To participate in the CMS Medicare Shared Savings Program, providers must come together to become a Medicare ACO and the ACO must apply to CMS. To be accepted, ACOs must meet all eligibility and program requirements, must serve at least 5,000 Medicare Fee-For-Service patients and agree to participate in the program for set amount of time. Medicare providers who participate in an ACO in the Medicare Shared Savings Program will continue to receive payment under the Medicare Fee-For-Service rules. Each ACO also is required to establish a governing body representing ACO providers of services, suppliers, and Medicare beneficiaries. The ACO will be responsible for developing processes to promote evidence-based medicine, promote patient engagement, internally report on quality and cost, and coordinate care. The ACO will be responsible for maintaining a patient-centered focus.
Medicare will continue to pay individual providers and suppliers for specific items and services it currently does under the Medicare Fee-For-Service payment systems. CMS develops a benchmark for each ACO against which ACO performance is measured to assess whether it qualifies to receive shared savings. The benchmark is an estimate of what the total Medicare Fee-For-Service Parts A and B expenditures for ACO beneficiaries would otherwise have been in the absence of the ACO, even if all those services were not provided by providers in the ACO. The benchmark will take into account beneficiary characteristics and other factors that may affect the need for health care services. This benchmark will be updated for each performance year within the agreement period. CMS also will establish a Minimum Savings Rate (MSR) and a Minimum Loss Rate (MLR) to account for normal variations in health care spending. If an ACO meets quality standards and achieves savings and also meets or exceeds the MSR, the ACO will share in the savings, based on the quality score of the ACO. ACOs will share in all savings, not just the amount of savings that exceeds the MSR, up to a performance payment limit.
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