Health Reform WK-EDGE Accountable care proposal would rework benchmarks, make regional adjustments
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Thursday, February 4, 2016

Accountable care proposal would rework benchmarks, make regional adjustments

By Sarah E. Baumann, J.D.

A Proposed rule released by CMS would change the way the agency calculates benchmarks for accountable care organizations (ACOs) that continue to participate in the Medicare Shared Savings Program (MSSP) after an initial three-year agreement period, in part by basing benchmarks on regional, as opposed to national, trends. It would also make changes to the program to encourage MSSP participants to accept more risk and establish polices allowing the agency to reopen payment determinations to make corrections regarding shared savings and losses. Comments on the rule are due no later than March 28, 2016 (Proposed rule, 81 FR 5823, February 3, 2016).

MSSP. Section 3022 of the Patient Protection and Affordable Care Act (P.L. 111-148) mandated the establishment of a shared savings program. The MSSP incentivizes quality performance by allowing ACO participants to share in savings by either participating in a one-sided, risk-free model (Track 1) for a period of time, or by sharing in both savings and losses by participating in riskier two-sided model (Track 2 or Track 3). ACOs only share in savings if they meet certain quality and savings requirements and have per capita costs for beneficiaries that are below specified benchmarks and above a minimum savings rate. The Proposed rule builds on a June 2015 Final rule’s promise to encourage ACOs to take on additional risk by resetting the benchmark in second or subsequent ACO agreement periods (see MSSP changes encourage ACOs to take on greater performance-based risk, June 9, 2015).

Historical benchmarks. Currently, CMS sets an average per capita historical benchmark based on Medicare Part A and B expenditures for beneficiaries who would have been assigned to the ACO in each of the three years prior to the start of the ACO’s agreement period. It adjusts the ACO’s historical benchmark on an annual basis for changes during the performance period in the health status and demographic factors of the ACO’s assigned beneficiaries, and updates the benchmark on an annual basis based on the projected absolute amount of growth in national per capita expenditures for Part A and B fee-for-service services.

Beginning on January 1, 2017, the Proposed rule would base the historical benchmark on regional trend factors rather than national trend factors, and remove the adjustment to account for savings generated under the prior agreement period. It would make an adjustment to reflect a percentage of the difference between regional Part A and B expenditures and the ACO’s historical expenditures. It would update the rebased benchmark on an annual basis to account for regional spending, rather than purely basing updates on projected growth. Furthermore, the proposal would adjust an ACO’s historical benchmark for changes in participant composition, accounting for differences in the ACO’s assigned population determined based on its prior and current participant composition. To assist stakeholders in modeling the rebasing methodology, CMS has made three historical years’ data for average per capita county-level fee-for-service spending and risk scores and ACO-specific data on the total number of assigned beneficiaries residing in each county where at least 1 percent of the ACO’s assigned beneficiaries reside available on its website.

Assumption of risk. Currently, Track 1 ACOs may choose to renew Track 1 participation for one additional three-year period, or may switch to Tracks 2 or 3. To encourage providers to take on more risk, the Proposed rule would allow Track 1 ACOs wishing to enter Tracks 2 or 3 to extend Track 1 participation for a fourth year, deferring benchmark rebasing, before entering Track 2 or 3.

Reopening determinations. The Proposed rule would also define timeframes and other criteria under which CMS may reopen a determination of ACO shared savings or shared losses to correct financial reconciliation calculations. Specifically, it would limit re-opening determinations of shared savings or losses to no more than four years after the date of the notification to the ACO of the initial determination of shared savings or shared losses for the performance year for good cause, while reserving the right to reopen a payment determination, at any time in the case of fraud or similar fault.

MainStory: TopStory NewsFeed AccountableCareNews AgencyNews MedicarePartANews MedicarePartBNews ProviderPaymentNews

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