Letters of Intent are due on August 30, 2013. Applications are also due on August 30, 2013. Questions about the Letter of Intent should be directed to firstname.lastname@example.org.
ESRD Seamless Care Organizations (ESCOS)
Who may form an ESCO?
The following providers are eligible to form an ESCO that may apply to participate in the Model:
- Medicare Certified dialysis facilities, including facilities owned by large dialysis organizations (LDOs), facilities owned by small dialysis organizations (SDOs), hospital-based facilities, and independently-owned dialysis facilities;
- Nephrologists and/or nephrology practices; and
- Other Medicare enrolled providers and suppliers (other than durable medical equipment, prosthetics, orthodics and supplies (DMEPOS) suppliers, ambulance suppliers, and drug/device manufacturers).
In the revised RFA published on July 26, 2013, what are the changes to the legal entity requirements?
As stated on page 17 of the revised RFA, each ESCO must have at least one of each of the following included as participant owners:
- A dialysis facility;
- Either a nephrologist that is not a full-time or part-time W-2 employee of an ESCO participant owner dialysis facility or a nephrology practice that is neither fully nor partially owned by, nor has an ownership stake in, an ESCO participant owner dialysis facility. Nephrologists and nephrology practices that are paid as independent contractors of an ESCO participant owner dialysis facility may satisfy this requirement.
CMS no longer requires that each ESCO include at least one other type of Medicare provider or supplier other than a dialysis facility or nephrologist/nephrology group practice as a participant owner. As stated on page 34 of the revised RFA, an applicant should demonstrate that its organizational structure promotes the goals of the model by including a diverse set of providers that will demonstrate a commitment to high quality, coordinated care to beneficiaries.
CMS does not require a re-submission of a letter of intent (LOI) if the ESCO participant owners have now changed for an applicant because of the changes in the mandatory requirements. While the LOI is required for submission of an application, the information provided is non-binding.
What is an ESCO participant owner? How about a participant non-owner?
ESCO participants may be either an ESCO participant-owner or an ESCO participant non-owner. ESCO participant-owners have an increased level of accountability to CMS in that they must (1) be signatories to the ESCO Model Participation Agreement with CMS, (2) have an ownership stake in the ESCO, and (3) assume downside risk in the event of shared losses and be subject to recoupment for non-payment. ESCO Participant-owners must assume downside risk at a level that is equivalent to a minimum of 50% of their portion of the ESCO’s total revenue multiplied by the ESCO’s total shared losses. All dialysis facilities and nephrology group practices must participate in the model as participant-owners.
ESCO participant non-owners do not have to sign the ESCO Model Participant Agreement or take an ownership stake in the ESCO. They must, however, have a contractual relationship with the ESCO that requires them to comply with the terms and conditions of the ESCO Model Participation Agreement. ESCO participant non-owners are not required to assume downside risk, but are allowed to do so.
Are there any limitations on who can partner in forming an ESCO?
Yes. First, dialysis facilities owned by different LDOs cannot apply as part of the same ESCO. Second, dialysis facilities owned by LDOs cannot partner with dialysis facilities owned by non-LDOs—unless non-LDOs in the Medicare core-based statistical areas (CBSA) would be unable to combine to meet the minimum beneficiary threshold required to participate in the Model. In that case, an LDO would be permitted to partner with one or more non-LDOs to ensure their ability to participate in the Model. There are no limitations on partnerships among non-LDO organizations/facilities in the submission of a single ESCO application.
What Types of Providers are Eligible to Participate in an ESCO?
Medicare-enrolled providers of services and suppliers are eligible to participate in the Comprehensive ESRD Care model. This includes physicians, non-physician practitioners, and other healthcare suppliers that are not (1) Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers, (2) ambulance suppliers, and (3) drug and/or device manufacturers. Of note, Medicare-enrolled providers of services that are also DMEPOS suppliers are eligible to participate in the Model.
Other than Dialysis facilities and Nephrologists, are ESCOs required to include particular provider types in their ESCO? What types of providers or suppliers could participate in an ESCO?
ESCOs must include a dialysis facility and a nephrologist. Other than the requirement that an ESCO have at least one Medicare enrolled provider or supplier that is not a nephrologist or dialysis facility (other than DMEPOS suppliers, ambulance suppliers, and drug/device manufacturers) CMS does not require an ESCO to include any particular type of provider or supplier. However, CMS anticipates that an extended team of skilled clinical and non-clinical providers and practitioners would support the care of ESRD patients beyond the dialysis services covered in the ESRD Prospective Payment System (PPS). Examples of physicians and non-physician practitioners that may be appropriately involved in an interdisciplinary team include, but are not limited to: general internists, endocrinologists, cardiologists, vascular surgeons, podiatrists, psychiatrists, nurse practitioners, physician assistants, registered nurses/licensed practical nurses, licensed clinical social workers, nurse case managers, dieticians/nutritionists, health educators, pharmacists, behavioral health specialists, and community health workers/patient navigators.
If I am already participating in another Shared Savings Program, am I eligible to participate in this initiative?
ESCO Participants are defined by a Taxpayer Identification Number (TIN). Each ESCO participant must have a Medicare-enrolled TIN through which its participating ESCO providers/suppliers bill. It is important to note that not all of the providers/suppliers that bill under ESCO participant’s TIN are required to participate in the Model as ESCO providers/suppliers.
All current participants in the Medicare Shared Savings Program defined by a TIN are NOT eligible to participate in the Comprehensive ESRD Care Initiative as ESCO Participants. Individual providers/suppliers participating in other shared savings programs, with the exception of primary care providers participating in the Pioneer ACO model, are eligible to participate in the Comprehensive ESRD Care Initiative subject to the rules of those other shared saving programs. All otherwise eligible ESCO providers/suppliers may also participate in multiple ESCOs. The only exception to this rule is dialysis facilities. Because beneficiary matching to an ESCO is based on where a beneficiary receives dialysis care, dialysis facilities may only participate in one ESCO.
ESCO Market Areas
How is the market area defined? By where an ESCO operates?
The ESCO rather than the CMS defines the market where an ESCO will operate. The area that an ESCO defines as its market area may be no larger than two contiguous Medicare core-based statistical areas (CBSA), with permissible inclusion of contiguous rural counties that are not included in a Medicare CBSA. An exception would be in the case of rural-based applicants not included in any Medicare CBSA. For these applicants, the market area of the ESCO will be defined based on a geographic unit no larger than a state.
The Letter of Intent (LOI) and Application Process
Can my organization file a Letter of Intent if we have not yet identified all participants?
Yes. However, all applicants should identify at least 50% of their proposed participants in the Letters of Intent.
If my organization submits a Letter of Intent, are we then required to submit an application? What if we no longer wish to apply?
No. The Letters of Intent are non-binding, and an organization filing a Letter of is not required to apply or participate in the model. Because Letters of Intent are non-binding, an organization filing a Letter of Intent need not withdraw it or take any other action if it decides not to file an application.
Must my organization update its Letter if Intent if the participants listed in it change prior to my organization submitting an application?
No, but any changes should be reflected in the information submitted with your organization’s application.
Once my organization submits an application, can it withdraw it? What if my organization needs to amend its application to remove specific CMS Certification Numbers (CCNs) and/or National Provider Identifier (NPI) numbers from an application?
Applicants seeking to withdraw their application must submit an electronic withdrawal request to CMS via the following mailbox: ESRD-CMMI@cms.hhs.gov. The request must be submitted as a PDF on the organization’s letterhead and signed by an authorized corporate official. It should include: the applicant organization’s legal name; the organization’s primary point of contact; the full and correct address of the organization; and a description of the nature of the withdrawal. Applicants seeking to withdraw only specific CMS Certification Numbers (CCNs) and/or National Provider Identifier (NPI) numbers from a pending application must follow the same process outlined above.
How will payments to ESCOs be determined?
The payment arrangments applicable to ESCOs are described in detail in the Request for Application (RFA). The Comprehensive ESRD Care model will use a shared savings and losses model, under which ESCOs will share savings, and in some instances be held accountable for a portion of losses, experienced by Medicare for the particular ESCO’s matched beneficiaries. To assess savings or losses to Medicare, CMS will develop an expenditure “baseline,” based on historical Medicare Parts A and B expenditures incurred for beneficiaries who would have been matched to the ESCO in each of the three years prior to start of the first performance year for this Model.
CMS will then adjust the baseline forward to develop an expenditure benchmark for the beneficiaries matched to the ESCO. CMS will calculate savings or losses based on a comparison of the benchmark and the actual Medicare FFS Part A and B expenditures for the matched population in a given performance year. The savings will be adjusted based on quality performance.
As described in the RFA, the Comprehensive ESRD Care model includes three possible payment arrangements. One of these arrangements applies to ESCOs that contain one or more large dialysis organization (LDO) participant owners, and the other two are options for ESCOs that do not have any LDO participant owners. The extent to which the ESCOs may share in savings or losses will vary according to which payment arrangement they select.
In the revised RFA published on July 26, 2013, what are the changes to the LDO 2-sided rick track?
In the LDO 2-sided risk track, CMS is no longer requiring that ESCOs start the program with a 1% guaranteed discount on the expenditure benchmark in the first performance year. In the revised RFA, the LDO 2-sided risk track has a 0% guaranteed discount off the expenditure benchmark in PY1, a 1% discount in PY2, a 2% discount in PY3 and a 3% discount in PY4 and PY5.
In addition, as stated on page 33 of the revised RFA, ESCOs participating in all risk tracks will have the option of truncating a matched beneficiary’s total annual Medicare Parts A and B FFS per capita expenditures, for each benchmark and performance year, to minimize variation from catastrophically large claims. The truncation point for expenditures associated with a matched beneficiary in a given benchmark or performance year will be set at the 99th percentile of annual Medicare Parts A and B expenditures for non-ESRD beneficiaries plus the difference between the average annual Medicare Parts A and B expenditures for ESRD beneficiaries and the average annual Medicare Parts A and B expenditures for non-ESRD beneficiaries. The resulting truncation point is expected to be between the 90th and 95th percentile of annual Medicare Parts A and B expenditures for ESRD beneficiaries. To ensure appropriate comparability, benchmarks will be trended using the same truncation method for the national average annual Medicare Parts A and B expenditures for beneficiaries with ESRD.
Will the cost of items and services provided to beneficiaries prior to their deaths be accounted for in the baseline and benchmark expenditure calculations where the beneficiaries who would have been matched to an ESCO die before the start of the first performance year?
As stated on page 30 of the RFA, if a beneficiary dies during [a] base year or any of the performance years, all costs incurred during the measurement period will be counted in the expenditure calculations.
For purposes of clarification, the expenditure baseline calculation is comprised of expenditures for beneficiaries who would have been matched to the ESCO during the three years preceding the first performance year, based on the eligibility requirements described in the RFA. The cost of items and services provided to beneficiaries prior to their deaths will be included in both the expenditure baseline and expenditure benchmark.
How will an ESCO’s shared savings payment be accounted for during the rebasing of the expenditure baseline calculation in performance year PY4 and PY5?
As stated on page 33 of the RFA, for ESCOs that choose to continue participation in the Model for PY4 and PY5, the benchmark would be rebased “using actual expenditure data from PY1-PY3 including net shared savings dollars minus any discount as baseline expenditures.”
For purposes of clarification, the first three performance years will be considered the base years in calculating the new expenditure baselines for PY4 and PY5. The PY4 expenditure baseline is the average of the total annual expenditures for the first, second, and third base years. For purposes of the PY4 expenditure baseline calculation, the total annual expenditures for the first base year is the sum of the total actual Medicare Parts A and B expenditures for matched beneficiaries in PY1 plus the shared savings payment, if any, made by CMS to the ESCO for PY1. The total annual base year expenditures for the second and third base years is the sum of the total actual Medicare Parts A and B expenditures for matched beneficiaries in PY2 or PY3, as applicable, plus the shared savings payment, if any, that would have been made by CMS to the ESCO for the relevant performance year if the expenditure benchmark for the relevant performance year was calculated without a reduction for applicable guaranteed discount.
Before each ESCO is required to notify CMS whether it will continue to participate in the Model for PY4 and PY5, CMS will provide to each ESCO an estimated expenditure baseline for PY4. The PY4 expenditure baseline estimate will be calculated using final expenditure data for PY1 and PY2 and available expenditure data for a portion of PY3. After complete data is available for PY3, CMS will calculate a final PY4 expenditure baseline, which will be used to calculate shared savings or losses for PY4. The PY4 final expenditure baseline will be trended forward to calculate the PY5 expenditure baseline and PY5 benchmark.
How will beneficiaries be assigned to an ESCO?
ESCOs will not enroll beneficiaries in the Model—nor will beneficiaries be permitted to sign up for the Model. CMS will prospectively “match” eligible beneficiaries through a claims-based process. The beneficiary matching process identifies the Medicare beneficiaries with ESRD for whom CMS will hold an ESCO clinically and financially accountable. Beneficiaries will maintain full fee-for-service benefits, including the freedom to receive services from any Medicare-participating provider at any time.
After the initial historical match, how will CMS match beneficiaries under the Comprehensive ESRD Care model?
CMS will match beneficiaries each quarter to an ESCO based on dialysis utilization using a “first touch” approach—meaning that a beneficiary’s first visit to a given dialysis facility during a particular period will prospectively match that beneficiary to the dialysis facility, and by extension the ESCO, for the duration of the model unless the beneficiary loses eligibility based on the criteria described in the RFA. This is in contrast to other approaches used in the Shared Savings Program or the Pioneer ACO Model that generally rely on a plurality of primary care services over an extended period of time.