(ACO) regulations - American Society of Anesthesiologists

CMS-1345-P 262
performance. We seek comment on this proposal and on the alternatives to using a
national growth rate as outlined previously.
9. Updating the Benchmark During the Agreement Period
Section 1899(d)(1)(B)(ii) states that the benchmark shall be "updated by the
projected absolute amount of growth in national per capita expenditures". We believe
that Congress demonstrated an interest in mitigating some of the regional differences in
Medicare spending among ACOs by requiring the use of a flat dollar amount equivalent
of the absolute amount of growth in national FFS expenditures to update the benchmark
for the agreement period. In effect, in the second and third years of an agreement period,
using a flat dollar increase, which would be the same for all ACOs, provides a relatively
higher expenditure benchmark for low growth low spending ACOs and a relatively lower
benchmark for high growth high spending ACOs. All else being equal, an ACO can
more likely share in savings when its actual expenditures are judged against a higher,
rather than a lower benchmark. Thus, with a flat dollar increase to the benchmark, ACOs
in high cost high growth areas must reduce their rate of growth more to bring their costs
more in line with the national average.
However, we also considered our authority under Section 1899(i) for an
alternative option. Specifically, we considered an option to update the benchmark by the
lower of the national projected absolute amount of growth in national per capita
expenditures or the local/State projected absolute amount of growth in per capita
expenditures. Incorporating more localized growth factors reflects the expenditure and
growth patterns within the geographic area served by ACO participants and ACO
providers/suppliers, potentially providing a more accurate estimate of the updated