Accountable care organizations (ACOs) will get a long desired break from the Centers for Medicare and Medicaid Services (CMS). But it’s not the break many of them had in mind.

ACOs are evaluated by CMS based upon year-to-year performance comparisons as well as performances by other ACOs. They can earn bonuses if they meet certain measures.

Many who had entered the ACO program at its outset in 2012 complained that the standards were often difficult for them to meet, especially if they were already operating efficiently and had to beat their own performance metrics.

After long consideration, the CMS has issued revised benchmarking guidelines. Now, ACOs will be held to regional rather than national standards, and won’t have to compete against themselves to earn the sought after bonuses that make the program worthwhile to participants.

The new rules included other modifications, but the new benchmarking rule is the most controversial.

The rule allows ACOs in the program to compete against the new standards, but only after they complete their current agreement period. That’s unfair to ACOs that got into the program early and have had to meet the higher standards, say ACO managers interviewed by Modern Healthcare.

ACOs that enter the program now get the immediate benefit of the new standards, which are to kick in sometime in 2017. Meanwhile, the veterans must complete their contracts before they can benefit from the relaxed benchmarks.

"This decision puts the inaugural class of ACOs at a distinct disadvantage to those that applied later,” says Blair Childs, president of Charlotte, N.C.-based Premier Inc., a health care purchasing and performance improvement company that participated in the creation of the ACO program.

CMS was unmoved by such arguments. Its response: Shifting to new standards in mid-contract will likely prove difficult and makes things worse, not better, for the early birds. They’ll just have to tough it out.

Instant Insights /

CMS relaxes ACO performance standards but draws ire

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