ACO Proposed Rule Review – Part 11: Quality & Performance Measurements

The following provisions can be found on pages 201-229 of the proposed regs: .

This next section refers frequently to Table 1 with the measures, so here is the link:

 IIE—Quality and performance measurements   Part III:   CMS considered two options for establishing quality standards:  Option 1–rewards for better performance, “Performance Scoring”; or Option 2—minimum quality threshold for shared savings “Minimum Quality Threshold,” (under option 2, a minimum threshold would be set for all quality measures, and if met by the ACO, the ACO would receive a fixed percentage of shared savings attributable to quality).  Performance Scoring is the option that CMS is proposing to use, but they are seeking comments on both.

         Performance Scoring (option 1)

  • The 65 measures in Table 1 would be used to establish the quality performance standards that ACOs must meet in order to be eligible for shared savings.
  • Quality performance standards would be used to arrive at a performance score for an ACO (instead of using a minimum quality threshold approach).  Measures would be organized by domain (see below); the score for the measures would be rolled up into a score for each domain.  The percentage of points earned for each domain would be aggregated using the weighting method to arrive at a single percentage that will be applied to determine the quality sharing rate for which the ACO is eligible. 
  • The aggregated domain scores will determine the ACO’s eligibility for sharing up to a certain percentage of the total savings generated by the ACO as follows:

1)      For the one-sided model:   up to 50%

2)      For the two-sided model:   up to 60%

  • The domains are:

1)      Patient/caregiver experience (measures 1-7 in Table 1);

2)      Care coordination (measures 8-23 in Table 1);

3)      Patient safety (measures 24-25 in Table 1);

4)      Preventive health (measures 26-34 in Table 1);

5)      At-risk population/frail elderly health (measures 35-65 in Table 1—diabetes, heart failure, coronary heart disease, hypertension, chronic obstructive pulmonary disorder, frail elderly). 

  • For the first year of the Shared Savings Program (SSP), the quality performance standard would be at the reporting level (informational purposes) and the standard would be set higher in subsequent years.
  • The benchmarks for each measure would be set using Medicare FFS claims data, MA quality performance rates (note: not sure why MA information would be used), or where appropriate, the corresponding percent performance rates that an ACO will be required to demonstrate.
  • For each measure, a performance benchmark and a minimum attainment level (30%) would be set as follows (see Table 3 on Page 204):

1)      90+ percentile FFS/MA Rate or 90+ percent = 2 quality points

2)      80+ percentile FFS/MA Rate or 80+ percent = 1.85 quality points

3)      70+ percentile FFS/MA Rate or 70+ percent = 1.7 quality points

4)      60+ percentile FFS/MA Rate or 60+ percent = 1.55 quality points

5)      50+ percentile FFS/MA Rate or 50+ percent = 1.4  quality points

6)      40+ percentile FFS/MA Rate or 40+ percent = 1.25 quality points

7)      30+ percentile FFS/MA Rate or  30+ percent = 1.10 quality points

8)      <30 percentile FFS/MA Rate or <30 percent = No quality points

The benchmarks would be established using the most currently available data source and most recent available year of benchmark data prior to the start of the SSP annual agreement periods. 

  • Medicare FFS rates would be determined by pulling a data sample and modeling the measures. 

For MA rates, the distribution from annual MA quality performance data would be checked and set accordingly. (Note:  not sure why MA rates are applicable).

  • Benchmark levels for each of the measures included in the quality performance standard would be made available to ACOs prior to the start of the SSP and each annual performance period thereafter, so ACOs will be aware of the benchmarks they must achieve to receive the maximum quality score. In future program years, the actual ACO performance will be used to update the benchmarks. 
  • If an ACO fails to meet quality performance standard during a performance year (i.e., fails to meet the minimum attainment level for one or more domain(s)), the ACO will be given a warning, be provided an opportunity to resubmit, and the ACO’s performance will be reevaluated the following year.  If the ACO continues to significantly under-perform, the agreement may be terminated.  ACOs that exhibit a pattern of inaccurate or incomplete reporting or fail to make timely corrections following notice to resubmit may be terminated from the program. 
  • The initial minimum attainment level for both the one-sided and two-sided models would be set at 30 percent or the 30th percentile.
  • Performance below the minimum attainment level (again, initially 30 percent or 30th percentile) would earn zero points for that measure under both the one-sided and two-sided risk models.  Performance equal to or greater than the minimum attainment level but less than the performance benchmark shall receive points on a sliding scale based on the level of performance for those measures in which the points scale applies. 
  • Measures 35 and 52 in Table 1 (diabetes and coronary artery disease composite measures) would be all or nothing scoring.  If all criteria are met, then maximum available points would be awarded but if at least one of the criteria are not met, then zero points would be given.  But, in addition to scoring diabetes and CAD composites, the individual sub-measures also would be scored (Note:  see page 205—I believe they mean that it would be in addition to the all or nothing score, but this is not entirely clear).
  • Measure 24 in Table 1 is a hospital acquired conditions (HACs) composite that would be scored using the same scale for other measures in Table 3;  all or nothing composite scoring for HACs would NOT be used.
  • ACOs would receive performance feedback at both the individual measures and domain level.  
  • Performance rates would be posted for the final measures sets, including applicable benchmarks, on the CMS website prior to the start of the first performance period.
  • (Note:  under the Performance Scoring Option, an ACO could receive rewards for higher quality based on outcomes in one or two domains, while having very low quality in others.) 


  • Methodology for Calculating a Performance Score for each Domain:
    • In the first year of the program, a quality standard would be set for each domain at the reporting level.  Full and accurate reporting of the quality measures in the first year of the SSP will result in an ACO earning 60% (2-sided model) or 50% (1-sdded model) of the shareable savings.
    • For subsequent program years CMS would:
      • Calculate the percentage of point an ACO earns for each domain after determining the points earned for each measure (up to 2 points per measure, multiplied by the number of measures in the domain)
      • Divide the points earned by the ACO across all measures in the domain by the total points available in the particular domain (e.g., an ACO received 7 out of potential 14 points, to get a percentage figure:  0.5)
      • Scores for each of the quality domains would be aggregated into a single overall ACO score that would be used to calculate the ACOs final sharing rate for purposes of determining shared savings (or shared losses under the 2-sided model).  All domain scores for an ACO would be averaged together equally (Note:  so all domains, as opposed to all measures, would be weighted equally).
      • For example:  if an ACO’s domain scores average  75%, and the amount of savings is $1 million:  For the 1-sided model, the shareable savings would be $375,000 (50% of $1 million = $500,000 * .75 = $357,000;  For the 2-sided model, the sharable savings would be $450,000 (60% of $1 million * .75 = $450,000).
      • ACOs must report completely and accurately on all measures within all domains to be deemed eligible for the shared savings consideration.
      • Under future rulemaking, CMS plans to raise the quality performance standard requirements beginning in the second program year, when actual performance on the reported measures would be considered in determining whether an ACO is eligible to receive any shared savings (provided, the ACO realizes cost savings)
      • Note:  The other options CMS considered but did not propose can be found on pages 211 -215 and include:  establishing performance standards for the overarching goals (improving health care for individuals and populations); a single performance standard to measure overall ACO performance; permitting the ACO to satisfy the quality performance standards based on peer to peer benchmarking (benchmarks would be set based on all ACOs’ performance during the year); and permitting ACOs to report a subset of the measures in Table 1, based on their level of readiness to participate in the SSP.
      • CMS (see pages 214-215) is seeking comment on the performance scoring option and the alternative quality threshold option, and would like feedback on the appropriateness of weighting all domains equally in determining an ACO’s quality performance or whether certain domains and/or specific measures should be weighted more heavily.  Also, is there a way to blend the approaches (e.g., under the 2-sided model, allowing ACOs that generate savings to increase their share of savings with higher quality scores (option 1) but using a threshold approach (option 2) when calculating losses so that higher quality does not reduce an ACO’s share of any losses.
      • Comments also are sought on the proposals:  to set the quality performance standard for the  first program year at the reporting level and to raise the standard to reflect performance in subsequent years; regarding the proposed quality measures scoring methodologies under the 1-side and 2-sided risk models; and to have all quality measures listed in Table 1 required of all ACOs, and the alternative under which ACOs would be required to only report a subset of the measures in Table 1, based on their level of readiness for the SSP.


  • Incorporation of Other Reporting requirements related to the Physician Quality Reporting System (PQRS) and Electronic Health Records Technology
    • Certain reporting requirements and payments related to PQRS would be incorporated into the SSP for eligible professionals (EPs) (which include physicians) within an ACO.
    • CMS would incorporate a PQRS group practice reporting option (GPRO) under  the SSP
    • EPs that are ACO participant provider/suppliers would constitute a group practice for purposes of qualifying for a PQRS incentive under the SSP.  EPs would be required to submit data through the ACO on the quality measures proposed in Table 1 using the GPRO tool and methodology to quality for the PQRS incentive under the SSP. 
    • The ACO would report and submit data on behalf of the EPs in an effort to qualify for the PQRS incentive as a group practice (as opposed to qualifying individually).
    • A calendar year reporting period (Jan 1-Dec 31) would be used for purposes of the PQRS incentive under the SSP.
    • Certain aspects of the criteria for satisfactory reporting under the 2011 PQRS GPRO option would be used with a few modifications. The following criteria would be used for satisfactory reporting for purposes of the PQRS incentive for the first performance period under the SSP:
      • ACOs, on behalf of EPs, would need to report on all measures included in the data collection tool;
      • Beneficiaries will be assigned to the ACO using the methodology described in the Assignment section.  As a result, the GPRO tool would be populated based on a sample of the ACO-assigned beneficiary population.  ACOs would need to complete the tool for the first 411 consecutively ranked and assigned beneficiaries in the order in which they appear in the Group’s sample for each domain, measure set, or individual measure if a separate denominator is required such as in the case of preventive care measures which may be specific to one sex.  If the pool of eligible assigned beneficiaries is less than 411, the, the ACO would report on 100% of assigned beneficiaries for the domain, measure set, or individual measure.
      • The GPRO tool will need to be completed for all domains, measure sets, and measures described in Table 1.  Accordingly, EPs within an ACO that satisfactorily report the measures proposed in Table 1 during the reporting period would qualify under the SSP for a PQRS incentive equal to 0.5 percent of the ACO’s eligible professionals’ total estimated Medicare Part B PFS allowed charges for covered professional services for which payment is made under, or based on, the physician fee schedule and which are furnished under the ACO participant’s TINs.
      • CMS plans to align the incorporated PQRS requirements with the general SSP reporting requirements, such that no extra reporting is actually required in order for EPs or the ACO to earn the PQRS incentive under the SSP.
      • For ACOs that meet the quality performance standard under the SSP for the first performance period, the PQRS EPs within such ACOs will be considered eligible for the PQRS incentive under the SSP for that year.
      •  ACOs would have to report on all measures proposed in Table 1 in order to receive both the SSP shared savings  and PQRS incentive.
      • Failure to meet the SSP quality performance standard would result in failure to be considered eligible for shared savings, as well as failure for the EPs within the ACO to receive a PQRS incentive under the SSP for that year. 
      • BUT, ACO participant providers/suppliers who meet the quality performance standard but do not generate shareable savings would still be eligible for PQRS incentive payments. 
      • A complete list of PQRS EPs can be found at:
      • Similar to traditional PQRS, an EP could not qualify for the PQRS incentive as both a group that is part of an ACO and as an individual.
      • EPs could not quality for a PQRS incentive under both  the PQRS under the SSP and the traditional PQRS.
      • For purposes of analysis and payment, TINs and NPIs will be used as they are with the traditional PQRS.
      • CMS is NOT proposing to incorporate such payments for the EHR Incentive Program or Electronic Prescribing Program under the SSP.
      • But, the measures included in the EHR Incentive Program and metrics related to successful participation in the Medicare and Medicaid EHR Programs for EPs and hospitals and the E-Rx Incentive Program, as illustrated in Table 1, would be required in the SSP.  Metrics related to successful participation in the EHR Incentive Program and the E-Rx Incentive Program includes scoring the percentage of “meaningful users” of certified EHR technology, and the percentage of those professionals that meet the criteria for the E-Rx incentive, as measures that are part of the quality performance standard, which would be subject to the same points scale and 30% or 30th percentile minimum attainment level.
      • To receive incentive payments under the EHR incentive or E-Rx programs (or to avoid payment adjustments), EPs will be required to meet all the requirements of the respective EHR and E-Rx programs.
      • As a SSP requirement separate from the quality measures reporting discussed previously, at least 50% of an ACO’s primary care physicians must be determined to be “meaningful EHR users.”
      • In future years, there will be greater alignment between the SSP and the EHR Incentive Program.
      • CMS seeks comment on whether there should be a percentage-based requirement for hospitals meeting meaningful use—should 50% of hospitals in an ACO be required to meet meaningful use?  What if there is only one eligible hospital in an ACO?
      • CMS also invites comment on the proposal to incorporate the PQRS requirements and payments and certain metrics….


  • Public Reporting
    • The following information regarding an ACO’s operation and performance would be accessible to the public:
  1. Providers and suppliers participating in the ACO;
  2. Parties sharing in the governance of the ACO;
  3. Quality performance standard scores; and
  4. General information on how an ACO shares savings with its members.
  • The following information about the ACO would be publically reported:
    • Name and location
    • Primary contact
    • Organizational information including
      • ACO participants
      • Identification of ACO participants in joint ventures between ACO professionals and hospitals;
      • Identification of the ACO participant representatives on its governing body; and
      • Associated committees and committee leadership
      • Shared savings information including
        • Shared savings performance payment received by ACOs or shared losses payable to us; and
        • Total proportion of shared savings invested in infrastructure, redesigned care processes and other resources required to support the 3-part aim goals of better health for populations, better care for individuals and lower growth expenditures, including the proportion distributed among ACO participants.
        • Quality performance standard scores—each ACO would be responsible for making this information available to the public in a standardized format (TBD by CMS).  This requirement would be included in each ACO’s 3-year agreement.
        • CMS seeks comments on the proposals including whether the proposed list includes elements that should not be required, or excludes elements that should be required and whether CMS should standardize the format or allow ACOs the flexibility to try different and innovative approaches for providing this information to beneficiaries.  Comments are also welcome on the proposed and new reporting requirements.  Also, should ACOs themselves be required to make this information publicly available or if the information should be reported to CMS, who would then make it publicly available.


  • Aligning ACO Quality Measures with other Laws and Regulations (pp 227-229):  CMS is seeking comment from affected parties on the best and most appropriate way to align quality domains, categories, specific measures, and rewards across Federal healthcare programs to ensure the highest possible quality of care.  CMS also seeks comments on whether quality standards in different ACA programs should use the dame definition of domains, categories, specific measures, and rewards for performance across all programs to the greatest extent possible, taking into account meaningful differences in affected parties.

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