CMS: Regional spending is a better benchmark for ACOs

CMS Acting Administrator Andy Slavitt says the plan should entice broader participation.
CMS Acting Administrator Andy Slavitt says the plan should entice broader participation.

The government hopes to encourage accountable care organizations to extend their participation in performance-based risk arrangements by offering a new way to include payments based on regional spending fee-for-service costs. The comment period on the proposal ends March 28.

The Centers for Medicare & Medicaid Services has traditionally used broader, nationwide historical spending data to determine its so-called benchmarks to measure ACO performance during the participation renewal process. 

ACOs have sprouted under health reform due to the passage of the Affordable Care Act and the way they coordinate care. More specifically, the proposed methodology would incorporate factors based on regional fee-for-service expenditures, into establishing and updating an ACO's rebased historical benchmark, including an adjustment to the benchmark based on regional spending that is phased-in over several agreement periods.

The agency acknowledged the plan would better reflect sometimes widely varying regional costs when gauging an ACO's performance. The plan would essentially adjust an ACO's rebased benchmark 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.

Other changes being considered include tweaking benchmarks when an ACO's composition shifts and offering greater flexibility in participation commitment periods.

CMS Acting Administrator Andy Slavitt says the plan should entice broader participation. The agency says the Medicare Shared Savings Program now includes 434 ACOs serving more than 7.7 million Medicare beneficiaries nationally.