CMS proposes changes to Medicare Shared Savings Program: 10 things to know

In an effort to strengthen incentives for accountable care organizations, CMS has proposed a rule that includes a number of changes to the Medicare Shared Savings Program.

"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," said Andy Slavitt, acting administrator for CMS. "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."

Here are 10 things to know about CMS' proposal.

1. Under the proposed rule, CMS would modify the process for resetting the benchmarks that are used to determine ACO performance. The proposal calls for the use of regional, rather than national, spending growth trends when establishing and updating an ACO's rebased benchmark.

2. CMS proposed defining an ACO's regional service area to include any county where one or more assigned beneficiaries resides.

3. Under the proposed rule, all beneficiaries eligible for ACO assignment, rather than all fee-for-service beneficiaries, would be used as the basis for program calculations using regional and national fee-for-service expenditures.

4. The rule calls for an ACO's rebased benchmark to be adjusted when it enters a second or subsequent agreement period. Under the proposed rule, the benchmark would be adjusted by a percentage of the difference between fee-for-service spending in the ACO's regional service area and the ACO's historical spending. "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," said CMS.

5. The proposal calls for a phased-in approach to implementation to give ACOs time to prepare for benchmarks that incorporate regional expenditures.

6. Under the proposed rule, the rebased benchmark would be updated annually to account for changes in regional fee-for-service spending. That differs from the current update, which is based solely on the absolute amount of projected growth in national fee-for-service spending.

7. "Through these proposed changes to the methodology for determining the ACO's rebased historical benchmark, CMS is seeking to reflect an ACO's performance against providers in the same market, rather than just evaluating the ACO against its own past performance," said CMS. "We believe this proposal will improve the program's incentives for ACOs by recognizing an ACO's efficiency relative to its region and limiting the link between an ACO's performance and its future benchmarks."

8. Under the proposed rule, the methodology for adjusting an ACO's historical benchmark when its composition changes would be streamlined. An expenditure ratio calculated for a single year that accounts for differences in the ACO's assigned population would be used for adjusting the benchmark.

9. To further strengthen its efforts to transition the Medicare Shared Savings Program to a two-sided performance-based risk program, CMS proposed providing an additional option for ACOs participating under Track 1 to apply to renew for a second agreement period under a two-sided model.

10. There will be a 60-day comment period on the proposed rule that closes on March 28.

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