On Thursday, January 28, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule aimed at improving the Medicare Shared Savings Program. The rule would strengthen the long-term incentives for Accountable Care Organizations (ACOs) to continue improving the care they provide to Medicare beneficiaries.
“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.”
According to the CMS Fact Sheet, the Medicare Shared Savings Program currently includes 434 ACOs serving more than 7.7 million Medicare beneficiaries nationally. The proposed rule will update the methodology used to measure the performance of ACOs that continue their participation in the Medicare Shared Savings Program after an initial three-year agreement period. It also contains proposals for further simplifying how CMS makes adjustments to ACO benchmarks when participant composition changes, for supporting ACOs in making the shift to performance-based risk, and further defines the administration of some financial regulations.
Here’s a breakdown of the proposed changes:
Establishing, Adjusting, and Updating ACO Rebased Historical Benchmarks
Adjusting Benchmarks for Changes in ACO Participant Composition
The rule would streamline how the ACO’s historical benchmark is adjusted when its composition changes. Currently, a change to the ACO’s composition requires a recalculation using the ACO’s three-year average per capita historical benchmark. The new proposal calls for the adjustment to be made using an expenditure ratio calculated for a single year that accounts for differences in the ACO’s assigned population.
Facilitating the Transition to Performance-Based Risk
CMS believes the long-term success of the Shared Savings Program rests on successfully transitioning it to a two-sided performance-based risk program. To strengthen these efforts, CMS wants to provide an additional participation option that allows ACOs to apply for a renewed agreement under their existing first agreement. In other words, the eligible ACO would enter its fourth year under Track One, while deferring for one year its entrance into the performance-based risk track.
Administrative Finality of Financial Reconciliation Calculations
The proposal would limit re-openings of a determination of ACO shared savings or shared loss for good cause to not more than four years from the date the ACO was notified. In the case of fraud or similar fault, CMS will have the right to reopen a payment determination at any time.