The Centers for Medicare & Medicaid Services has proposed a major change in how performance benchmarking is done for participants in its Medicare shared savings program.

According to a CMS news release announcing the newly proposed regulation that includes this change,

cmsKey proposals include:

  • Recognizing that health cost trends vary in communities across the country by using regional, rather than national, spending growth trends when establishing and updating an ACO’s rebased benchmark.
  • Adjusting an ACO’s rebased benchmark when it enters a second or subsequent agreement period by a percentage (increased over time) of the difference between fee-for-service
  • spending in the ACO’s regional service area and the ACO’s historical spending, which will provide a greater incentive for continued ACO participation and improvement.
  • Giving ACOs time to prepare for benchmarks that incorporate regional expenditures by using a phased-in approach to implementation.  

Other changes would include:

  • Adding a participation option to facilitate an ACO’s transition to performance-based risk arrangements by allowing eligible ACOs to elect a fourth year under their existing first agreement and defer by one year entering a second agreement period under a performance-based risk track.
  • Streamlining the methodology for adjusting an ACO’s benchmark when its composition changes.
  • Clarifying the timeline and other criteria for reopening determinations of ACO shared savings and shared losses for good cause or fraud or similar fault.

CMS hopes the changes will produce $120 million in federal savings between 2017 and 2019 and foster the creation of more ACOs to serve Medicare patients.

To learn more about what CMS is proposing to improve the Medicare shared savings program, see CMS’s news release announcing the proposal and CMS’s fact sheet describing the proposal in greater detail.