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(ACO) regulations - American Society of Anesthesiologists

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CMS-1345-P 261<br />

nationwide under the FFS program in updating each <strong>ACO</strong>'s benchmark. A national<br />

growth rate would allow a single growth factor to be applied to all <strong>ACO</strong>s regardless <strong>of</strong><br />

their size or geographic area. However, a national rate could also disproportionately<br />

encourage the development <strong>of</strong> <strong>ACO</strong>s in areas with historical growth rates later in this<br />

proposed rule the national average that would benefit from having a relatively higher<br />

base, which increases the chances for shared saving, while relatively discouraging<br />

development <strong>of</strong> <strong>ACO</strong>s in areas with historically higher growth rates above the national<br />

average that would have a relatively lower base.<br />

In contrast, trending expenditures based on State or local area growth rates in<br />

Medicare A and B expenditures may more accurately reflect the experience in an <strong>ACO</strong><br />

area and mitigate differential incentives for participation based on location. Therefore,<br />

we considered an option to trend the benchmark by the lower <strong>of</strong> the national projected<br />

growth rate or the State or the local growth rate. This option would balance providing a<br />

more accurate reflection <strong>of</strong> local experience with not rewarding historical growth higher<br />

than the average. This method also instills strong saving incentives for <strong>ACO</strong>s in both<br />

high-cost growth and low-cost growth areas.<br />

After considering both <strong>of</strong> these alternatives, we are proposing to employ the<br />

national growth rate in Medicare Parts A and B expenditures for FFS beneficiaries for<br />

trending forward the fixed benchmark. We believe this approach will help to ensure that<br />

<strong>ACO</strong>s in both high spending, high growth and low spending, low growth areas will have<br />

appropriate incentives to participate in the Shared Savings Program, while also moving<br />

toward establishing a national standard for calculating and measuring <strong>ACO</strong> financial

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