CMS Proposes Changes to Methodology for Determining ACO Benchmarks

The Centers for Medicare & Medicaid Services (CMS) has proposed rule changes to the method it uses to calculate the performance of Accountable Care Organizations (ACOs) continuing to participate in the Medicare Shared Savings Program past the initial three-year agreement.

Currently CMS measures performance by evaluating expenditures against a benchmark of historical costs. Itwants to move toward evaluating trends in regional fee-for-service costs and rely less on assessing benchmarks on those historical expenditures for the second and subsequent agreement periods.

Additional proposed changes are:

• Adding a participation option to facilitate an ACO’s transition to performance-based risk arrangements by allowing eligible ACOs to elect a fourth year under their existing first agreement and defer by one year entering a second agreement period under a performance-based risk track.

• Streamlining the methodology for adjusting an ACO’s benchmark when its composition changes.

• Clarifying the timeline and other criteria for reopening determinations of ACO shared savings and shared losses for good cause or fraud or similar fault.

“Medicare payments are an important catalyst to improving care delivery, spending our resources smarter and keeping people healthy,” said Andy Slavitt, acting administrator for CMS. “This proposal allows ACOs in all parts of the country to be successful by recognizing both their achievements and improvements in how they provide care. This should have the effect of growing the number of ACOs, and making ACOs and the coordinated care they provide to patients, more of a standard in all parts of the country.”

A fact sheet with more information about the proposed rule is available at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-01-28-2.html. The proposed rule will be open to a 60-day comment period.