(ACO) regulations - American Society of Anesthesiologists

CMS-1345-P 244
Additionally, Option 2 would require an adjustment for assigned beneficiaries
who die during an agreement year. We know that approximately 5 percent of all
Medicare beneficiaries die in a single year, and that their average monthly expenditures
are often higher during this last year of life compared to the immediately preceding years.
For these beneficiaries, the benchmark might therefore not be a fair basis for comparison
with actual expenditures for purposes of determining shared savings, which could create
incentives for ACOs to avoid assignment of beneficiaries who may be in their last year of
life or treat such beneficiaries differently. This would not be the case for Option 1 as that
benchmark approach would include the average per capita costs of beneficiaries who died
during the benchmark period. We are therefore considering one of two methods to adjust
for this beneficiary characteristic within Option 2.
Under the first method for adjusting for decedents, we would propose to exclude
the expenditures of deceased beneficiaries from actual expenditures during the agreement
period. We believe this approach would best avoid concerns about creating incentives for
ACOs to avoid assignment of beneficiaries in their last year of life or treat such
beneficiaries differently. In a second method for adjusting for decedents, we would
compare average expenditures for each deceased beneficiary during the agreement year
to the average expenditures for beneficiaries included in the benchmark.
• If the agreement year's expenditures were 5 percent or less above the
benchmark, we would make no adjustment;
• If the agreement year's expenditures were greater than 5 percent above the
benchmark, we would need to decide upon an acceptable method to adjust the
accumulated expenditures for deceased beneficiaries.