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Healthcare Stakeholders Comment on ACO Benchmarking Rule

March 29, 2016
by Rajiv Leventhal
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Several organizations have submitted joint comments to the Centers for Medicare & Medicaid Services (CMS) in response to the agency’s proposed rule it released earlier this year to modify the benchmark rebasing methodology for accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP).

The joint comments represent the collective views of organizations representing physicians, hospitals, medical group practices, academic medical centers and nearly all existing MSSP ACOs, according to a statement released by the Charlotte, N.C.-based Premier, Inc.

In its late January announcement regarding the modifications, CMS said it was looking to leverage the new proposed rule in order to modify the process for resetting the MSSP program’s benchmarks, which are used to measure ACO performance. Among the key elements in the changes that the agency was proposing:

  • Recognizing that health cost trends vary in communities across the country by using regional, rather than national, spending growth trends when establishing and updating an ACO’s rebased benchmark
  • Adjusting an ACO’s rebased benchmark when it enters a second or subsequent agreement period by a percentage (increased over time) of the difference between fee-for-service (FFS)
  • Spending in the ACO’s regional service area and the ACO’s historical spending, which will provide a greater incentive for continued ACO participation and improvement
  • Giving ACOs time to prepare for benchmarks that incorporate regional expenditures by using a phased-in approach to implementation

In the recent comments from 22 healthcare stakeholders to CMS Acting Administrator Andy Slavitt, signers expressed strong support for CMS’ proposal to incorporate regional cost data into benchmarks, arguing that the current method of basing benchmarks solely on ACO-specific historical spending penalizes ACOs for performing well in the past, and forces them to chase increasingly more challenging benchmarks in subsequent agreement periods. By blending historical and regional cost data, commenters note that CMS will improve the long-term viability of the program by attracting new providers, while also improving the odds of retaining current participants.

However, commenters also noted that there remains a critical need to make additional changes to ensure the future of the program. In particular, commenters recommend that CMS:

  • Finalize, with modification, blending ACO historical and regional cost data into ACO benchmarks;
  • Provide ACOs with maximum flexibility and choices related to transitioning to benchmarks that comprise a component of regional cost data;
  • Focus on comparing ACO performance relative to FFS Medicare by excluding ACO-assigned beneficiaries (for all ACOs in the region) from the regional beneficiary population;
  • Honor the current policy that accounts for savings in rebased benchmarks, rather than punish ACOs that worked hard to earn savings in previous agreements; and
  • Modify and enhance the proposal to reopen ACO determinations to include greater opportunities for ACOs, especially when CMS errors are the cause, and shorten the timeframe from four to two years

“Our recommendations 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,” wrote the comment letter signers. “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.”

Separately, although not addressed in the proposed rule, the commenters also state in their letter that as CMS heads into rulemaking for the Medicare Access and CHIP Reauthorization Act (MACRA), the agency should designate all MSSP ACOs as qualifying alternative payment models (APMs) under MACRA. This would allow physicians participating in all MSSP ACOs to qualify for MACRA APM incentive payments, provided they meet the threshold levels of revenue or patient participation required by the law.

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