CMS Proposes Changes for ACOs in Medicare Shared Savings Program

A new proposal for the CMS Medicare Shared Savings Program (MSSP) would change the way CMS evaluates performance of accountable care organizations (ACOs) participating in the program.

The proposal would modify the process for resetting benchmarks used to determine performance for ACOs who are renewing their participation agreement. CMS would incorporate regional fee-for-service expenditures and move away from using historical spending as a benchmark.

"Medicare payments are an important catalyst to improving care delivery, spending our resources smarter and keeping people healthy," Andy Slavitt, acting administrator for CMS, said in a statement. "This proposal allows ACOs in all parts of the country to be successful by recognizing both their achievements and improvements in how they provide care. This should have the effect of growing the number of ACOs, and making ACOs and the coordinated care they provide to patients, more of a standard in all parts of the country."

The proposal would take into account the fact that health cost trends vary across the country and regional growth trends better represent that fact. In addition, the change to adjust the ACO’s benchmark as it renews its agreement by a percentage of the difference between fee-for-service spending the region and historical spending of the ACO would provide greater incentive for ACOs to continue participating in the program and improving their performance.

CMS is also looking to better facilitate transition in the MSSP to a 2-sided performance-based risk program where ACOs share in both savings and losses. Currently an ACO enters a 3-year agreement and those that participate in the 1-sided model may apply to continue in that track for a second agreement or to the 2-sided model.

However, the new proposal would allow ACOs in the 1-sided model to renew under the 2-sided model and if they are approved, the ACO would get an additional year under the 1-sided model before transitioning to the 2-sided model for a 3-year agreement period.

“In order for the Shared Savings Program to be effective and sustainable over the long term, we believe we need to further strengthen our efforts to transition the Shared Savings Program to a two-sided performance-based risk program in which ACOs share in both savings and losses,” CMS wrote.

The proposal rule is open to a 60-day comment period and can be viewed in full here.