(ACO) regulations - American Society of Anesthesiologists

CMS-1345-P 265
upon the number of Medicare FFS beneficiaries assigned to the ACO. The MSR should
be set in a way that gives us some assurance that the ACO's performance is a result of its
interventions, not normal variation. However, we also do not want an outcome where
savings that have been earned are not recognized.
Establishing an MSR on the basis of standard inferential statistics that take into
account the size of an ACO's beneficiary population provides confidence that, once the
savings achieved by the ACO exceed the MSR, the change in expenditures represents
actual performance improvements by the ACO as opposed to normal variations.
Under the PGP demonstration, the MSR was initially set at a flat 2 percent of the
benchmark, regardless of number of assigned beneficiaries, and PGP practices received
back 80 percent of the savings achieved in excess of the MSR. However, in establishing
a MSR, section 1899(d)(1)(b)(i) of the Act calls on us to take into account "the number of
fee-for-service beneficiaries assigned to an ACO." As such, we would need to apply
statistical sampling techniques to determine a MSR based on the number of assigned
beneficiaries with some level of statistical confidence.
The MSR in combination with the savings rate will determine the amount of
shared savings that an ACO can receive. For example, fewer savings would be shared if
the MSR were set at a higher percentage. Conversely, shared savings would be higher if
the MSR were set at a lower percentage. There are several policy implications associated
with the methodology used to set the MSR. A higher MSR would provide greater
confidence that the shared savings amounts reflect the real quality and efficiency gains,
and offer greater protection to the Medicare Trust Funds. However, due to the larger
barrier to achieve savings, a higher MSR could also discourage potentially successful