Policy & Regulation News

Industry Leaders Support Proposed Changes to ACO Benchmarking

AHA, AMA, and others lauded a companion bill that would alter ACO benchmarking in the MSSP to ensure rural ACOs have an equal chance at earning shared savings.

ACO benchmarking and rural ACOs

Source: Thinkstock

By Jacqueline LaPointe

- Fourteen healthcare industry groups, including the American Hospital Association (AHA) and the American Medical Association (AMA), recently backed the campion to Senate legislation that would alter accountable care organization (ACO) benchmarking in Medicare’s largest ACO program.

The Accountable Care in Rural America Act (H.R. 5212) would change title XVII of the Social Security Act to ensure all ACOs in the Medicare Shared Savings Program (MSSP) have an equal opportunity to earn shared savings regardless of where the organizations are located.

“This legislation fixes an important flaw in the current MSSP benchmarking methodology – a flaw that systematically disadvantages ACOs in rural areas and makes it harder for them to achieve savings even when they improve quality and reduce costs on par with their counterparts in urban areas,” the groups wrote in a letter of support for the bill.

The letter was addressed to Representatives Jodey Arrington (R-TX), Suzan DelBene (D-WA), Roger Marshall (R-Ks), and Ami Bera, (D-CA), who introduced the bill on Nov. 21. The bill is a companion to Senate legislation introduced last month.

The bill would fix a “rural glitch” that forces all ACOs to be assessed based on their own performance, which makes it harder for ACOs to earn shared savings, Representatives Arrington and DelBene explained in a joint statement. This problem disproportionately impacts rural ACOs that face little competition in their region and provide care for a large number of Medicare beneficiaries.

“Fixing the rural glitch is a practical and meaningful change that will make the program fairer, especially for rural providers who can be disproportionately impacted by the current benchmark methodology,” Representative DelBene said in the statement. “This change will also make it fairer for providers who are already delivering efficient care like those in Washington state. I believe fixing the rural glitch will encourage more providers to participate in the ACO program which will be a benefit to seniors and taxpayers alike.”

The fourteen industry groups agreed that improving ACO benchmarking methodologies in the MSSP would “level the playing field for rural ACOs.”

“Today, the regional adjustment includes an ACO’s own beneficiaries in the regional calculation. While this has minimal impact for ACOs in urban areas with a lot of provider competition, the impact is significant in rural areas where an ACO covers a large number of the region’s fee-for-service beneficiaries,” they explained in the letter. “No ACO should be placed in a less favorable financial position due to their geography alone, and design flaws that discourage ACOs from operating in rural areas should be eliminated.”

The same groups supported the Senate legislation last month. The groups plus the American Academy of Family Physicians (AAFP) backed the bill in a letter of support to Senators Catherine Cortez Masto (D-NV) and Pat Roberts (R-KS).

Rural ACOs have faced unique challenges earning shared savings under the MSSP. Currently, the MSSP compares per-patient costs of an ACO in a specific region to the expenses of other regional providers. Since rural ACOs are one of the few coordinated care networks in their region, their spending benchmarks tend to be lower compared to urban or suburban ACOs that are up against several significant competitors.

Lower spending benchmarks can make it harder to save enough money to earn shared savings, and actually succeeding could mean an even lower benchmark in future performance periods.

“CMS’s current policy undermines efforts to further alternative payment models in rural America,” explained Clif Gaus, ScD, president and CEO of the National Association of ACOs, which backed both the Senate and House bills.

The bills would address the challenges of rural ACOs by removing an ACO’s assigned patients when determining the costs of patients in the ACO’s region. The new ACO benchmarking methodology would “more accurately compared an ACO’s spending to its surrounding area,” NAACOs stated.