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(ACO) regulations - American Society of Anesthesiologists

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CMS-1345-P 241<br />

the demonstration which were also geographically diverse. We believe the approach to<br />

establishing the benchmark described previously would provide a relatively accurate<br />

reflection <strong>of</strong> the average population <strong>of</strong> Medicare FFS beneficiaries that receive their care<br />

from the <strong>ACO</strong> participants during the <strong>ACO</strong> agreement period. However, because the<br />

FFS population served by the <strong>ACO</strong> changes from year to year, some <strong>of</strong> the beneficiaries<br />

whose expenditures would be included in the benchmark with this approach would not be<br />

reflected in the population assigned to the <strong>ACO</strong> during the years <strong>of</strong> the <strong>ACO</strong> agreement<br />

period. It is also possible that this benchmark approach could provide unwanted<br />

incentives to seek and/or avoid specific beneficiaries during the agreement period so that<br />

average expenditures would more likely be less than for their historical beneficiaries<br />

included in the benchmark. Therefore we also considered a second option that relies on<br />

developing a benchmark based on the populations <strong>of</strong> specific beneficiaries who are<br />

actually assigned to the <strong>ACO</strong> during the agreement period.<br />

c. Option 2<br />

Under this option, for each beneficiary assigned to the <strong>ACO</strong> during the agreement<br />

period, we would calculate their per capita Parts A and B FFS expenditures during each<br />

<strong>of</strong> the 3 years immediately preceding the first year <strong>of</strong> the agreement period. These<br />

amounts would be trended to the start <strong>of</strong> the agreement period as was described for<br />

Option 1, that is, since Option 2 also requires risk adjustment, we will adjust the<br />

benchmark for health status using the same prospective CMS-Hierarchal Condition<br />

Category (CMS-HCC) risk adjuster and apply it to calculate the benchmark in the same<br />

manner as described for Option 1.

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