(a) Savings determination. For each performance year, CMS determines whether the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries for Parts A and B services are below the applicable updated benchmark determined under Sec. 425.602.
(1) Newly assigned beneficiaries. CMS uses an ACO's HCC prospective risk score to adjust for changes in severity and case mix in this population.
(2) Continuously assigned beneficiaries. (i) CMS uses demographic factors to adjust for changes in the continuously assigned population.
(i) CMS uses demographic factors to adjust for changes in the continuously assigned population.
(ii) If the prospective HCC risk score is lower in the performance year for this population, CMS will adjust for changes in severity and case mix in this population using this lower prospective HCC risk score.
(3) Assigned beneficiary changes in demographics and health status are used to adjust benchmark expenditures as described in Sec. 425.602(a). In adjusting for health status and demographic changes CMS makes adjustments for separate categories for each of the following populations of beneficiaries:
(i) ESRD.
(ii) Disabled.
(iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
(iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
(4) To minimize variation from catastrophically large claims, CMS truncates an assigned beneficiary's total annual Parts A and B fee-for-service per capita expenditures at the 99th percentile of national Medicare fee-for-service expenditures as determined for each performance year.
(5) CMS uses a 3 month claims run out with a completion factor to calculate an ACO's per capita expenditures for each performance year.
(6) Calculations of the ACO's expenditures will include the payment amounts included in Part A and B fee-for-service claims.
(i) These calculations will exclude indirect medical education (IME) and disproportionate share hospital (DSH) payments.
(ii) These calculations will take into consideration individually beneficiary identifiable payments made under a demonstration, pilot or time limited program.
(7) In order to qualify for a shared savings payment, the ACO's average per capita Medicare expenditures for the performance year must be below the applicable updated benchmark by at least the minimum savings rate established for the ACO under paragraph (b) of this section.
(b) Minimum savings rate (MSR). CMS uses a sliding scale, based on the number of beneficiaries assigned to the ACO under subpart E of this part, to establish the MSR for an ACO participating under the one-sided model. The MSR under the one-sided model for an ACO based on the number of assigned beneficiaries is as follows: ------------------------------------------------------------------------
MSR (low end MSR (high end
of assigned of assigned
Number of beneficiaries beneficiaries) beneficiaries)
(percent) (percent)------------------------------------------------------------------------5,000-5,999............................. 3.9 3.66,000-6,999............................. 3.6 3.47,000-7,999............................. 3.4 3.28,000-8,999............................. 3.2 3.19,000-9,999............................. 3.1 3.010,000-14,999........................... 3.0 2.715,000-19,999........................... 2.7 2.520,000-49,999........................... 2.5 2.250,000-59,999........................... 2.2 2.0
-------------------------------60,000 +................................ 2.0------------------------------------------------------------------------
(c) Qualification for shared savings payment. In order to qualify for shared savings, an ACO must meet or exceed its minimum savings rate determined under paragraph (b) of this section, meet the minimum quality performance standards established under Sec. 425.502, and otherwise maintain its eligibility to participate in the Shared Savings Program under this part.
(d) Final sharing rate. An ACO that meets all the requirements for receiving shared savings payments under the one-sided model will receive a shared savings payment of up to 50 percent of all savings under the updated benchmark, as determined on the basis of its quality performance under Sec. 425.502 of this part (up to the performance payment limit described in paragraph (e)(2) of this section).
(e) Performance payment. (1) If an ACO qualifies for savings by meeting or exceeding the MSR, the final sharing rate will apply to an ACO's savings on a first dollar basis.
(1) If an ACO qualifies for savings by meeting or exceeding the MSR, the final sharing rate will apply to an ACO's savings on a first dollar basis.
(2) The amount of shared savings an eligible ACO receives under the one-sided model may not exceed 10 percent of its updated benchmark.
(f) Notification of savings. CMS notifies an ACO in writing regarding whether the ACO qualifies for a shared savings payment, and if so, the amount of the payment due.