The Centers for Medicare and Medicaid Services (CMS) changed the benchmark methodology for accountable care organizations (ACOs) entering a renewal Medicare Shared Savings Program (MSSP) agreement period in 2017 and thereafter. The 2017 methodology introduced a regional adjustment, where an ACO’s historical expenditures are adjusted upward or downward based on how their costs compare to regional expenditures on a risk-adjusted basis. Because the risk adjustment depends on an ACO’s benchmark period risk scores, accurate and complete diagnosis coding during the benchmark period now has a significant influence on the calculation of the ACO’s benchmarks in future performance years.
CMS uses benchmark year (BY) 3 risk scores for the calculation of the regional adjustment, scores that are based on diagnoses from claims incurred in BY2. MSSP ACOs anticipating renewals in 2020 need to be working this year (2018) to ensure accurate and complete coding. Similarly, 2019 is the critical year for 2021 renewals.
In this paper, Milliman’s Jonah Broulette, Noah Champagne, and Kate Fitch explain how BY3 risk scores affect the benchmark calculation for MSSP renewals, present an overview of the prior and new risk adjustment calculations in MSSP, and illustrate how the change can affect an ACO’s benchmark under various scenarios.
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.
In the United States, approximately 600,000 hysterectomies are performed each year. Several surgical approaches are used to perform them. Open abdominal hysterectomy is the most common and invasive approach. All other approaches are classified as minimally invasive procedures. In this paper, Milliman’s Kate Fitch and Andrew Bochner analyze commercial payer differences in the average costs and readmission rates between inpatient open hysterectomies and three types of outpatient hysterectomies: laparoscopic, laparoscopic assisted, and vaginal.
This article was originally published in the August 2016 issue of Managed Care.
Numerous studies comparing the safety and efficacy of minimally invasive surgery (MIS) and open surgery have shown that MIS is associated with shorter intensive care and hospital stays and lower rates of transfusion, readmission, surgical site infections, pain, mortality, and time taken to return to normal activities or work. Despite evidence supporting the benefits of MIS, its use varies widely by region and hospital. In this study, Milliman consultants analyze the difference in payer costs between MIS and open surgery in a commercial population for four commonly performed elective surgical procedures.
This article was originally published in the September 2015 issue of Managed Care.
Major efforts to improve the care and reduce the cost of heart failure patients have recently been implemented. Despite these efforts, however, the rate of heart failure is rising and only small improvements in survival have been realized. The lack of novel therapies and limited improvement in medical management highlight the need for more focus on heart failure, especially among the Medicare population. Milliman consultants Bruce Pyenson, Kate Fitch, and Pamela Pelizzari provide some perspective in this report.
The opportunity to reduce Medicare claims cost in the Bundled Payment for Care Improvement Initiative (BPCI) of the Center for Medicare and Medicaid Innovation (CMMI) is typically in the post-acute care (PAC) period. Analyzing the opportunity to reduce Medicare PAC spending requires providers to adopt a payor state of mind—payor tools and approaches will be very helpful. Benchmarking to best practices is one of those tools.
Milliman has developed nationwide average and well-managed (WM) benchmarks for PAC periods of one to 30, 31 to 60, and 61 to 90 days. Milliman’s Bruce Pyenson, Kate Fitch, Michele Barrios, and Tyler Engel provide perspective in this healthcare reform paper.