Statistical Uncertainty in the Medicare Shared Savings Program

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CMS has released the results of a recent analysis, published in Vol. 2, No. 4 of the Medicare & Medicaid Research Review, entitled Statistical Uncertainty in the Medicare Shared Savings Program.  The study examined the statistical risks facing CMS and Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) and found that random fluctuations in year-to-year healthcare spending may play a larger-than-expected role in savings measurement. Particularly smaller ACOs face real risk that they may be “inappropriately rewarded” or pay an “undeserved penalty” with respect to cost savings they achieve (or fail to achieve).  The study analyzes the MSSP formulas that are designed to control for random fluctuations in healthcare spending and offers a discussion of policy implications and suggestions for incorporating the analysis into future ACO reimbursement formulas.  A copy of the paper is available by clicking here.

Reporter, Susan Banks, Washington, D.C., +1 202 626 2953, sbanks@kslaw.com.