The Medicare-Medicaid Accountable Care Organization Model team hosted a webinar for states that are participating in the Medicare-Medicaid ACO Model on Thursday, June 15, 2017. Participating states have the opportunity to share in Medicare savings generated by Medicare-Medicaid ACOs in their state. This webinar covered the methodology for calculating those shared savings. - - - CMS Innovation Center http://innovation.cms.gov We accept comments in the spirit of our comment policy: http://newmedia.hhs.gov/standards/comment_policy.html CMS Privacy Policy http://cms.gov/About-CMS/Agency-Information/Aboutwebsite/Privacy-Policy.html

1. The Medicare-Medicaid Accountable Care
Organization (MMACO) Model
Welcome to Today’s Webinar
We will begin at 1:00 PM ET
Dial-in: 1-800-832-0736
Meeting Room: *6291628#
Note: All attendee phone lines are muted to prevent audio feedback

2. The Medicare-Medicaid Accountable Care
Organization Model
Medicare State
Shared Savings
Brede Eschliman
Center for Medicare and
Medicaid Innovation (CMMI)

3. Tips for a Successful Event
• Telephone
– All attendee phone lines are muted
– This session will be recorded for posting online
• Webinar Environment Features
– Please submit any questions you have in the Q
& A box. The model team will review and post
any unanswered questions on the model team
website.
– Download the slides in the box in the lower
right corner of your screen
– A short survey will be available at the end of
the presentation

4. MMACO Model Webinars
• May 11, 2017: Model Overview
Recording Link: https://innovation.cms.gov/resources/mmaco-webinar.html
• June 8, 2017: Beneficiary Assignment and Financial Methodology
Recording Link: Coming soon!
• TODAY: Medicare State Shared Savings Methodology
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5. Two Levels of Reconciliation
O
ACO
ACO-level reconciliation uses a
benchmark that includes only
that ACO’s expenditures
(covered in previous webinar)
State-level reconciliation
aggregates all of the state’s
MMACOs’ performanceState
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6. Medicare State Shared Savings
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7. Medicare State Shared Savings
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8. State Shared Savings Methodology
1) Three preconditions must be met in order for states to be
eligible to share in Medicare savings
If preconditions are met 
2) The Medicare state shared savings methodology determines
what amount of Medicare savings, if any, to share with states
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9. State Shared Savings Methodology
1) Three preconditions must be met in order for states to be
eligible to share in Medicare savings
If preconditions are met 
2) The Medicare state shared savings methodology determines
what amount of Medicare savings, if any, to share with states
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10. Medicare State Shared Savings
Preconditions
Medicare state
shared savings
methodology
Not used for
Medicare state
shared savings
Medicare Shared
Savings Program
Target Population
Included in
MMACO
Target Population
Additional Subset
of MMACO Target
Population
(optional)
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11. Preconditions
Preconditions
Medicare state
shared savings
methodology
Not used for
Medicare state
shared savings
Medicare Shared
Savings Program
Target Population
Included in
MMACO
Target Population
Additional Subset
of MMACO Target
Population
(optional)
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12. Preconditions
All three preconditions must be met in order to proceed with
Medicare state shared savings calculations
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13. State Shared Savings Methodology
1) Three preconditions must be met in order for states to be
eligible to share in Medicare savings
If preconditions are met 
2) The Medicare state shared savings methodology determines
what amount of Medicare savings, if any, to share with states
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14. State Shared Savings Methodology
Preconditions
Medicare state
shared savings
methodology
Not used for
Medicare state
shared savings
Medicare Shared
Savings Program
Target Population
Included in
MMACO
Target Population
Additional Subset
of MMACO Target
Population
(optional)
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15. State Shared Savings Diagram
Step 1
Aggregate state
Medicare savings
Preliminary state
shared savings
Net out aggregate
shared savings/
shared losses
Steps 2-4
Do federal
Medicaid
losses exist?
• No
• Yes, but not
meeting or
exceeding the MSF
Net out federal
Medicaid losses
from preliminary
state shared savings
Multiply
preliminary state
shared savings by
state quality score
Yes, meeting or
exceeding the MSF Multiply result by
state quality score
Quality-adjusted
state shared savings
Steps 5-6 Quality-adjusted
state shared
savings
Apply
lesser of
caps
Apply 50%
sharing rate
Final state shared
savings payment
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16. Step 1: Preliminary State Shared Savings
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17. Step 1: Preliminary State Shared Savings
• Calculate the aggregate state Medicare savings for the
beneficiaries who are assigned to both the MMACO Model
and the Medicare Shared Savings Program
• Net out the Medicare shared savings paid to/ shared losses
received from MMACOs from the aggregate state Medicare
savings for this population
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18. Steps 2-4: Federal Medicaid Losses and Quality Adjustment
Step 1
Aggregate state
Medicare savings
Preliminary state
shared savings
Net out aggregate
shared savings/
shared losses
Steps 2-4
Do federal
Medicaid
losses exist?
• No
• Yes, but not
meeting or
exceeding the MSF
Net out federal
Medicaid losses
from preliminary
state shared savings
Multiply
preliminary state
shared savings by
state quality score
Yes, meeting or
exceeding the MSF Multiply result by
state quality score
Quality-adjusted
state shared savings
Quality-adjusted
state shared
savings
Apply
lesser of
caps
Apply 50%
sharing rate
Final state shared
savings payment
Steps 5-6
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19. Steps 2-3: Accounting for Federal Medicaid Losses
• Determine whether any federal Medicaid losses for this
population must be netted out from the aggregate Medicare
savings
– If federal Medicaid savings exist
No federal Medicaid losses are netted out
– If federal Medicaid losses exist
• If losses do not meet or exceed the state’s Medicaid
Significance Factor (MSF)
 No federal Medicaid losses are netted out
• If losses do meet or exceed the state’s MSF
 All federal Medicaid losses are netted out
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20. • Calculate the state aggregate quality score
• Multiply the preliminary state shared savings by the
aggregate quality score
Step 4: Quality Adjustment
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**The quality scores will include the entire population of beneficiaries assigned to
MMACOs through the Shared Savings Program, not only those beneficiaries
concurrently assigned to the MMACO Model for Medicaid accountability**

21. Quality Score Population
Aggregate quality score population
Medicare state
shared savings
methodology
Not used for
Medicare state
shared savings
Medicare Shared
Savings Program
Target Population
Included in
MMACO
Target Population
Additional Subset
of MMACO Target
Population
(optional)
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22. Steps 5-6: Cap and Sharing Rate
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23. Step 5: Cap
• Cap state shared savings at the lesser of…
– The preliminary state savings from step 3 with any federal
net Medicaid losses subtracted or any federal net Medicaid
savings added
– 6% of the aggregate state Medicare benchmark for Shared
Savings Program beneficiaries concurrently assigned to the
MMACO Model for Medicaid accountability
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24. Step 6: Sharing Rate
• Apply a sharing rate
– CMS will apply the sharing rate of 50 percent to the value
from Step 5 and pay shared savings to the state.
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25. State Shared Savings Diagram
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26. More Information
• Innovation Center website
https://innovation.cms.gov/initiatives/medicare-medicaid-aco-model/
• Request for Letters of Intent
https://innovation.cms.gov/Files/x/mmaco-loi.pdf
• FAQs
https://innovation.cms.gov/Files/x/mmaco-faq.pdf
• Email inbox
MMACO@cms.hhs.gov
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27. Questions?
• We appreciate your feedback on this webinar
• You will have the opportunity to complete a brief survey shortly
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