CMS Finalizes ACO Cost Target Changes
- By BSTQ Staff
In June, the Centers for Medicare and Medicaid Services (CMS) finalized changes to how it evaluates whether Medicare accountable care organizations (ACOs) are saving money. The changes came in response to complaints that the program was harder for efficient providers because they had to compete against their own success. To combat this, one change adjusts cost benchmarks based on regional rather than national spending data when an ACO signs up for a second or subsequent three-year contract period.
Another change encourages ACOs to switch to more aggressive tracks. Currently, 434 ACOs are in tracks that allow them to earn bonuses for meeting cost and quality targets without risking penalties if they fall short. Under this change, ACOs are allowed to extend their initial agreement for one year before taking on financial risk. In addition, ACOs now have up to four years to challenge the initial determination of shared savings or shared losses.
“Today’s changes will encourage more physicians to improve patient care by joining ACOs, while also refining how the program measures success so that current participants are better rewarded for quality,” said CMS acting Administrator Andy Slavitt.
CMS will phase in the changes for ACOs entering contract periods beginning on or after Jan. 1, 2017. However, ACOs that entered the program in 2012 or 2013 won’t be able to take advantage of the new benchmarking change until they enter a new agreement in 2019.
