(ACO) regulations - American Society of Anesthesiologists

CMS-1345-P 278
13. Withholding Performance Payments to Offset Future Losses
Over the course of the program, an ACO may earn performance payments in
some years and incur losses in other years. The issue is whether the full amount of
shared savings payments should be paid in the year they are accrued, or whether some
portion should be withheld to offset potential future losses. For example, under the PGP
demonstration, a flat 25 percent withhold applied to annual earned performance payments
to guard against losses in future years as well as to provide an incentive for PGPs to
continue in the demonstration since the withhold was only released at the end of the
demonstration period or when the PGPs were rebased. Under the two-sided model
discussed in section II.G. of this proposed rule, we propose that an ACO may use a
withhold of their earned shared savings payment as one option for demonstrating an
adequate repayment mechanism in the event they incur shareable losses. As discussed in
sections II.B. and II.I. of this proposed rule, we believe the requirement that ACOs be
willing to commit to a 3-year agreement to participate in the Shared Savings Program is
necessary to ensure that the program achieves its long-term goal of redesigning health
care processes, and our proposal here furthers that intent. Since we want to encourage
ACOs to participate for all 3 years of their agreements, protect the Medicare program
against losses, and ensure ACOs have an adequate repayment mechanism in the event
they incur losses under either the one-sided or two-sided model, we are proposing a flat
25 percent withholding rate will be applied annually to any earned performance
payment. Under the two-sided model as discussed in Section II.G. of this proposed rule,
we propose that an ACO may withhold an additional portion of its earned performance
payment as a mechanism to demonstrate an adequate repayment mechanism in the event