CMS targets reforms to benchmarks to kick-start flat ACO participation

The Biden administration wants to change how benchmark payments to accountable care organizations are calculated to make it easier for providers in the Medicare Shared Savings Program (MSSP) to qualify for savings.

Leaders in the Centers for Medicare & Medicaid Services (CMS) outlined several changes they are pursuing to get more providers involved in value-based care in an article in The New England Journal of Medicine Thursday. CMS officials said the agency is looking into how to better calculate ACO benchmarks to better adjust for savings and to improve equity. 

The goal of the reforms is to reverse a slide in participation in the Medicare Shared Savings Program—which oversees ACOs—and to target smaller providers that treat patients in underserved areas.

“Participation in the Shared Savings Program has plateaued, and savings for ACOs and Medicare have been limited, partly owing to the benchmark methodologies used to calculate eligibility for savings,” the article said. 

ACOs agree to meet certain spending and quality targets and get a share of any savings they generate but must repay Medicare for any losses. CMS calculates a benchmark rate for ACOs that represents the targets ACOs have to meet. 

However, a lingering problem for ACOs has been a process called rebasing, where a benchmark is recalculated in the next performance year based on the observed spending in the previous agreement period, CMS officials wrote. The problem is that an ACO that reduces spending now must meet a lower benchmark that can “undermine their chances of achieving savings going forward,” the article said. 

Another concern is that benchmark adjustments, which take into account regional spending, can make it harder for an ACO to care for sicker patient populations.

CMS also noted that “Black, Latinx, Asian American and Pacific Islander and American Native and Alaska Native beneficiaries have “had inequitable access to ACOs.”

The agency wants to improve the MSSP by syncing new ACO features to the program.

“The [Center for Medicare and Medicaid] Innovation Center will align testing of new ACO models and features with the Shared Savings Program and will hold certain aspects, such as financial parameters, constant,” the article said. “Other program requirements could be waived to evaluate the effects of these changes on participation in ACOs, savings and equity.”

CMS also wants to explore ways to get smaller ACOs and providers involved who may lack experience in financial risk. 

The agency may adopt lessons from the ACO Investment Model that can give providers upfront funding to participate in value-based care. 

One such potential reform mentioned was administrative benchmarks that would set benchmarks to a fixed growth rate, according to a recommendation from the Medicare Payment Advisory Commission, which advises Congress on payment issues.

In addition to benchmark reform, CMS wants to find ways to advance health equity in ACOs. The Department of Health and Human Services has made improving equity a major priority agencywide. 

CMS is exploring incentives and methods to recruit providers that care for underserved populations to become ACOs. The goal is to close gaps in outcomes and ask providers “to consider beneficiaries’ social needs in care plans,” the article said. 

CMS is also looking at reforms introduced as part of a major payment model called ACO REACH, which will require physicians who want to get fully or partially capitated payments to incorporate equity features such as an equity plan and collection of social needs data. 

“Successful features could be evaluated for possible incorporation into the Shared Savings Program,” the article wrote.