ACOs seek to remove “anomalous” spending from financial benchmark calculations

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A coalition of 11 groups representing accountable care organizations (ACOs) and other health care stakeholders wants the government not to consider “anomalous” Medicare spending that is outside ACOs’ members control when determining if an ACO has exceeded its annual spending benchmarks

In a letter to Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services (CMS), the coalition members acknowledged CMS’s recent efforts to promote value-based care. They added, however, that including unusually high claims penalizes ACOs and jeopardizes participation of doctors, medical practices, and other health care organizations in them.

The letter was prompted by a spike in spending on two catheter codes, from $153 million in 2021 to $3.1 billion in 2023, with nearly all the increase coming from just 10 suppliers. This resulted in some ACOs spending more on catheters than was anticipated when determining their financial benchmarks, and thus a loss of shared savings.

“Akin to the COVID-19 Public Health Emergency, this spending is far outside the control of any clinician, hospital, other provider, or organization engaged in population health management,” the organizations wrote. They asked CMS to respond in its performance year 2023 reconciliation by:

• Removing catheter spending from ACO financial calculations. “Leaving financial calculations unadjusted distorts performance and financial benchmarks, creating an apples-to-oranges comparison for both ACOs and CMS,” the letter says. Since the catheter price increases are under investigation, “the fairest way to handle…is to remove these questionable claims from all ACO financial calculations, including historic benchmarks, trend updates, and performance year expenditures.”
• Creating an outlier policy to account for other similar variation in anomalous spending. As an example, the letter says, CMS could remove services from ACO financial calculations if spending on them exceeded some pre-determined limit
• Giving ACOs the option of a second reconciliation. The letter suggests ACOs could use this option once the government has concluded that a Medicare spending claim affecting the ACO’s spending is fraudulent.

The letter urges CMS to address these policies for the Medicare Shared Savings Program in the next Medicare Physician Fee Schedule amd om the ACO Realizing Equity, Access and Community Health Model. It concludes with a request that CMS continue working with health care organizations on long-term solutions for addressing cases of suspected and confirmed fraud, noting that “ACOs are excellent sources to uncover potential fraud, waste and abuse by identifying patterns of unusual billing.”