Medicare Shared Savings Program proposed changes reflect regional performance

Accountable care organizations participating in the Medicare Shared Savings Program would share savings and losses based on how they are performing on a regional level under a new proposal.

The Centers for Medicare and Medicaid services issued the proposed rule Jan. 28. The rule makes several changes to the program that are “focused on incorporating regional fee-for-service expenditures into the methodology for establishing, adjusting, and updating an ACO’s historical benchmark for its second or subsequent agreement period,” the agency said in a fact sheet.

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The agency is hoping these changes will provide a greater incentive for continued ACO participation and improvement.

The rule comes after CMS found that while the 20 Pioneer ACOs and another 333 ACOs generated savings in 2014, only 97 qualified for shared savings bonus payments.

In calculating the new and updated benchmarks, CMS proposes to use regional spending growth trends rather than national ones. Benchmarks will be adjusted in the second or subsequent agreement period based on a percentage difference between fee-for-service spending in an ACO’s regional service area and the ACO’s historical spending.

The agency plans to apply the changes in resetting an ACO’s benchmark for a second or subsequent agreement period beginning on or after Jan. 1, 2017.

Other aspects of the proposed rule include benchmark adjustments to account for changes in the ACO’s patient mix, the release of new data files to help ACOs and other stakeholders to build their own models based on the new benchmark methodology, facilitating the transition to a two-sided performance program that allows ACOs to share in both the savings and losses, and more clearly defining the time-line when challenges can be made to the calculation of a shared savings or loss.

Comments on the proposed rule are due March 28.

gtwachtman@frontlinemedcom.com