through 38170 (June 27, 2022), and U.S. Department of Health and Human Services, Fact Sheet: HHS Initiative to Strengthen Primary Health Care Seeking Public Comment, June 27, 2022, available at https://www.hhs.gov/about/news/2022/06/27/fact-sheet-hhs-initiative-to-strengthen-primary-health-care-seeking-public-comment.html.