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MSSP ACOs Need Better Cost Data, Benchmarking for Success

Nearly two dozen professional societies are urging drastic changes to help accountable care organizations participating in the Medicare Shared Savings Program.

By Jennifer Bresnick

- Medicare Shared Savings Program (MSSP) accountable care organizations will not be able to succeed long term without access to more detailed, localized, and targeted data sets and refined benchmarking frameworks, state a coalition of professional organizations in commentary directed at CMS.

MSSP accountable care organizations

The comments, issued in response to proposed changes to the ACO program, stress the importance of integrating regional cost data into more flexible performance benchmarking strategies in order to stem the tide of disappointed participants exiting the value-based reimbursement initiative.

Despite the fact that the MSSP has helped reduce Medicare spending and produced financial bonuses for many ACOs, CMS has faced significant criticism over the structure of its flagship accountable care project.

Stakeholders have complained that the benchmarking systems effectively penalize high-performing providers, since bonus opportunities are based on demonstrating continuous improvement rather than just maintaining optimal performance on quality measures. 

ACOs that enter the program at the top end of the scale – or achieve improvements quickly during their tenure – have nowhere left to go, making it difficult to accrue financial rewards.

READ MORE: MA Medicaid Embraces Accountable Care, Population Health Models

In addition, benchmarks are set using broad quality and performance data collected on a national level, which may be detrimental to providers in regions that vary significantly from the average.

CMS is attempting to rectify some of these shortfalls by revamping its benchmarking methodology to change historical benchmarking procedures and include more localized data in its calculations, but the efforts have come too late for many early adopters.

More than thirty percent of ACOs that joined the MSSP in 2012 and 2013 have already left the program, said the twenty-two organizations that signed the letter, including MGMA, the AMA, the National Association of ACOs, and the Premier Healthcare Alliance. 

Coupled with several high-profile exists from the more advanced Pioneer ACO program, it becomes clear that CMS has to make more drastic changes to their initiatives in order to cut Medicare spending, encourage providers to accept more financial risk, and improve care quality, the letter says.

Currently, the vast majority of MSSP ACOs only accept upside financial risk, which means they can receive bonuses for performing above expectations, but are not responsible to pay penalties for failing to make the mark.  While this is the first step in the transition to accountable care, CMS is hoping to push participants further into downside risk arrangements. 

READ MORE: ACOs Focus on Health IT, Population Health Management Plans

But they cannot do so without more detailed data about their assigned beneficiaries, better benchmarks that hold them to reasonable and well-defined goals, and a participation structure that takes into account the individualized needs of accountable care organizations in all their variety.

In order to further the development of the value-based reimbursement ecosystem, the professional organizations have made a series of recommendations that “reflect our unified expectation and desire to see the MSSP achieve the long-term sustainability necessary to enhance care coordination for Medicare beneficiaries, lower the growth rate of healthcare spending and improve quality in the Medicare program,” the letter says.

“Given our analyses show ACOs on average spend three percent less than comparable fee-for-service expenditures, it should remain a priority of the Secretary to refine the model in ways that will promote further program growth.”

The suggestions include the following:

• Refine the use of regional cost data by blending historical and regional data into new ACO benchmarks

READ MORE: CMS Seeks Providers for Socioeconomic Population Health Program

• Change the definition of an ACO’s regional service area to include counties in which at least one percent of the ACO’s assigned beneficiaries reside

• Rethink the calculations for costs of caring for end stage renal disease patients and release more accurate state-level spending data for this population

• Replace the national trend factor with a regional trend factor for ACOs entering their second or third contracting period

• Disseminate data that will allow stakeholders to model the impact of adjusting benchmarking rules to account for ACO Participant Taxpayer Identification Number (TIN) changes

• Allow accountable care organizations to move into higher tiers of financial risk based on the calendar year instead of the end date for their individual agreements

• Develop an improved methodology for ACOs to request redeterminations and shorten the current timeframe from four years to two years

“In general, we support the proposal to incorporate a component of regional cost data into ACO benchmarks,” the letter says. “If executed correctly, such changes will attract new ACOs while retaining existing participants and ultimately improving the long-term viability of the program.”

However, the organizations “emphasize the critical need for the agency to further modify the program to address other critical issues such as quality measurement, risk adjustment and unstable assignment to ensure a successful future for this program.”

To read the full comment letter, please click here.

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