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What the Shared Savings Program Final Rule Means for CI Programs

by Sarah O'Hara

With the release last week of CMS’ final rule for the Medicare Shared-Savings Program, many clinical integration (CI) programs may be wondering what the changes mean for them. Our take: with lower eligibility hurdles and less onerous participation criteria, joining the program is now a more attractive prospect for providers, and CI programs especially—already down the road toward building a care management infrastructure—should take a second look. Read on for more of our thoughts on what the final rule may mean for CI programs.

Five key takeaways for CI programs

The fundamental structure of the Shared Savings Program (SSP) remains unchanged. But the Advisory Board’s assessment is that the final rule incorporates a number of revisions that may make participation more attractive for providers. CI programs in particular should consider the following five takeaways as they assess their own response.

  • Reduced eligibility requirements allow CI programs to more easily leverage existing infrastructure and processes; fewer changes now needed to successfully transition to a Medicare ACO
  • Even with fewer quality metrics, participation still requires disproportionate emphasis on primary care initiatives
  • For CI programs with adequate infrastructure to meet eligibility bar, more favorable financial model reduces participation risk
  • For CI programs just short of readiness, new opportunities exist to capitalize advanced infrastructure development at independent physician practices
  • Elimination of mandatory antitrust review reduces eligibility burden, but voluntary screening may still be advisable

Each of these areas is discussed in more detail below.


1. Reduced eligibility and quality requirements allow CI programs to more easily leverage existing infrastructure and processes; fewer changes now needed to successfully participate as a Medicare ACO

For many organizations, the primary concern about the proposed SSP rule was the high level of prescription around ACO governance, management and other structural areas. Indeed, CMS notes that of the 1,320 public comments received on the draft rule, “those in disagreement generally found the proposed requirements to be too prescriptive and burdensome.” Many CI programs and large medical groups complained publicly that the strict eligibility requirements would force them to make unwanted changes to processes and structures that were otherwise working just fine to provide high-quality, low-cost care.

Although the final rule still carries a significant level of prescription around ACO structure, CMS has notably relaxed requirements in several areas that were particularly controversial for CI programs, as described below:

 Requirement Area Proposed Requirement  Final Rule 


  • Each participating organization/practice must have representation on governing body
  • Governing body must include a Medicare beneficiary  
  • ACO participants must simply have opportunity for “meaningful participation” in governance 
  • ACO may propose alternative ways to involve beneficiaries in governance

Leadership and Management 

  • Physician medical director must be a full-time position
  • ACO must maintain physician-led quality assurance and process improvement committee 
  • Physician medical director may be a part-time position
  • ACO must simply define how it will conduct QA/PI; activities may be led by a non-physician “health care professional”

Information Technology 

  • Half of ACO primary care providers required to achieve meaningful use of EHRs by start of second performance year
  • EHR use also considered in quality measures, weighted equally to other measures 
  • EHR use no longer a prerequisite for participation
  • EHR use still considered among quality assessment, weighted double to other measures

Mid-Cycle Structural Changes

  • New participants may not be added during three-year agreement period
  • ACO may add new participants during agreement period; must notify CMS within 30 days of change

The net result of these changes: CI programs that are operating successfully on the commercial market should now be able to meet the eligibility bar without (or at least with fewer) significant alterations to the governance and performance improvement infrastructure they already have in place.

2. Even with fewer quality metrics, participation still requires disproportionate emphasis on primary care initiatives

Beyond eligibility, CMS has also reduced by half (from 65 to 33) the number of quality measures that ACOs are required to report and that will be used to adjust bonus payments. As with the structural requirements discussed above, this change makes it more likely that CI programs will be able to meet the quality bar without significant alterations to their current performance metric sets.

However, it’s also worth noting that even with a reduced quality compliance burden, the metrics remain heavily focused on primary care. Many CI programs, by contrast, typically concentrate their efforts on ensuring they have a meaningful number of metrics for every participating specialty area, in order to demonstrate a legitimate commitment to performance improvement as required by antitrust authorities.

As a result, CI networks planning to participate in the SSP may find they need to re-think their approach to initiatives, increasing the emphasis placed on primary care metrics—and the resulting incentive payout to which PCPs are entitled. Indeed, some progressive CI programs are already designing incentive programs that allow PCPs to “double dip,” carving out a separate portion of the bonus pool (or weighting primary care metrics more heavily) to reflect the increased quality and care management burden placed on those physicians.

3. For CI programs with adequate infrastructure to meet eligibility bar, more favorable financial model reduces participation risk

Of course, achieving quality standards is only part of what ACOs must do to realize a bonus. The final rule changes nothing about the ACO’s more fundamental task: building sophisticated capabilities in disease management, patient activation, and cross-continuum care coordination to reduce unnecessary utilization and generate cost savings. These capabilities are so core to ACO success that CMS continues to condition eligibility on having an infrastructure to meet criteria for patient-centered care, effective clinical guidelines, decision support tools, and other such competencies.  For CI programs just starting out with basic quality and efficiency metrics, therefore, SSP participation may still be out of reach in the short term, even with a more favorable final rule.

But more sophisticated CI networks are better positioned, especially given changes that make the financial impact of participation more favorable. Most notably, CMS has changed “Track 1” of the program to be “upside only” for all three years of participation, rather than requiring as before that ACOs shift in the third year to a model in which they would have to pay back CMS for any losses. This lower-risk obligation matches much more closely the type of shared-savings contract that many CI programs are already negotiating on the commercial market. CI programs will still need adequate care management infrastructure and experience to pass the SSP eligibility screen, but once in the program, they can get their feet wet without the potential for heavy losses—a change that may make SSP participation significantly more palatable, especially to physicians. (Click here to read about other favorable changes to the financial model.)

4. For CI programs just short of readiness, new opportunities exist to capitalize advanced infrastructure development at independent physician practices

Meanwhile, two additional regulatory changes may also help CI programs that have some infrastructure and experience with performance-based contracting, but need a little additional support to reach full ACO readiness. The first is relevant for CI programs sponsored by a hospital, while the second is relevant for CI programs built through an independent practice association (IPA).

For hospital-sponsored CI programs: New fraud and abuse waivers

Although CI creates a safe harbor for physician joint contracting under antitrust law, no similar safe harbor protects hospital-based CI programs from fraud and abuse regulations (Stark, Anti-Kickback Statute and Civil Monetary Penalty). As a result, hospitals working to integrate physicians through CI must tread carefully in funding infrastructure for physicians and designing payment incentives.

Last week, however, the HHS Office of Inspector General released an interim final rule that contains five new fraud and abuse waivers for ACOs. Notably, one of these waivers actually applies before the organization has joined the SSP—a “pre-participation waiver” that lifts Stark, Anti-Kickback and Civil Monetary Penalty restrictions for any organization with documented, “bona fide” plans to apply for the program within a year of using the waiver.

Language within the OIG rule indicates that this waiver, as well as a similar broad waiver that applies to ACOs after they’ve joined the SSP, could be used for commercial patients as well as Medicare patients. Although we’re still working to confirm this assessment with attorneys, our read of these new waivers is that they could therefore provide hospital-based CI programs with a new opportunity to capitalize infrastructure development at independent physician practices, as long as the organization was actively planning to apply to the SSP. In other words, hospitals would have greater flexibility to directly subsidize care management investments across the ambulatory network, building up infrastructure needed to succeed as a Medicare ACO, but also useful for achieving returns under commercial CI contracts

For physician-only CI programs: Advance Payment Initiative

Meanwhile, CI programs that are entirely physician-run (e.g., through an independent practice association) may be interested in the new Advance Payment Initiative, which will allow ACOs without large inpatient facilities to receive an advance on their potential shared-savings payments to help defray the cost of investments in care management infrastructure and to smooth cash flow concerns. For more information on this initiative, click here, and for our earlier take on how the initiative might be particularly relevant to CI programs, click here.

5. Elimination of mandatory antitrust review reduces eligibility burden, but voluntary screening may still be advisable

Finally, all CI programs will need to consider their approach to the SSP from an antitrust perspective.

On the upside, CMS and the antitrust agencies have eliminated the controversial requirement that organizations with high market share undergo a mandatory antitrust review before joining the program—a  proposal that received significant pushback from provider groups and attorneys (including the argument that CMS lacked the legal authority to delegate decisions over ACO eligibility to the FTC and DOJ). This is especially good news for large CI programs that have the capability to join the SSP, but might have been dissuaded by the high antitrust compliance burden.

Nevertheless, it is worth noting that even without the mandatory screen, ACOs will face higher antitrust scrutiny than CI programs operating conventionally in the commercial market. Traditionally, the FTC and DOJ do not investigate CI programs unless someone (a payer or competitor, for example) raises a complaint. By contrast, CMS will proactively share ACOs’ application forms and claims data with the antitrust agencies, who will use that information in unspecified ways to “assess and monitor ACOs’ effects on competition and take enforcement action if appropriate.” CMS has also asked the FTC and DOJ to conduct a formal study examining how ACOs impact commercial health care quality and costs, and reserves the right to again consider more strict antitrust-related eligibility criteria in the future.

So the regulators will be watching how ACOs impact the commercial market closely. And the risk of non-compliance is high—CMS promises to expel from the SSP any ACO found to have undue commercial power, while the antitrust authorities would also presumably shut down joint payer negotiations on the commercial side. As a result, CMS actively encourages would-be ACOs with more than 30 percent market share to apply voluntarily for an expedited pre-approval antitrust review. The antitrust agencies say they will turn these reviews around within 90 days, at the end of which the ACO will be told either that it does not raise competitive concerns, potentially raises competitive concerns, or likely raises competitive concerns.

The open question here is whether the benefit of obtaining that advance review—namely, the reduced risk of an antitrust investigation later down the road—outweighs the costs. Notably, the agencies appear to have done nothing to reduce the application burden for an antitrust review; ACOs would still need to calculate primary service area shares and submit a considerable amount of additional information, a costly process that some have speculated could at least initially negate bonuses received through the SSP. CI programs interested in applying for the SSP should thus work with an attorney to consider all the potential variables involved in making this decision.

How do these changes affect your strategy?

In all, the changes to the SSP final rule have been well-received by provider groups, with many saying they’ll take a second look at the program. At the CI Project, we’re curious to hear our members’ thoughts on this. Is your organization now more bullish on applying to the Shared Savings Program? Or do these changes have little impact on your decision not to participate? Feel free to share your thoughts by posting a comment here, or by emailing me directly at

For more information

  • The Health Care Advisory Board is currently presenting early insights on the final SSP rule in a webconference entitled "The Medicare Shared Savings Program: Final Rule." To register for an upcoming session or access a slide deck and recording of this webinar, click here.
  • To read the CMS Shared-Savings Program final rule, click here.
  • To read the FTC and DOJ policy on ACO antitrust enforcement, click here.
  • To read the OIG final rule on fraud and abuse waivers, click here.