Keeping Health Care Local: Why MSSP Benchmarking Requires a Regional Approach
October 6, 2022

With substantial changes ahead for the Medicare Shared Savings Program, Aledade emphasizes the importance of a regional approach to benchmarking in the proposed 2023 Physician Fee Schedule.

This blog is the first of a three-part series summarizing Aledade's comment letter to CMS on the 2023 proposed Physician Fee Schedule.

In about one month, the Centers for Medicare & Medicare Services will release the final 2023 Medicare Physician Fee Schedule regulation, which will include changes to the Medicare Shared Savings Program. In the meantime, we wanted to share a summary of some of Aledade’s comments to what CMS proposed. To save those of you who don’t want to read the full 64-page letter, we are summarizing our comments on some of the MSSP benchmarking changes in this article. We will be featuring articles summarizing other areas of the proposed PFS in the coming days. 

The MSSP is now 10 years old, and while some years we see more incremental changes in the proposed PFS, this year included some potentially sweeping changes to the program. Aledade had much to say about what CMS proposed. First, we thanked CMS for its continued commitment to value-based care and the MSSP. The proposed 2023 PFS contains some important proposals that will help MSSP grow and thrive and bring us closer to the goals of increasing access to accountable care, improving health equity, and improving the alignment of MSSP with other value-based efforts. 

Now onto the details, as we believe it’s the details that will determine success in the goals CMS laid out. Health care is local, and certainly the decision to participate in MSSP is a local decision. A hospital CEO in New Orleans, Louisiana, will not invest the millions of dollars necessary to support an accountable care organization's infrastructure and the beneficiary services necessary for ACO success unless the benchmarking rules make sense in that community. CMS policies must meet clinicians where they are to encourage everyone to participate in the 2030 goal. In our comments, we applaud CMS for several proposals that do recognize the importance of paying attention to the region – for example,  the proposal to lower the negative adjustment to initial benchmarks for regional inefficiency. Our experience running ACOs is that an ACO needs to achieve savings within three years to be viable. Starting from high costs with a lower negative adjustment should make that possible for all ACOs regardless of where they start. We are pleased to see the success of the ACO Investment Model being applied broadly to MSSP through Advance Incentive Payments . We support this proposal and in our comments, encouraged CMS to open the model up even further.

CMS proposes a solution to reducing the effect an ACO has on its own benchmark to improve savings incentives.

Aledade has been advocating for a fix for the “rural glitch” for years. The rural glitch is a policy that systematically penalizes certain ACOs in rural areas and other health professional shortage areas, when they are successful at delivering better care at lower costs. It is crucial that ACOs serving underserved communities be supported equitably similar to ACOs in areas awash with specialists. The MSSP is focused on getting incentives right to encourage participation, and CMS has made improvements to the program through the years to advance that goal. However, when CMS initiated the regional efficiency adjustment in benchmarks, no one foresaw that certain ACOs would be systematically penalized for reducing Medicare expenditures. This happens because an ACO’s beneficiary population is included in the regional trend calculation, so they are penalized for making improvements to patient care and achieving savings when CMS determines their benchmark the following year. When an ACO reduces costs, this carries over to also reducing the region's costs and this effect increases the more beneficiaries an ACO has in its region. Unfortunately, many of these ACOs are disproportionately located in areas where there is a shortage of health professionals, such as rural areas and underserved communities, where CMS has stated it wants to see more participation in value-based models.

In the proposed PFS, CMS outlined a solution to set one-third of the benchmark trends using a new factor that is based on a forecast of national costs trends in Medicare. The problem is, national cost trends differ significantly and persistently from local cost trends, which will cause significant distortions in where ACOs locate. We know that CMS wants to make ACOs viable in all communities, and to help them meet that goal, Aledade and others offered some alternative proposals, including our long-standing proposal to fix the rural glitch. CMS outlined the potential solution supported by Aledade and others in the ACO community in last year’s PFS, and it is within  CMS’s regulatory authority to implement. CMS can remove the effects of an ACO on its regional trend through simple algebra, by calculating the regional benchmark trend without including the ACO’s beneficiaries. This solution would work in nearly every case and uses data CMS already produces.

Aledade will continue to work with CMS to reach our shared goals.

CMS identifies three goals for MSSP in this proposal, including growth, alignment, and equity. We agree these are the three most important goals for the future of the MSSP. And Aledade is doing its part. Our ACOs will provide care to over a million Medicare beneficiaries in 2023, a more than 30% increase from the number of Medicare beneficiaries attributed to an Aledade practice in 2022. Aledade partners with practices that disproportionately serve patients in areas with a lower median income compared to both Original Medicare and the MSSP. More than 65% of the practices that Aledade partnered with in 2021 are in a Primary Care Health Professional Shortage Area, and nearly half are in a Medically Underserved Area. Our health equity efforts have led to the recruitment of more diverse patient populations and targeted improvement in hypertension control in African American patient populations. We believe that physician-led accountable care organizations are well-positioned to address health equity through a value-based care system that effectively reduces costs and improves quality.