Rule Would Ensure ACO Program Remains Attractive, Consultant Says

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By Michael D. Williamson

Jan. 29 — A proposal to change how accountable care organization performance is measured would ensure that Medicare's program for ACOs remains attractive for participating providers, according to a health-care consultant.

The rule from the Centers for Medicare & Medicaid Services, however, won't benefit those providers until 2019 at the earliest, Josh Seidman, senior vice president at Avalere Health, a Washington-based consulting firm, said Jan. 29.

Certain ACOs may call for the CMS to move up implementation of the rule to 2017, Seidman told Bloomberg BNA.

Released Jan. 28, the proposed rule would update how ACO performance is measured. It would modify the process for resetting the benchmarks used to determine performance for Medicare Shared Savings Program (MSSP) ACOs renewing their participation agreements.

The ACOs are groups of providers that share in rewards by lowering growth in Medicare Parts A and B fee-for-service costs while, at the same time, meeting performance standards on quality of care. Created by the Affordable Care Act, the MSSP, unlike other ACO models, is open to all providers. Under the MSSP, 434 ACOs serve more than 7.7 million Medicare beneficiaries nationally.

Members of Premier Inc., a group purchasing organization, believe the CMS's ACO benchmarking proposal is “a step in the right direction,” Blair Childs, the company's senior vice president of public affairs, said in a Jan. 28 statement.

Changes Made for Successful Providers

“I think CMS clearly has done a number of things to allay concerns that ACOs had about the benchmarking methodology,” Seidman said. He added that under the current benchmarking methodology, some highly efficient shared savings ACOs believed they were being penalized for their own success.

In terms of explaining the current benchmarks, a Jan. 28 fact sheet from the CMS said performance in the MSSP “is currently measured using a multi-step process that evaluates an ACO's effectiveness in lowering expenditures for a group of assigned beneficiaries against a benchmark reflective of the ACO's historical costs.” Through the proposed changes to the methodology for determining the ACO's rebased historical benchmark, the CMS said it's “seeking to reflect an ACO's performance against providers in the same market, rather than just evaluating the ACO against its own past performance.”

Among the proposal's changes would be an annual update of the rebased benchmark to account for changes in regional fee-for-service (FFS) spending, “replacing the current update, which is based solely on the absolute amount of projected growth in national FFS spending.” The agency said it believes 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.”

“If you were a historically efficient provider, you had lower costs for your benchmark” under the current performance methodology, Seidman told Bloomberg BNA. The move toward regional benchmarks is a way to address concerns that the current methodology penalizes successful ACOs, he explained.

Seidman also said the MSSP benchmarking rule is the CMS's way of trying to create a more predictable methodology for providers. In doing this, they're also trying to create a more sustainable ACO program, he told Bloomberg BNA.

Overall, however, Seidman is unsure about whether the proposal will make much of a difference to providers. He told Bloomberg BNA the proposal's changes are important, but they may not make a “huge difference” to providers.

Premier's Stance

Premier welcomed the benchmarking changes. Moving away from benchmarks based on historical spending in favor of a methodology that sets targets based on regional spending and trends is encouraging, Childs said. “As we know from members of our Population Health Management Collaborative, the current methodology can limit or eliminate shared savings payments for high-performing ACOs for no other reason than they happen to reside in an area with lower than average spending,” Childs said.

In the Premier statement, Childs also said the company “will continue to analyze the proposal and accompanying data and look forward to providing detailed comments to CMS on these efforts.”

The proposal (CMS-1644-P; RIN 0938-AS67) will be published Feb. 3 in the Federal Register. Comments are due March 28.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Nancy Simmons at

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