October 15, 2021 – In a letter to the Centers for Medicare and Medicaid Services (CMS), 12 healthcare associations and stakeholder organizations urged Medicare to better account for the COVID-19 pandemic in accountable care organizations’ (ACOs) financial targets.
The groups, led by the National Association of ACOs, asked for an option to select pre-pandemic years on which to base benchmarks, citing fairness in the way performance is measured in light of the global pandemic.
ACOs’ financial targets are based primarily on ACO participants’ historic spending. Under the current rules, ACOs that are starting or renewing an agreement in 2022 would have to use 2019–2021 as their baseline.
Benchmarks that are based on 2020 would be unrealistically low due to the fact that many patients avoided routine medical care last year, NAACOS says.
Because Medicare spending fell nationally by roughly 7% in 2020, many ACOs will be harmed by having future performance judged against a spending target based partly on 2020, which was such an abnormal year.
In an analysis conducted by the Institute for Accountable Care, 45 percent of ACOs entering a new contract in the Medicare Shared Savings Program (MSSP) would be harmed unless currently policy is changed. This includes more than 10% of those ACOs that are set to see their benchmarks rise by more than 3% because of the inclusion of pandemic-stricken years.
NAACOS also cited precedent for this type of change – CMS has modified other Medicare payment systems and value-based payment programs not to use data from years affected by the COVID-19 pandemic to set future financial and/or quality benchmarks.