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CMS to Update to MSSP Accountable Care Organization Benchmarks

A new proposed rule may help Medicare Shared Savings Program accountable care organizations have an easier time of collecting more shared savings.

By Jennifer Bresnick

- CMS is continuing to make much-needed tweaks to its healthcare reform programs, using a new proposed rule to tackle benchmarking issues with its Medicare Shared Savings Program (MSSP) accountable care organization framework.

MSSP accountable care organizations

While the number of MSSP ACOs has grown steadily over the first few years of the value-based reimbursement program, concerns over the requirements to show continued quality improvement has made experts question the long-term viability of one of CMS’ flagship initiatives.

More than three hundred MSSP organizations and 20 Pioneer ACO participants have saved $411 million for Medicare, according to the latest program data, but many of the provider groups are struggling to earn shared savings dollars that would make the effort worthwhile for them individually.

The problem is that the benchmarking system does not effectively reward providers who enter the program with high marks for quality and lean spending habits, explains April Wortham Collins, Senior Analyst at Decision Resources Group.

“The benchmarks are set at a very high level,” she said to “CMS looks at all of the beneficiary expenditures for the patient population that is assigned to that particular ACO for Part A and Part B Medicare services over the last three-years. So, for those patients that you are responsible for caring for, they look at how much they've cost Medicare in the last three-years. For year 1 of the ACO agreement, that’s your benchmark.”

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“If your ACO successfully implements some basic population health management techniques, chances are you’ll be able to generate some savings, and maybe even share in them,” she said.  “However, for each year of the ACO agreement, that benchmark gets adjusted.  The bar gets raised, and it becomes harder to meet the threshold because you’ve already taken care of a lot of the low-hanging fruit.”

“It becomes more difficult in year two, because you have be increasingly innovative with care management and coordination in order to trim even more fat than you did in year one.   It’s even harder for ACOs that started off doing very well.”

That means that top-performing ACOs feel as if they’re being “punished” for achieving significant results early on, Wortham Collins said, and may have trouble accruing shared savings payments proportionate to their quality of care

CMS has acknowledged that the MSSP framework is in need of a facelift.  The changes proposed this week will adjust the way historical benchmarks are established for accountable care organizations entering their second or third three-year-long contracts.  Regional fee-for-service (FFS) expenditures will now be incorporated into the benchmarking methodology.

"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."

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The proposed rule will also streamline the methodology used to set benchmarks for patient composition changes, as well as encourage participation in more challenging performance-based risk arrangements.

In an accompanying fact sheet, CMS details the major components of the proposal:

• Replace the national trend factor with regional trend factors for establishing the ACO’s rebased historical benchmark, and remove the adjustment to explicitly account for savings generated under the ACO’s prior agreement period.  

• Make an adjustment when establishing the ACO’s rebased historical benchmark, to reflect a percentage of the difference between the regional FFS expenditures in the ACO’s regional service area and the ACO’s historical expenditures. A higher percentage will be used in calculating this adjustment to the ACO’s rebased historical benchmark for the ACO’s third agreement period and all subsequent agreement periods.

• Annually, update the rebased benchmark to account for changes in regional FFS spending, replacing the current update, which is based solely on the absolute amount of projected growth in national FFS spending.

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CMS will define an ACO’s regional service area “to include any county where one or more assigned beneficiary resides and to weight county-level FFS costs by the proportion of the ACO’s assigned beneficiaries in the county,” the agency explains.

“We are also proposing a program-wide change, to use all beneficiaries eligible for ACO assignment instead of all FFS beneficiaries as the basis for program calculations using regional and national FFS expenditures.”

Big data analytics will also play a more central role in the benchmarking process.  CMS has made new data files available to MSSP participants that may help organizations model the impact of the proposed changes.  The data includes average per capita county-level FFS spending, risk scores for three historical years, and ACO-specific information on patient populations and demographics.

CMS will also make it easier for accountable care organizations to slowly shift towards accepting more down-side risk by allowing Track One ACOs – those who can collect bonuses for high performance but do not owe penalties for missing the mark – to renew their contracts with more options attached. 

Track One ACOs will be allowed to apply for a second MSSP agreement period under a two-sided risk model, but will allowed to add an additional year of Track One participation to the contract, allowing a more gradual entrance into the risk-based reimbursement arena.

While the MSSP initiative has had little trouble attracting new participants, these proposed changes may help more providers see greater financial success for their efforts.  As CMS shepherds the industry towards value-based reimbursement, hoping to hit its 2018 goals for accountable care, it will no doubt continue to make necessary adjustments to help the maximum number of providers achieve quality improvements and reimbursement benefits under its new models.


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