Medicare ACO assignment methodology change may have unintended consequences

A number of Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs) experienced significant, unanticipated changes in their 2017 performance year historical benchmarks and performance expenditures. These changes were not consistent in direction or magnitude. The exclusion of some nursing facility visits from MSSP assignment, effective in 2017, is the likely cause of the unanticipated changes.

The Centers for Medicare and Medicaid Services (CMS) now excludes nursing facility provider evaluation and management visit codes with place of service (POS) 31 as a qualifying claim type for beneficiary assignment. This assignment methodology change is referred to as the POS 31 exclusion. It started with the 2017 performance year and is also applied to the corresponding baseline years for all MSSP tracks.

Some ACOs likely lost and some likely gained costly nursing facility beneficiaries due to the new exclusion in both the baseline and performance years. The POS 31 exclusion only works as intended if POS codes correctly differentiate between Part A skilled nursing facilities and other nursing facility patient services. Unfortunately, our analysis across the Medicare 5% sample indicates that POS codes for nursing facility-based claims may not always be reliable.

To read more about the possible impact of these changes, read this article by Tia Sawhney, Kate Fitch, and Cory Gusland.

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