Allow ACOs to Use Pre-Pandemic Years for 2022 Benchmarks, Groups Urge

October 20, 2021 - A group of healthcare organizations, led by the National Association of ACOs (NAACOS), has asked CMS to provide accountable care organizations (ACOs) with the option to use pre-pandemic years to set Medicare Shared Savings Program (MSSP) benchmarks.

Under current CMS policy, ACOs that renew MSSP agreements and new ACOs that enter the MSSP in 2022 will receive benchmarks that are based on spending targets from 2019 to 2021.

The COVID-19 pandemic caused healthcare use to fluctuate, which led to a variation of spending between 2019 and 2020. Using spending targets from 2020 to set benchmarks for 2022 would be unfair to ACOs, the groups—which include the American Medical Association and the American Hospital Association—expressed in their letter.

“Some parts of the country were devastated in 2020 yet have now resumed more in-office preventive visits and elective procedures,” the letter stated. “For other areas, it was the opposite with 2020 providing little change in utilization from previous years, and doctors and hospitals now being hit hard by the pandemic this year.”

Even though ACOs saw overall success in 2020, some ACOs showed losses due to CMS benchmarking policies. CMS uses a blended national-regional adjustment to establish final benchmarks, and Medicare spending decreased nationally by around 7 percent in 2020, the groups wrote. This hurt the ACOs that did not experience a reduction during the pandemic and saw similar activity as they did in 2019.

The groups also criticized the regional adjustments under the CMS benchmarking policies, which they stated do not accurately reflect regional variations in spending. Known as the rural glitch, the policy hurts ACOs that have lower spending than their region.

NAACOS and the other organizations urged CMS to fix this issue by removing ACO-assigned beneficiaries from the regional reference population.

A handful of ACOs experienced differences in their patient populations and performance year spending during 2020. Patient attribution in ACOs is based heavily on primary care services, and with many patients forgoing or delaying care during the pandemic, some ACOs have experienced changes out of their control.

ACOs that saw negative impacts from the pandemic are now deciding if they should enter new five-year agreement periods, which means if CMS does not provide a pre-pandemic option for setting benchmarks, ACOs could be dealing with the repercussions for a while.

“If this administration is serious about getting all patients into a clinical relationship with providers accountable for their outcomes, they need to create a fair, level playing field for how ACOs are held accountable,” Clif Gaus, president and chief executive officer of NAACOS, said in the press release.

In their letter, the organizations cited an analysis from the Institute for Accountable Care that revealed that 45 percent of ACOs that plan to renew an MSSP agreement in 2022 will be harmed if the current policy is not changed. More than 10 percent of the ACOs will see their benchmarks increase by more than three percent.

Unfair benchmarks may also dissuade ACOs from renewing their MSSP agreement in concern of not being able to successfully earn shared savings. This could lead to a decline in MSSP participation, the letter indicated.

The groups recalled that CMS has modified other Medicare payment systems and value-based payment programs in order to let them use years outside of the pandemic to set future benchmarks, and the agency should do the same for ACOs.

For example, the prospective payment systems for inpatient hospitals, skilled nursing facilities, and long-term care hospitals can use claims data from fiscal year 2019 instead of 2020 to set rates for FY 2022, under revised CMS policies. Additionally, the CMS Innovation Center Global and Professional Direct Contracting Model uses data from 2017 to 2019 for financial benchmarks.

“The variety of payment systems and value-based purchasing programs that have been modified to avoid 2020 data illustrates that CMS is concerned about 2020 data being skewed by the pandemic,” the groups wrote in the letter. “By allowing an option to use earlier years to set MSSP benchmarks for certain ACOs, CMS will avoid the anomalies in utilization resulting from the COVID-19 pandemic.”