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Final Rule Allows ACOs to Use Regional Benchmarks

CMS issued a final rule last week that will allow accountable care organizations (ACOs) to benchmark their results to regional Medicare spending, using a phased approach to incorporating regional fee-for-service (FFS) expenditures into calculations for resetting, adjusting, and updating an ACO’s rebased historical benchmark after an initial three-year agreement period.


National benchmarks will continue to be used in an ACO’s first three-year term. Benchmark changes to the second or subsequent agreement period will include phasing in the transition to a higher weight in calculating the regional adjustment.


CMS defined an ACO’s regional service area as any county where one or more assigned beneficiaries reside. CMS will use county-level data to determine regional FFS expenditures for the assignable beneficiary population in the ACO’s regional service area.


The changes mean an ACO’s rebased historical benchmark will be determined by comparing the ACO’s performance with that of other providers in the same regional market instead of simply evaluating the ACO against its own past performance.

The rebased historical benchmark will not apply until the third agreement period—beginning in 2019—for ACOs that started in 2012 and 2013.


“As a result of these changes, the methodology for determining the ACO’s rebased historical benchmark will reflect an ACO’s performance in relation to other providers in the same regional market, rather than just evaluating the ACO against its own past performance,” CMS said in a fact sheet.


The final rule is viewed as an improvement over how Medicare pays ACOs in the Medicare Shared Savings Program (MSSP). It is moving away from paying for each service a physician provides towards a system that rewards physicians for coordinating with each other.


Changes from the proposed rule also included revising the benchmarking methodology for national fee-for-service (FFS) calculations to use “assignable” Medicare FFS beneficiaries instead of all FFS beneficiaries.


Sources: “ACO Final Rule Will Strengthen Incentives to Participate, CMS Says,” AHLA Weekly, June 10, 2016; “CMS Moves From National to Regional ACO Benchmarking,” AHLA Weekly, June 10, 2016; Medicare Makes Enhancements to the Shared Savings Program to Strengthen Incentives for Quality Care, CMS Press Release, June 6, 2016.


To read the CMS fact sheet, click here.




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