New ACO Reg has some zingers

The newly minted ACO regulation from Medicare has some zingers hidden in its 696 pages.  Okay, to be fair, the actual regulation is only 70 pages long, double spaced.  The rest is all preamble, where CMS describes the 1200 comments on the proposed rule, and how they have responded (or not) in the final rule.

The first zinger has to do with the Physician Quality Reporting System, known to its friends as PQRS.  Since 2007, CMS has paid a bonus to physicians who report quality data.  Under current rules, CMS will pay physicians ½% of allowed charges from 2012 through 2014.  BUT, docs in an ACO will only be able to participate in the PQRS through the ACO.  The ACO will report as if it were a group practice.  If the ACO fails to report in compliance with the PQRS rules, its docs won’t get the PQRS bonus.  This could be an issue in recruiting doctors who may not see a clear advantage to the ACO to begin with, given all the other requirements.

A second zinger is the approach to risk adjustment.  CMS has agreed to use the Medicare Advantage HCC risk adjuster  for newly assigned beneficiaries.  They won’t use HCCs for continuing beneficiaries — people who were assigned to the ACO last year.  HCCs are based on diagnosis codes on last year’s claims.  CMS reasons that an ACO would improve coding accuracy in year one, to get the best risk adjustment they could for continuing beneficiaries in year 2.  So only new-to-the-ACO beneficiaries will get risk adjusted for higher HCC scores.  BUT, if the average HCC score for continuing beneficiaries goes down in year two, then CMS will risk adjust and reduce the benchmark accordingly.  The inference is that reduced scores could only reflect reduced average risk.  So ACOs that are not diligent in keeping their risk scores up could be docked a chunk of money for apparent losses resulting from poor coding, not from poor care management.

To read GHG’s summary on the CMS Final Rule for the Medicare Shared Savings Program, click here.