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CMS' final rule on ACO benchmarks receives mixed reactions

On June 6, CMS released a final rule intended to improve the way Medicare pays accountable care organizations (ACOs) in its Medicare Shared Savings Program (MSSP).

Andy Slavitt, CMS acting Administrator, said in a statement the final rule will encourage more physicians to join ACOs and will also refine how the MSSP measures success, so that current participants are better rewarded for quality.

Highlights of the final rule

Here are the major takeaways:

  1. Regional benchmarks will replace national benchmarks. Cost benchmarks will now be based on regional spending data, as opposed to national spending data, when an ACO signs up for a second or subsequent contract period. ACO efficiency will be measured against other regional providers instead of against past performance.
  2. Track 1 ACOs will have the option of renewing under a two-sided model. If the application for renewal is approved, the ACO can defer exposure to downside risk for one year before transitioning to Track 2 or Track 3.
  3. Timeframes have been established for appealing calculations for shared savings or losses. ACOs will have four years to file an appeal.
  4. The new methodology will be implemented in phases. It will begin with ACOs entering contract periods on or after January 1, 2017.

Comments from the field

Blair Childs, Senior Vice president of Public Affairs for Premier, said in a statement he commends CMS for finalizing policies that will regionally adjust ACO benchmarks and minimize disruption. “Furthermore, we appreciate that CMS did not finalize its proposal to remove shared savings payments from ACO spending in calculating the rebased benchmarks, which would have unfairly penalized ACOs for performing well in the past,” Childs said.

Clif Gaus, president and CEO of the National Association of ACOs (NAACOS) told Bloomberg BNA the organization supports some aspects of the rule (e.g., applying different regional weights for certain ACOs). However, the NAACOS was disappointed CMS ignored a recommendation to exclude ACO beneficiaries when determining regional rates. “That means, under the rule, ACOs will be compared against one another and not solely against other Medicare fee-for-service providers in a particular area,” Gaus said in an e-mail.

Gaus also said “comparing ACOs to one another for benchmarking is against the original intent of the program, which was to compare ACO performance against fee-for-service providers.”

According to Modern Healthcare, ACOs that entered the program in 2012 or 2013 will not be able to take advantage of the new benchmarking regulations until 2019. Several provider organizations had urged CMS to allow those ACOs to take advantage of the new benchmarking methodology sooner.

“More than any other cohort, these early adopters deserve this option, and we see no significant rationale for their exclusion,” Trinity Health, a Michigan-based health system, said in a letter to CMS earlier this year. “These ACOs should not be penalized simply because of unfortunate timing.”

Childs was also disappointed the regulations for early adopters would not be applied until 2019. “These participants should be able to qualify for these positive changes, and should not be penalized by having to wait three years until their benchmarks gain parity with all other program participants,” he said. “This decision puts the inaugural class of ACOs at a distinct disadvantage to those that applied later.”

Filed Under: Payer
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