(ACO) regulations - American Society of Anesthesiologists

CMS-1345-P 254
actual expenditures for an ACO. However, section 1899(d)(1)(B)(i) of the Act only
provides authority to adjust expenditures in the performance period for beneficiary
characteristics and does not provide authority to adjust for "other factors". Therefore,
while we may adjust the benchmark under this provision by removing IME and DSH
payments, we could not also do so in our calculation of performance year expenditures.
If we were to remove IME and DSH payments from the benchmark, the benchmark
would be set artificially lower relative to the performance period, thus making it more
difficult for an ACO to overcome and achieve savings under this program. In addition,
excluding these payments would result in an artificial and incomplete representation of
actual spending of Medicare Trust Fund dollars. Further, section 1899(d)(1)(B)(ii) of the
Act requires that we update an ACO's benchmark during each year of the agreement
period based on a national standard ("the projected absolute amount of growth in national
per capita expenditures for parts A and B under the original Medicare fee-for-service
program"), which would necessarily include the effects of these payments. Additionally,
we believe all relevant Medicare costs should be included in an ACO's benchmark to
maintain sufficient incentives for ACOs to ensure their assigned beneficiaries receive
care in the most appropriate settings. For example, ACOs that include teaching and/or
DSH hospitals in their network might be more interested in joining the program if we do
not remove these payments from the calculations. This is because including these
payments would result in higher benchmarks against which such ACOs would work to
achieve savings, and such ACOs may be able to earn back a portion of forgone IME/DSH
payments in the form of shared savings in cases where a referral to a less intensive setting
is most appropriate for the beneficiary.