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CMS changes benchmark rules for Shared Savings ACOs, will account for regional differences

New guidelines improves long-term incentives for ACOs that continue their participation after an initial three-year period.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services on Thursday said it will begin taking regional differences into account when measuring the performance of accountable care organizations in the Medicare Shared Savings program, one of several changes announced to the benchmark guidelines in the program.

The new rules recognize 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, CMS said.

The proposal builds on the momentum of growth in the Shared Savings Program and improves long-term incentives for ACOs that continue their participation after an initial three-year period, CMS said.

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[Also: See where the Pioneer, Next Generation ACOs are (Map)]

Proposed changes to be applied in resetting an ACO's benchmark for a second or subsequent agreement period, beginning on or after January 1, 2017 include replacing the national trend factor with regional trend factors for establishing the ACO's rebased historical benchmark; and making an adjustment to reflect a percentage of the difference between the regional fee-for-service expenditures and the ACO's historical expenditures.

Other changes 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 to 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.

The proposals are the product of extensive stakeholder input, CMS said. CMS sought comment on the methodology used to reset ACO benchmarks in a proposed rule released in December 2014. In June 2015, CMS indicated that it would pursue future rulemaking on this issue.

[Also: Dartmouth-Hitchcock defers joining Next Generation ACO program over financial targets]

"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," said Andy Slavitt, acting administrator for CMS. "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."

Comments  on the proposed rule may be submitted by March 28.

Twitter: @SusanJMorse