June 16, 2021 – In a letter sent to Congress, 13 healthcare organizations, including the National Association of ACOs (NAACOS), expressed their strong support for a recently reintroduced bill that they say fixes a flaw in the way financial targets, or benchmarks, are set for Medicare accountable care organizations (ACOs).
“The Accountable Care in Rural America Act (H.R. 3746) would improve the accuracy and fairness for evaluating ACOs, especially those in rural areas. Specifically, the bill would require CMS to remove an ACO’s assigned patients when calculating the costs of patients in the ACO’s region, which partially determines that ACO’s benchmark, the CMS-set spending target to which an ACO is held accountable,” NAACOS says. “The move would more fairly and accurately compare an ACO’s spending to its surrounding area.
“When the Medicare Shared Savings Program (MSSP) started in 2012, ACO benchmarks were made entirely of ACO participants’ historical spending. This approach wasn’t sustainable because ACOs would continue to lower costs and benchmarks could only go so low, leading CMS to incorporate Medicare spending from an ACO’s region into benchmarks.
“This regional adjustment rewards ACOs with costs lower than others in their surrounding area and is an approach seen in other programs such as Medicare Advantage.
“However, the way CMS defines the “region” for ACOs is flawed and unfairly disadvantages ACOs who make up a large part of their market. The flaw is dubbed the “rural glitch” because it largely affects rural ACOs, although most ACOs would benefit from the solution in the Accountable Care in Rural America Act,” NAACOS says.