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Analysis

MedPAC Urges CMS to Drop Pandemic-skewed 2020 ACO Benchmarks

By John Commins  
   April 14, 2020

MedPAC asks CMS not to use 2020 data to calculate baseline year spending for future benchmarks.

The Medicare Payment Advisory Commission is recommending that the Centers for Medicare & Medicaid Services scrap pandemic-skewed 2020 performance benchmarks for at-risk accountable care organizations.

"The COVID-19 public health emergency has likely affected—and will continue to affect, at least through 2020—Medicare spending in ways that are yet to be fully understood," MedPAC Chairman Francis J. Crosson, MD, said in a letter this week to CMS Administrator Seema Verma.

"This is particularly problematic for providers participating in ACOs, whose 2020 performance will be assessed using benchmarks established before the current emergency," Crosson said. "Given the dramatic shifts in care delivery that have occurred in 2020, attempting to adjust 2020 spending and benchmarks for COVID-19 will be impractical. It also may be inequitable."

Specifically, Crosson asked CMS to:

  • Not use 2020 data to determine ACO quality, bonuses and penalties; not use 2020 data to calculate baseline year spending for future benchmarks; and consider extending existing ACO agreement periods by one year.
     
  • Not use 2020 claims data to assign beneficiaries, because the use of telehealth could distort ACO assignment. Instead, MedPAC is recommending that CMS consider using 2019 and/or 2021 claims data to assign beneficiaries in 2021.
     
  • Provide an extension of the NextGen ACO model through 2023, which will give ACOs already in the model time to continue in the program without having to adapt to a new model during the pandemic.
     
  • Delay the start of the Center for Medicare & Medicaid Innovation Direct Contracting model, by at least one year, to give providers a change to understand the new model before committing to it.

NAACOS Objects

The MedPAC recommendations brought down the ire of the National Association of ACOs, which said "ignoring shared savings in 2020 would devastate Medicare ACO programs."

"In 2018, Medicare paid ACOs back roughly $900 million of the $1.7 billion they saved. ACOs used that money to pay for quality improvement programs, care coordinators, health IT, analytics and other infrastructure," NAACOS said.

"Without those funds, ACOs will no longer have resources to focus on improving quality and addressing chronic disease, which help improve patient care. The impact of the pandemic will play out differently from region to region and market to market. To gut the savings opportunity before the data are in is presumptuous at best."

Instead, NAACOS said, MedPAC should consider other options, such as holding at-risk ACOs harmless, allowing ACOs to forego less shared savings in exchange for less risk, or extending the dropout deadline to give ACOs the chance "to understand how COVID-19 will playout in the coming months.

"MedPAC has consistently underplayed the value ACOs bring to Medicare payment reform.," NAACOS said. "Let's hope CMS doesn't accept this advice that would have detrimental effects on Medicare's overall shift to value."

A poll released this week shows that 54% of ACOs in Medicare's Shared Savings Program would likely leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic.

The National Association of ACOs estimates that the COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year.

A separate study released last week by America's Health Insurance Plans estimated the cost of the pandemic for the nation's healthcare system at between $56 billion and $556 billion

“Given the dramatic shifts in care delivery that have occurred in 2020, attempting to adjust 2020 spending and benchmarks for COVID-19 will be impractical. It also may be inequitable.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

MedPAC also recommends that CMS not use 2020 claims data to assign beneficiaries, because the use of telehealth could distort ACO assignments.

Instead, MedPAC is recommending that CMS consider using 2019 and/or 2021 claims data to assign beneficiaries in 2021.

The commission also called for an extension of the NextGen ACO model through 2023, which will save ACOs from having to adapt to a new model during the pandemic.

The MedPAC recommendations brought down the ire of the National Association of ACOs, which said "ignoring shared savings in 2020 would devastate Medicare ACO programs."


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