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(ACO) regulations - American Society of Anesthesiologists

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CMS-1345-P 279<br />

they incur shareable losses. Furthermore, we propose that at the end <strong>of</strong> each agreement<br />

period, positive balances will be returned to the <strong>ACO</strong>. However, if the <strong>ACO</strong> does not<br />

complete its 3-year agreement, the <strong>ACO</strong> would forfeit any savings withheld.<br />

14. Performance Payment Limit<br />

Section 1899(d)(2) <strong>of</strong> the Act requires the Secretary to "establish limits on the<br />

total amount <strong>of</strong> shared savings that may be paid to an <strong>ACO</strong> …." Therefore, we must<br />

propose the maximum performance payment an <strong>ACO</strong> may receive in any given<br />

performance year in this proposed rule. In determining what would constitute an<br />

appropriate limit, we believe that it should provide a significant opportunity for <strong>ACO</strong>s to<br />

receive shared savings generated from quality improvements and better coordination and<br />

management <strong>of</strong> Part A and B services, while avoiding creating incentives for excessive<br />

reductions in utilization which could be harmful to beneficiaries. Under the PGP<br />

demonstration, the limit was set at 5 percent <strong>of</strong> the organization's Part A and Part B<br />

expenditure target.<br />

For purposes <strong>of</strong> the Shared Savings Program, we considered an option to vary the<br />

performance payment limit by the readiness <strong>of</strong> the <strong>ACO</strong> to take on greater responsibility<br />

and risk. <strong>ACO</strong>s seeking to participate in the Shared Savings Program will vary with<br />

respect to their readiness to function under a risk model with respect to their<br />

organizational and systems capacity and structure. Accordingly, some <strong>ACO</strong>s might more<br />

quickly be able to demonstrate quality improvements and savings than will others.<br />

Applying differential payment limits based on an <strong>ACO</strong>'s readiness to take on risk could<br />

be another means to encourage and reward successful <strong>ACO</strong> participation.

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