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Early ACOs Won’t Benefit from Benchmark Changes

Posted in Accountable Care Organizations, Affordable Care Act, Home Healthcare, Hospitals and Institutions, Legislation and Public Policy, Medicare and Medicaid, Reimbursement Matters

 In response to complaints that current Medicare Shared Savings Program (MSSP) regulations penalize efficient providers, the Centers for Medicare & Medicaid Services (CMS) published a final rule revising a variety of current MSSP regulations.

To address concerns that efficient accountable care organizations (ACOs) compete against their own success, CMS revised the benchmarking methodology to rebase and update ACO historical benchmarks by:

• Changing from a national to regional adjustment for the historical benchmark;
• Using updated ACO participant lists and data for the relevant performance year; and
• Adding a methodology for risk adjustment to account for the health status of the ACO’s assigned population.

The new rule also:
• Gives ACOs the option of extending their initial agreement for an additional year before taking on financial risk; and
• Establishes timeframes and criteria to appeal the calculation of an ACO’s bonus or penalty.

The rule will be effective August 9, 2016, but CMS will phase in the new benchmarking methodology for ACOs entering contract periods beginning on or after January 1, 2017. CMS declined a request to allow ACOs that entered the program in 2012 or 2013 to take advantage of the new benchmarking methodology, as CMS concluded it would be disruptive to change the performance methodology in the middle of a performance period. Therefore, the benchmarking changes won’t apply to these early MSSP ACOs until they enter a new agreement in either 2018 or 2019.

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