One of the more difficult and complex aspects for ACOs is the issue of assigning beneficiaries to ACOs, a process that is crucial to accurately monitoring the cost and quality of care provided by the ACOs. In its initial regulations, CMS proposed to accomplish this by determining (1) an operational definition of an ACO; (2) the primary care services that will trigger an assignment to an ACO; (3) when beneficiaries will be assigned to an ACO; (4) what basis beneficiaries are assigned to an ACO; and (5) how beneficiaries will be notified of their ACO assignment and the contents of such notification.

Operational definition of an ACO

CMS had proposed that ACOs will be operationally identified as a “collection” of Medicare enrolled Tax Identification Numbers (“TINs”). Organizations applying to be an ACO will have to provide their ACO participants’ TINs, which will then be linked to an individual physician specialty code by CMS. Beneficiaries would then be assigned to an ACO through a TIN based on the primary care services they received from physicians billing under that TIN. “Primary care physicians” within a TIN, those physicians practicing internal medicine, geriatric medicine, family practice and general general, can be members of only one ACO. Other ACO participants (such as specialists and acute care hospitals) can participate in more than one ACO.

Definition of primary care services

Section 1899(c) of the Social Security Act requires beneficiaries to be assigned to an ACO based on their utilization of primary care services provided by a physician. CMS proposes to assign beneficiaries with physicians designated as primary care providers “who are providing the appropriate primary care services to beneficiaries” as identified by HCPCS code. This proposed definition excludes primary care services provided by specialists and may make it more difficult for ACOs to form in areas with a shortage of primary care physicians. Under this definition, specialists who provide primary care services would not be assigned beneficiaries and, therefore, would be able to participate in more than one ACO. If specialists were included in the definition of primary care services, they would be limited to one ACO, making it more difficult for ACOs to form in areas with shortages of specialists.

Prospective vs. retrospective beneficiary assignment

CMS examined whether beneficiaries should be assigned to an ACO prospectively based on utilization data from some prior period of service, or retrospectively based on utilization data collected during the ACO performance year. CMS proposed a combined approach. For purposes of shared savings, beneficiaries will be assigned to an ACO retrospectively in order to avoid encouraging ACOs to limit their care improvement activities to only the subset of beneficiaries they believe will be assigned to them in the performance year. CMS also proposed to provide the ACO with data on those beneficiaries assigned to the ACO in the benchmark period to allow the ACO to estimate their ACO beneficiary population.

Majority vs. plurality rule

Under the propsed rules, assignment will be based on where beneficiaries receive a plurality of their primary care services. CMS was concerned that assignments based on majority would reduce the number of beneficiaries assigned to an ACO and increase the number of unassigned beneficiaries. Determination will be based on the accumulated allowed charges, rather than simple service count. Using accumulated charges provides greater weight to more expensive, complex services; however, tie-breaker rules would not be required since it is highly unlikely allowed charges from two entities would be equal. Using accumulated allowed charges means assignment could be based more on intensity of a beneficiary’s primary care interactions, rather than frequency.

Beneficiary information and notification

CMS proposes to require ACOs to post signs in the facilities of participating ACO providers / suppliers indicating their participation and to make available “standardized written information” to Medicare fee for service beneficiaries. ACOs will have to explain to beneficiaries how assignment to an ACO is likely to affect (and not affect) the care they receive from the providers they have chosen. ACOs will be required to provide beneficiaries with a form allowing them to opt-out of having their data shared.

CMS believes beneficiary notification is essential because if a beneficiary’s physician becomes part of an ACO and the beneficiary does not wish to receive health care under the ACO model, the beneficiary has the freedom of choice to go to a different physician. 

CMS recognizes it is “not possible to inform beneficiaries of their assignment to an ACO in advance of the period in which they may seek services from an ACO” because beneficiary assignment is done retrospectively as described above. Yet, CMS proposes to require ACO providers to provide information and notice to beneficiaries regarding ACO participation.

The model for beneficiary assignment will be one of the most important elements to the Medicare Shared Savings Program. CMS’s proposed rules would allow beneficiaries unrestricted freedom to seek care from any health care providers, including those outside of the ACO network. This would make it very difficult for ACOs to control utilization and realize savings since beneficiaries will not be restricted from using non-participating providers. Additionally, because the beneficiary assignment is retrospective, the beneficiary may never know that he or she is assigned to an ACO. Without network limitations or beneficiary accountability, the Medicare Shared Savings Program may not prove to be much of a savings program at all.

 — By Richard Cowart

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