Pioneer a Cos

8/2/2019 Pioneer a Cos

1/43

DRAFT/CONFIDENTIAL

PIONEERACCOUNTABLECAREORGANIZATION

BENEFICIARYALIGNMENT

AND

FINANCIAL

RECONCILIATION

SPECIFICATIONS

(Version5.3)

July14,2011

Preparedfor:

HoangmaiPham

CentersforMedicare&MedicaidServices

InnovationCenter

Preparedby:

HenryBachofer

GregoryPope

John

Kautter

CordonNewhart

RTIInternational


2/43

PioneerACOBeneficiaryAlignmentandFinancialReconciliationSpecifications 2

July14,2011 DRAFT/CONFIDENTIAL Ver.5.3

Contents

1.0 Specificationsummary...................................................................................................................... 3

2.0 ACOalignment.................................................................................................................................. 4

2.1 ProspectiveACOalignmenteligiblepopulation........................................................................... 4

2.2 ACOalignedpopulation................................................................................................................ 5

2.2.1 InitialAlignment.................................................................................................................... 6

2.2.2 RealignmentandAttestation................................................................................................ 8

2.3 Nationalreferencepopulation...................................................................................................... 9

2.4 Baselinedecedentpopulation.................................................................................................... 10

3.0 Savingscalculation.......................................................................................................................... 11

3.1 Minimumsavings/lossthreshold................................................................................................ 12

3.2 Maximumsavings/loss................................................................................................................ 12

4.0 Performanceperiodexpenditure................................................................................................... 13

4.1 Averageexpenditureperbeneficiary(unweighted,uncapped,unannualized)......................... 13

4.2 Annualizedexpenditures............................................................................................................ 14

4.3 Capped,annualizedexpenditures............................................................................................... 15

4.4 Weighted,capped,annualizedexpenditures............................................................................. 16

5.0 Baselineexpenditure...................................................................................................................... 185.1 Baseyearexpenditure................................................................................................................ 19

5.1.1 Annualizedbaseyearexpenditure..................................................................................... 19

5.1.2 Capped,annualizedbaseyearexpenditure........................................................................ 20

5.2 Trendingofbaseyearexpenditurestocommonbaseyear(BY3).............................................. 21

5.3 3yearweightedaveragetrended,capped,annualizedexpenditureforabeneficiary.............22

5.4 Newlyeligibleandotheralignedbeneficiarieswithout12eligiblebaseperiodmonths...........23

5.5 Baselineexpendituresfordecedents......................................................................................... 28

5.6 3yearbaselineexpenditure....................................................................................................... 28

6.0 Benchmarkcalculation.................................................................................................................... 30

6.1 Nationalreferencepopulationcohort........................................................................................ 30

6.2

Reference

population

expenditure

.............................................................................................

31

6.3 Adjustmentforbeneficiaryentitlementcategory,age,andsex................................................ 32

6.3.1 Performanceperiodagesexadjustedreferenceexpenditure.......................................... 33

6.3.2 Baselineagesexadjustedreferenceexpenditure............................................................. 33

7.0 Populationbasedpayments........................................................................................................... 35

8.0 Tables.............................................................................................................................................. 36

Table81 Evaluationandmanagementservicecodesincludedinbeneficiaryalignmentcriteria.......36

Table82Specialtycodesforprimarycarephysicians........................................................................... 38

Table83Specialtycodesforspecialistphysicians................................................................................. 39

Table84. Variablesusedintotalbeneficiaryexpenditurecalculations............................................... 40

Table85. ScheduleforPioneerACObeneficiaryalignmentandbaselineexpenses (performance

years1through3)................................................................................................................................... 41

Table8.6AgeandSexCategoriesbyEntitlementCategory................................................................... 43


3/43



1.0 SpecificationsummaryThisspecificationprovidesadetailedspecificationofthemethodsthatwillbeusedtoidentifyor

calculate:

TheACOalignedpopulation; Thereferencepopulation; Baselineexpenditures; Theexpenditurebenchmark;and, Performanceperiodexpenditures.Thisspecificationdoesnotaddressthedevelopmentofthequalityperformancescoreoritsuseinthe

calculationofsharedsavings(orloss)amounts.

ThesespecificationsarebasedontheRequestforApplicationsthatwaspublishedMay17,2011.They

mayberevisedsubsequenttothepublicationofthefinalrulesfortheMedicareSharedSavingsProgram

orinresponsetocommentsandfurtheranalysisconductedduringthereviewofapplicationsand

negotiationofagreementswithsuccessfulapplicants. Theyareintendedtoprovideamoredetailedand

specificstatementofthemethodsthatareexpectedtobeincludedinthoseagreementstoaid

applicantsintheirevaluationofthePioneermodel.


4/43



2.0 ACOalignmentTheACOalignedpopulationandthenationalreferencepopulationonwhichthetrendfactorsusedto

developthebenchmarkwillbebasedwillbothbedrawnfromtheACOalignmenteligiblepopulation.

TheACOalignedpopulationwillincludethoseACOalignmenteligiblebeneficiarieswhomeetthe

requirementsforalignmentwithanACO.

BoththeACOalignedandnationalreferencepopulationswillbeidentifiedonaprospectivebasisprior

tothestartofaperformanceperiod. Finalfinancialsettlementforaperformanceyearwillbebasedon

theclaimsexperienceofthoseprospectivelyalignedbeneficiariesthatcontinuedtomeettheACO

alignmentrequirementsduringtheperformanceperiod.

2.1 ProspectiveACOalignment-eligiblepopulationTheprospectivealignmenteligiblepopulationwillbeidentifiedusingeligibilityandclaimsdatafora36

monthalignmentperiodthatwillbespecifictoeachperformanceyearasshowninTable21.Table21

alsoshowsthebaselineperiodsthatwillbeusedduringthefirstthreePioneerperformanceyears.1 The

alignmentperiodisupdatedforeachnewperformanceyear,butthebaselineperiodremainsthesame

untilthePioneerACOis"rebased"after3performanceyears(notshowninTable21).

Table21.AlignmentandbaselineperiodsforPioneerACOsfor2012through2014performanceyears

Period

PerformanceYears

CY2012 CY2013 CY2014

Alignment 7/1/20086/30/2009

7/1/20096/30/2010

7/1/20106/30/2011

7/1/20096/30/2010

7/1/20106/30/2011

7/1/20116/30/2012

7/1/20106/30/2011

7/1/20116/30/20127/1/20126/30/2013

Baseline CY2009

CY2010

CY2011

CY2009

CY2010

CY2011

CY2009

CY2010

CY2011Theclaimsexperienceforthespecifiedperiodwillbetrendedforwardtothirdbaseyear,e.g.,claimsincurredduringcalendar

year2009willbetrendedforwardtobecomparabletoclaimsincurredduringcalendaryear2011byapplyingthegrowthin

expendituresforthereferencepopulation.

Source: CMSPioneerACORFA.

Tobeeligibleforprospectivealignment,abeneficiarymustbeeligibleforalignmentinthethird(latest)

alignmentyear. Thatis,abeneficiarymusthave12monthsoffeeforservice(FFS)coverageunder

MedicarePartAandMedicarePartBandmeettheotherrequirementsforalignmenteligibilityinthethirdalignmentyear.

1Thetermperformanceyeargenerallyreferstoacalendaryear.ThePioneerACORequestforApplications

indicatedthatthefirstperformanceyearcouldbelongerthan12months. However,thisspecificationassumes

thatthefirstperformanceyearforPioneerACOswillbeginJanuary1,2012,andwillbeacalendaryear.


5/43



Abeneficiarysclaimsexperienceforanalignmentyearwillbeusedinprospectivealignment

calculationsandincludedintheprospectivebaselineexpenditureestimateifthebeneficiary:

has12monthsofcoverageunderbothMedicarePartAandPartBduringthealignmentyear; hasnomonthsofcoverageinwhichMedicarewasthesecondarypayerduringthealignmentyear;

has

no

months

of

coverage

under

a

Medicare

managed

care

plan

during

the

alignment

year;

wasaU.S.residentduringthealignmentyear;and, receivedatleastoneoftheE&MserviceslistedinTable81duringthealignmentyear.Theserequirementsmeanthatabeneficiarywhodiesduringanalignmentyearisnoteligiblefor

prospectivealignmentwithanACO. Theidentificationofbaselinedecedentsisdiscussedinsections2.4,

andtheinclusionofdecedentexpendituresinthebaselineisdiscussedinsection5.5.

Thealignmenteligibilityrequirementsalsomeanthatabeneficiarywillnotbeeligibleforprospective

alignmentifthebeneficiaryfirstbecomescoveredbyMedicareinthethirdalignmentyearorifthe

beneficiarywascoveredbyaMedicaremanagedcareplaninthethirdalignmentyear. Abeneficiarywill

becomeeligibleforprospectivealignmentintheyearaftersheorhehasaccumulatedatleast12

monthsofFFSexperience. Thisrequirementmeans,further,thatexpendituresbyabeneficiaryduring

theirfirstmonthsofMedicarecoveragewillnotbeincludedinbaselineexpenditures.Again,thisis

appropriateasexpendituresduringaperformanceyearwillnotincludeexpendituresduringthefirst

monthsofMedicarecoverage.

ThefinalACOalignedandreferencepopulationsforaperformanceperiodthatwillbeincludedin

financialreconciliationwillbedetermined3monthsaftertheendofeachperformanceperiod. A

beneficiarythatisincludedintheprospectivealignmentatthestartoftheperformanceperiodmayfail

tomeetrequirementsforalignmentduringtheperformanceperiod. (Forexample,abeneficiarymay

joinaMedicareAdvantageplan.) Prospectivealignmentwillidentifyallbeneficiariesthatmaybe

alignedwiththeACOduringtheperformanceperiod. Finalalignmentwillsimplyremoveany

prospectivelyalignedbeneficiarywhodoesnotmeetthealignmenteligibilityrequirementsduringtheperformanceyear.

2.2 ACO-alignedpopulationPioneerACOswillbeaccountableforthecostandqualityoutcomesoftheiralignedbeneficiariesateach

endofperiodreconciliation.ThePioneerACOpaymentmodelmayincludeeitherprospectiveor

retrospectivealignment. TheACOalignedpopulationdescribedinthisspecificationsreportisconsistent

withprospectivealignment.APioneerACOmayinsteadchooseretrospectivealignment.The

retrospectivealignmentprocessesoftheMedicareSharedSavingsProgram(MSSP)willbeused,with

changes

as

necessary

to

reflect

differences

in

related

design

criteria

between

the

Pioneer

and

MSSP

paymentmodels.

Foragivenperformanceperiod,thepopulationofMedicarebeneficiariesforwhomaPioneerACOis

accountablewillbeidentifiedasthosebeneficiariesthattheACOhasprovidedapluralityofeligible

evaluationandmanagement(E&M)servicesinthepriorthreeyears(alignmentperiod),withthemore

recentyearsweightedmoreheavily(60%,30%,10%).Thatis,theallowedchargesforE&Mservices

incurredinalignmentyear3willbeweightedbyafactorof0.6,thosefromalignmentyear2by0.3,and


6/43



thosefromalignmentyear1by0.1.ThebeneficiarywillbealignedwiththeACOifitprovidedthe

pluralityofE&Mservicestothebeneficiaryduringthethreealignmentyears.

Atalltimes,Medicarebeneficiarieswillremainfreetoselecttheprovidersandservicesoftheirchoice.

ThePioneerACOpaymentmodeldoesnotincludeanyrestrictionsonorchangestoMedicarefeefor

servicebenefits,nordoesitincludeprovisionsforbeneficiariestooptoutofalignmentwithanACOfor

purposesofexpenditurecalculationsandqualityperformancemeasurement.Anyfuturepossible

provisionsforbeneficiariestooptoutofexpenditurecalculationsandqualitymeasurementwillmirror

thoseinthefinalregulationsfortheMSSP.

2.2.1 InitialAlignmentForeachperformanceyear,thefollowingstepswilldeterminethePioneerACOprospectivealignment

usinginformationfromthe3yearalignmentperiod(the3alignmentyearsimmediatelypriortothe

performanceperiod). Attheendoftheperformanceyear,prospectivelyalignedbeneficiarieswhodid

notmeetthecriteriaforalignmentduringtheperformanceyearwillbeidentifiedandeliminatedfrom

financialreconciliationcalculations. Becauseoftheseadditional,latersteps,somebeneficiarieswhoare

initiallyalignedwillnotbeincludedinfinancialreconciliationfortheperformanceperiod.

TobeprospectivelyalignedtoanACO,abeneficiarymustmeeteachofthefollowinggeneralcriteria:

1) Musthave12months2ofMedicarePartAandBenrollmentinthelastyearofthealignmentperiod.

2) MustnothaveanymonthsofMedicareAdvantage(MA)enrollmentorMedicareSecondaryPayer(MSP)statusinthelastyearofthealignmentperiod.

3) MustbeaUSresidentinthelastyearofthealignmentperiod.4) Mustbealiveonthelastdayofthealignmentperiod.5) Musthaveapluralityofeligibleevaluationandmanagement(E&M)servicesattheACOduringthealignmentperiod(seedetailsbelow).

Criteria14guaranteethatthereiscompleteandrecentdatatodeterminewhethertheACOhas

historicallyprovidedthepluralityofE&Mservicestothebeneficiary. Thesecriteriaprospectively

identifythebeneficiarieswhowillbeincludedinthereferencepopulation. Criterion5identifiesthe

cohortofbeneficiariesthattheACOisaccountablefor. Criterion5identifiesthosemembersofthe

prospectivelyidentifiedreferencepopulationthatarealignedwiththeACO. TheACOhassomecontrol

overthehealthcareofbeneficiariesthatitprovidesthepluralityofE&Mservicesto,andthushassome

abilitytocoordinatetheircare.

Thedetailedstepsforinitialalignmentareasfollows:

Step1) IdentifyallbillingTaxIdentificationNumbers(TINs)usedbyprovidersaffiliatedwitheachACO.3

2Asusedinthisdocumentmonthandmonthofeligibilitymeansanycalendarmonthinwhichabeneficiary

mettheeligibilityrequirementsforACOalignmentonatleastoneday.3TheACOmaybeitsownlegalentityandhaveitsownTIN,butinthecaseofanACOthatisnotitselfaMedicare

provider,theACOTINwouldnotappearontheclaim.


7/43



Step2) IdentifybillingTINsfromStep1inwhichtheACOonlyreportsasubsetoftheirproviders.For

thesebillingTINs,identifytheappropriateNationalProviderIdentifiers(NPIs).4

Step3) IdentifyallPartBcarrier(physician/supplier)claimslineitemsforqualifyingE&Mservicesthat

wereprovidedduringthethreeyearalignmentperiod(atanyprovider,notjustACOaffiliated

providers). ThequalifyingE&MservicesrefertotheE&Mservicecodes(seeTable81insection8)of

primarycareandselectspecialistphysiciansfromTables82and83insection8.Allowedchargeswill

beusedasameasureofservicesprovided.

Step4) IdentifyallMedicarebeneficiaryHealthInsuranceClaimNumbers(HICNs)5ofbeneficiarieswith

aqualifyingE&MservicefromStep3.

Step5) Usingallowedcharges,determinethepercentageofqualifyingE&Mservicesthatare

providedbyprimarycarephysicians(seeTable82forlistofspecialtycodes). Forbeneficiarieswhere

thispercentageislessthan10%,skipStep6andalignusingStep7.

Step6) Aligneachbeneficiarytoaprovider(ACOornonACOTIN)basedonthepluralityofprimarycare

servicesandothercriteria.

DetailsonStep6 Identifytheprovider(ACOornonACOTIN)thatprovidesthepluralityofthe

beneficiarysprimarycarequalifiedE&Mservices,6asmeasuredbyallowedcharges,andflagthe

beneficiaryasbeingalignedtothisprovider. Todothis,calculateaprimarycareservicesalignment

ratioforeachprovider. Thealignmentratioforprimarycareservicesisdefinedtobetheproportionof

totalqualifyingE&Mservicesbilledbyaproviders(ACOornonACOTIN)primarycarephysicians(see

Table2forlistofspecialtycodes).Foreachprovider,sumthebeneficiariesallowedchargesoverthe3

yearalignmentperiod,usingweightsof60%/30%/10%,withtheearliestyearweightedleast. Toobtain

theprimarycareservicesalignmentratio,dividetheweightedsumofallowedchargesforagiven

providerbythetotalweightedsumofallowedchargesatallproviders. Alignthebeneficiarytothe

provider

who

has

the

highest

primary

care

services

alignment

ratio.

In

the

case

of

a

tie

align

the

beneficiary totheproviderwhoperformedthemostrecentprimarycareE&Mservice. Intheeventofa

furthertie,proceedtoStep8.

Step7)Forbeneficiaries whoreceivelessthan10%oftheirqualifyingE&Mservicesfromprimarycare

physicians(seeStep5),alignthebeneficiaryusingservicesprovidedbyspecialistphysicians.

DetailsonStep7 Identifytheprovider(ACOornonACOTIN)thatprovidesthepluralityofthe

beneficiarysspecialist(seeTable83insection8)E&Mservices,asmeasuredbyallowedcharges,and

flagthebeneficiaryasbeingalignedtothisprovider.Todothis,calculateaspecialtycareservices

alignmentratioforeachprovider. Thealignmentratioforspecialtycareservicesisdefinedtobethe

proportionoftotalqualifyingE&Mservicesbilledbyaproviders(ACOornonACOTIN)specialist

physicians(selectspecialtiesfromTable83). Foreachprovider,sumthebeneficiariesallowedcharges

overthe3yearalignmentperiod,usingweightsof60%/30%/10%,withthemostdistantyearweighted

4MultipleNPIsmaybillthrougheachTIN. E&MserviceswiththeACOspecifiedTIN/NPIcombinationswillbe

identifiedandusedforalignment.5AnalternativeMedicarebeneficiaryidentifier,theBeneficiaryLinkKey,mightbeusedinplaceoftheHICN.

6TotalqualifyingE&MservicesreferstoqualifyingE&MservicesprovidedbyALLproviders(TINs). ForStep6,

consideronlyE&Mservices(lineitems)withprimarycarespecialtycodes.


8/43



least. Toobtainthespecialtycareservicesalignmentratio,dividetheweightedsumofallowedcharges

foragivenproviderbythetotalweightedsumofallowedchargesatallproviders. Alignthebeneficiary

totheproviderwhohasthehighestspecialtycareservicesalignmentratio. Intheeventofatie,align

thebeneficiarytotheproviderwhoperformedthemostrecentspecialtycareE&Mservice. Intheevent

ofafurthertie,proceedtoStep8.

Step8)Tiebreakrule: ForbeneficiariesnotalignedinSteps6or7duetoties,performbeneficiary

alignmentusingALLPartBcarrier(physician/supplier)claimsforqualifyingE&Mvisits.

DetailsonStep8 Usingallowedcharges,alignthebeneficiarytotheprovider(ACOornonACOTIN)

whoprovidesthepluralityofabeneficiary'sPartBcarrier(physician/supplier)services,usingaPartB

servicesalignmentratioand60%/30%/10%weightinginasimilarfashiontotheprevioustwosteps. In

theeventofatie,alignthebeneficiarytotheproviderwhoperformedthemostrecentPartBservice.

Step9)Dropbeneficiariesfrominitialalignmentiftheydidnotmeetoneormoreofthefollowinginthe

lastyearofthealignmentperiod:a)12monthsofMedicarePartAandBenrollment;b)nomonthsof

MAenrollmentorMSPstatus,c)USresident.

Step10)Dropbeneficiariesfrominitialalignmentiftheywerenotaliveonthefirstdayofthe

performanceyear.

NotesonStep10 DateofdeathcanberecordedintheMedicareenrollmentfilemonthsaftera

beneficiaryhasdied. ThemostrecentMedicareenrollmentfilewillbeusedtoidentifydeathsthathave

beenrecordedbythetimeinitialalignmentisconducted. MorerecentMedicareenrollmentfileswillbe

availableforperformanceperiodrealignmentandadditionalbeneficiarieswhodiedduringthe

alignmentperiodmaybedroppedfromfinancialreconciliation.

2.2.2 RealignmentandAttestationACOsthatselectprospectivealignmentwillbeaccountableforthecostandqualityoutcomesofalltheir

prospectivelyalignedbeneficiariesateachendofperiodreconciliation,withcertainexceptions.

BeneficiariesinitiallyalignedtoanACOwillbeconsiderednolongerbeingintheACOsdesignated

patientpopulationforpurposesofperformancemeasurementandexpenditurecalculationsifthey

satisfyoneormoreofthefollowingconditionsintheperformanceyear:

1) HaszeromonthsofPartAandBenrollment.2) HasatleastonemonthofPartAonlyenrollmentorPartBonlyenrollmentorMAenrollmentor

MSPstatus.

3) IsanonUSresident.4) TransfersMedicareaddresstoaCoreBasedStatisticalArea(CBSA)orruralcountythatdoesnot

overlapwithorisnotadjacenttotheACOslocation(wherethemajorityofitscliniciansare

located).


9/43



5) Receivesmorethan50%oftheirE&Mallowedchargesinnonoverlapping,nonadjacentCBSAsorruralcountiesduringtheperformanceperiod.

Inaddition,asnotedpreviously,ifmorerecentMedicareenrollmentfiles,thanwereavailableduring

theinitialalignmentprocess,showsthatthebeneficiarydiedduringthealignmentperiod,theywillno

longerbealignedtotheACO.

Finally,beneficiarieswhonewlyenrollinMedicareorwhodisenrollfromanMAplanmayalsobe

alignedwithACOsthroughanaffirmativeattestationonbehalfofthebeneficiarythataspecificACOis

hisorherprimaryprovider.ThesebeneficiarieswillbeincludedinthefinancialcalculationsfortheACO

inthefirstperformanceyearaftertheyhaveaccrued12monthsoffeeforserviceexperience.

Beneficiarieswhoalreadyhave12ormoremonthsoffeeforserviceexperiencemayattestatanytime,

butwillnotbeincludedintheACOsexpenditurecalculationsuntilthesubsequentperformanceperiod.

Forexample,a65yearoldwhoenrollsinMedicarebeforeJuly1ofthefirstperformanceperiodwillbe

eligibleforalignmentandexpenditurecalculationsatthebeginningofthethirdperformanceperiod.

Theintentofproceduresforbeneficiaryattestationistoallowpatientsandproviderstoalignbasedon

mutuallyacknowledgedcarerelationshipsratherthanclaimsbasedalgorithms.However,attestationisnotintendedtoresultinACOsselectingsometypesofbeneficiariesmorethanothersforinclusionin

theirexpenditurebaselineandbenchmark,andthisprovisionmayberevisedifprogrammonitoring

revealsdifferencesbetweenattestingpatientsandthosepatientstreatedbytheACOwhodonotattest.

2.3 NationalreferencepopulationThefactorsthatwillbeusedtocalculatetheACOspecificexpenditurebenchmarkasdiscussedin

section6willbecalculatedfromtheexpendituresofthenationalreferencepopulationofallACO

alignmenteligiblebeneficiaries. JustastheACOalignedpopulationisspecifictoaperformanceyear,

thereferencepopulationwillberedefinedforeachnewperformanceyear.

Theprospectivelyidentifiedalignmenteligiblepopulationwillbeusedtocalculatethepreliminary

baselineexpenditureforthereferencepopulation.

Thefinalreferencepopulationthatisusedinfinancialreconciliationwillconsistofallprospectively

identifiedalignmenteligiblebeneficiariesthatalsomeettherequirementsforalignmenteligibilityinthe

performanceperiod.Specifically,thefinalreferencepopulationwillconsistofanyprospectively

identifiedalignmenteligiblebeneficiarywho:

(a) WascoveredunderMedicarepartsAandpartBinthefirstmonthoftheperformanceyear;(b) HadnomonthsofPartAonlyorPartBonlycoverageduringtheperformanceyear;(c) HadnomonthsofenrollmentinaMedicareprivatehealthplanduringtheperformanceyear;(d) HadnomonthscoverageduringtheperformanceyearduringwhichMedicarewasthe

secondarypayer;and,

(e) WasnotaU.S.residentduringtheperformanceyear.Thenationalreferencepopulationwillalsoinclude,forpurposesofdevelopingbaselinereference

expenditures,baselinedecedentsasdefinedinsection2.4.


10/43



2.4 BaselinedecedentpopulationAsnotedinsection2.1,theprospectivealignmenteligiblepopulationdoesnotincludedecedents.To

makesurethatbaselineexpendituresforthereferencepopulationaswellastheACOaligned

populationreflectsexpendituresincurredbydecedents,baselinedecedentswillbeidentifiedforeach

performanceyear.

DecedentbeneficiarieswillbeeligibleforalignmentwithanACOduringaperformanceyearifthe

beneficiary:

wascoveredunderbothMedicarePartAandPartBduringthefirstmonthofan3rdalignmentyear; had12monthsofMedicarePartAonlyorPartBonlycoverageduringthe2ndalignmentyears; hadnomonthsofcoverageinwhichMedicarewasthesecondarypayerduringthe2ndor3rd

alignmentyears;

hadnomonthsofcoverageunderaMedicaremanagedcareplanduringthe2ndor3rdalignmentyears;

wasaU.S.residentduringthe2ndand3rdalignmentyears;and, receivedatleastoneoftheE&MserviceslistedinTable81duringthe2ndalignmentyear.DecedentbeneficiarieswillbealignedwithanACOusingthesamemethodsdescribedinsection2.2but

usingdataforonlythe1stand2ndalignmentyears.

Thedecedentpopulationwillbeidentifiedusingdataforthe36monthperiodfromJuly1,2008through

June30,2010. Thealignmentofbeneficiarieswhodiedduringthatperiodwillbebasedonthe

providersaffiliatedwiththeACOforeachperformanceyear.


11/43



3.0 SavingscalculationThegrosssavingsachievedbyanACOinaperformanceyearisthedifferencebetweentheobserved

expendituresincurredbythebeneficiariesalignedwiththeACOintheperformanceyearandthe

expenditurebenchmarkfortheACOspopulation.

(Formula3.1)where

=savings(peralignedbeneficiary)fortheperformanceyear =benchmarkfortheperformanceyear =expenditureofalignedpopulationintheperformanceyear

TheamountofthegrosssavingsthatisavailabletotheACO(beforeapplicationofqualityincentive

adjustments)isgivenby:

(Formula3.2)where

=amountofsavings(loss)paidto(recoveredfrom)theACOintheperformanceyear

=grosssavings(loss)bornebyACOintheperformanceyear =percentageofgrosssavings(loss)bornebyACOintheperformanceyear =adjustmentforqualityperformancescoreintheperformanceyear

ThePioneerRFAspecifiesarangeforthefractionofgrosssavings(loss)tobebornebytheACO.The

rangeisdeterminedbytheperformanceyear:

InPY1,between50%and70%ofsavings(loss)isbornebytheACO InPY2,between60%and75%ofsavings(loss)isbornebytheACO InPY3,between70%and75%ofsavings(loss)isbornebytheACO

Thefractionofgrosssavings(loss)bornebytheACOwillbeadjustedbytheACOsqualityperformance

score. Thespecificmethodsusedtoadjustthegrosssavingsfractionforqualityperformancewillbe

definedfollowingpublicationofthefinalrulefortheMedicareSharedSavingsProgram,asnotedinthe

PioneerRFA.


12/43



3.1 Minimumsavings/lossthresholdIftheamountofgrosssavings(loss)islessthan1%ofthebenchmark,nosavings(loss)willbepaidto

(recoveredfrom)theACO.

3.2 Maximumsavings/lossThePioneerRFAspecifiesarangeforthemaximumsavings(loss)thatwillbepaidto(recoveredfrom)

theACO. Themaximumsavings(loss)isspecifiedasapercentageofthebenchmarkanddeterminedby

theperformanceyear:

InPY1,themaximumsavings(loss)paidtoorrecoveredfromtheACOis5%to15% InPY2,themaximumsavings(loss)paidtoorrecoveredfromtheACOis10%to15% InPY3,themaximumsavings(loss)paidtoorrecoveredfromtheACOis15%

Thedevelopmentoftheexpenditureinaperformanceperiodisdescribedinsection4,thebenchmark

fortheperformanceperiodinsection5,andthebaselineexpenditurefortheperformanceperiodin

section6.


13/43



4.0 PerformanceperiodexpenditureTheexpenditure(peralignedbeneficiary)inaperformanceperiodisthesumofallMedicarepayments

onclaims:

(a) forservicescoveredbyPartAorPartBofMedicare;(b) thatareincurred(i.e.,withadateofservice)duringtheperformanceperiod;and,(c) thatarepaid(andconsideredtobethefinalaction)notmorethan3monthsafterthelastday

oftheperformanceperiod.

exceptthat:

(d) Medicareinpatientpassthroughpaymentamounts(estimates)oninpatientclaimswillbeexcludedfromexpenditures.7

Thedateofserviceforeachtypeofcoveredserviceisasfollows:

Inpatienthospitalclaim:thedischargedateorlastdayofcoverageforaninpatienthospitalstay; SNFclaim:thelastdayofaSNFstaythatiscoveredbyMedicarePartA; HHAclaim:thethroughdateofaclaimforHHAservices; Outpatienthospitalclaim:thedateofservicefortheclaimlineitem; Physicianorotherproviderclaim:the"throughdate"fortheclaimlineitem(HCPCSprocedure); DMEorothersupplierclaim:thedateofservicefortheclaimlineitem(HCPCSitem/service); Hospiceclaim:theclaimthroughdate.

ThespecificrequirementsfortheinclusionofclaimsaregiveninTable84insection8.

4.1 Averageexpenditureperbeneficiary(unweighted,uncapped,unannualized)Thebasicstatementoftheaverageexpenditureperbeneficiaryinaperformanceperiodisgivenby:

, (Formula4.1)

where

istheaverageexpenditureperbeneficiaryinthePY

denotes

the

sum

over

all

beneficiaries

(i)

in

the

ACO

aligned

population

in

the

PY

, =totalincurredclaimsofalignedbeneficiaryiinthePY7Thepassthroughamountssuchasdirectmedicaleducationandbaddebtareultimatelyreconciledandpaid

basedonhospitals'MedicareCostReports. TheamountsonclaimsareestimatesbyMedicareclaimsprocessing

contractorsandcanbeunreliable.


14/43



=numberofbeneficiariesalignedwiththeACOinthePYNotallbeneficiariesinaperformanceperiodwillhave12monthsofexposure(i.e.,coverageunder

MedicarePartsAandB).Themostimportantgroupofbeneficiarieswithfewerthan12monthsof

experience

will

be

decedents.

Asaresult,formula4.1mustbemodifiedforuseincalculatingperformanceperiodexpendituresand

savings.Thesemodificationsinvolvethreesteps:

Annualizationtocorrectforabeneficiarywithfewerthan12monthsofexposure; Applicationofthecaponannual(orannualized)expenditures;and, Reweightingtocalculatetheaverageannualizedexpenditureperbeneficiarylifeyear(orperson

year).

Thesethreestepsarediscussedinsections4.2through4.4.Comparableadjustmentsmustalsobemade

tothebaselineexpendituresoftheACOalignedbeneficiariesandtoboththebaselineandperformance

periodexpendituresofthereferencepopulation.

4.2 AnnualizedexpendituresToadjustfortheeffectofhavingfewerthan12monthsexperience,theexpendituresincurredduring

theperformanceperiodwillbeannualized. Theannualizedexpendituresincurredbyabeneficiary

duringperformanceyear1isgivenby:

, ,, (Formula4.2), , (Formula4.2a)

where

, =annualizedexpenditureofalignedbeneficiaryiinPY, =totalincurredclaimsofalignedbeneficiaryiinPY

, =numberofalignmenteligiblelifeyearsofexperienceofbeneficiaryiinPY

, =numberofalignmenteligiblemonthsofexperienceofbeneficiaryiinPYNote,further,thattheannualizedexpenditureofbeneficiaryiisequaltotheaveragemonthly

expenditureofthebeneficiarymultipliedby12.


15/43



4.3 Capped,annualizedexpendituresACOsmayelecttocaptheexpendituresincurredbyanindividualbeneficiarytoreducetheimpactof

beneficiarieswhoincurextraordinaryclaimsontheaverageperformanceyearexpenditureoftheACO

alignedpopulation.8Differentreferencepopulationtrendfactorswillbecalculatedandusedforthose

ACOsthatelecttocapandforthosethatelectnottocapannualizedexpenditures. ForACOsthatelect

tocapannualizedexpenditures,theannualizedcappedexpenditureisgivenby:

, , , ,, , , (Formula4.3)where

, =isthecapped,annualizedexpenditureofbeneficiaryiinPY

,

=

is

the

annualized

expenditure

of

beneficiary

i

in

PY

(from

formula

4.2)

, =thecaponannualexpendituresapplicabletobeneficiaryiinPYForalignedbeneficiariesentitledbyageordisability,thecap,willbetheunweighted99thpercentileoftheannualizedexpendituredistributionintheageddisablednationalreferencepopulation

foreachperformanceyear.

ForalignedESRDbeneficiariesthecap,developedfromthenationalreferencepopulationforeachperformanceyearwillbe:

1) theweightedmean,annualizeduncappedexpendituresofESRDbeneficiaries;plus2) thedifferenceof(a)theageddisabledcapand(b)theweightedmean,annualized,expendituresof

ageddisabledbeneficiaries.

ThecapforbeneficiariesclassifiedashavingESRDinsomebutnotallmonthsduringtheperformance

yearwillbeaweightedaverageoftheESRDandageddisabledcapsaccordingtotheproportionofthe

eligiblemonthsineachstatus. Theweightedaveragecapforsuchabeneficiaryisgivenby:

, ,,,,,,,,,, (Formula4.4)where

, =thecaponannualexpendituresapplicabletobeneficiaryiinPY8Theelectiontocap,ornottocap,annualizedexpenditureswillapplytobothbaselineandperformanceyear

expenditures. Thatis,ifanACOelectsnottocapannualizedexpendituresboththeaveragebaselineand

performanceyearexpenditureswillbecalculatedonanuncappedbasis.IfanACOelectstocapannualized

expendituresboththeaveragebaselineandperformanceyearexpenditureswillbecalculatedonacappedbasis.


16/43



, =thecaponannualexpendituresforagedanddisabledbeneficiariesinPY, =thecaponannualexpendituresforESRDbeneficiariesinPY

,, =numberofalignmenteligiblemonthsofESRDfreeexperienceofbeneficiaryiinPY

,,=numberofalignmenteligiblemonthsofexperiencewithESRDofbeneficiaryiinPY

4.4 Weighted,capped,annualizedexpendituresAbeneficiarywithfewerthan12monthsexposureintheperformanceyearshouldnotbecounted

equallywithbeneficiarieswithafull12monthsofexposurebecausethebeneficiarydoesnotincur

claimsineverymonthoftheperformanceyear.Theannualized,cappedexpenditurewillbeweighted

basedonthenumberofexposuremonthsofthebeneficiaryintheperformanceperiod. Theweighted,

capped,annualizedexpenditureisgivenby:

=meanofcapped,annualizedexpendituresweightedbylifeyears , ,

, (Formula4.5)

where

istheaverageweighted,capped,annualizedexpenditureperbeneficiaryinPY1

, =cappedannualizedexpendituresofbeneficiaryiinPY1, =numberoflifeyearsofexperienceincurredbyalignedbeneficiaryiinPY meanssumoverallbeneficiaries(i)intheACOalignedpopulationinPY.

Ignoringtheeffectofcapping,theaverageweightedannualizedexpenditure( )equalstheaverageexpenditureperalignmenteligiblemonthmultipliedby12. Thiscanbeseenbyreplacing

,

with

, inFormula4.5(becauseweareignoringtheeffectofcapping)andsubstitutingthedefinitionof, fromFormula4.2:

,,,

,

(Formula4.5a)


17/43



Simplifying,formula4.5acanberewrittenassimplytheaverageexpenditureofACOaligned

beneficiariesperlifeyear:

, ,

(Formula4.5b)

Substitutingthedefinitionof,fromFormula4.2a:

,

,

(Formula4.5c)

12 ,

, (Formula4.5d)

where

istheaverageweighted,capped,annualizedexpenditureperbeneficiaryinPY1, =cappedannualizedexpendituresofbeneficiaryiinPY1, =totalincurredclaimsofalignedbeneficiaryiinPY, =numberoflifeyearsofexperienceincurredbyalignedbeneficiaryiinPY, =numberofalignmenteligiblemonthsofexperienceofbeneficiaryiinPY

meanssumoverallbeneficiaries(i)intheACOalignedpopulationinPY.Inotherwords,settingasidetheeffectofcapping,theaverageweightedannualizedexpenditureper

beneficiaryisequaltotheaveragemonthlyexpenditureofACOalignedbeneficiariesmultipliedby12.


18/43



5.0 BaselineexpenditureBecausetheACOalignedpopulationchangesfromoneperformanceyeartothenext,baseline

expendituresarespecifictoaperformanceyear,andwillberecalculatedforeachperformanceyear. A

preliminarybaselineexpenditurewillbecalculatednearthebeginningoftheACO's3yearagreement

period,usingtheprospectivelyalignedPY1population. Thefinalbaselineexpenditurewillnotbe

calculateduntiltheACO'sfinallyalignedpopulationforaperformanceyearisavailable,whichwillbe

aftertheconclusionoftheperformanceyear. SeeTable85forasummaryofthesequencingof

alignment,baseline,andperformanceyearcalculationsduringperformanceyears1through3.

ThebaselineexpenditureforanACOisbasedontheexpendituresincurredbytheACOaligned

populationovera3yearbaselineperiod. Inthissection,wedenotethe3yearsofthebaselineperiod

byBY1(calendaryear2009),BY2(calendaryear2010),andBY3(calendaryear2011),whereBY3isthe

mostrecent(latest)baselineyear.

TwodifferenttypesofACOalignedbeneficiariescontributetothebaselineexpenditure:(1)established

beneficiarieswhohadatleastafullyearoffeeforservicecoverageunderPartsAandBofMedicare

duringthebaselineperiod;and(2)newlyeligiblebeneficiarieswhohadlessthanafullyearoffeefor

servicecoverageunderPartsAandBduringthebaselineperiod.Thissecondtypeofbeneficiary

includesnewMedicareprogramenrollees,andbeneficiariesdisenrollingfromaprivateMedicarehealth

plan.

Thesameproceduresapplytothecalculationofbaselineexpendituresforthepopulationalignedwith

anACOandforthereferencepopulationofallalignmenteligiblebeneficiaries.

Thedevelopmentofthebaselineexpenditureinvolves9steps.Thefirstsixofthesestepsinvolvethe

calculationofthebaselineforbeneficiarieswhowereeligibleforestablishedbeneficiaries.

1. CalculatethetotalMedicarePartAandPartBclaimsincurredbytheACOaligned(oralignmenteligible)beneficiaryineachofthethreebaseyearsincludedinthebaselineperiod.

2. CalculatethetotalmonthsineachofthethreebaseyearsduringwhichtheACOaligned(oralignmenteligible)beneficiarywaseligibleforalignment.

3. CalculatetheannualizedexpenditureforeachACOaligned(oralignmenteligible)beneficiaryforeachofthethreebaseyearsincludedinthealignmentperiod

4. Calculatethecapped,annualizedexpenditureforeachACOalignedbeneficiary(oralignmenteligible)foreachofthethreeyearsincludedinthebaselineperiod.9

5. Trendthecapped,annualizedexpenditureforeachACOaligned(oralignmenteligible)beneficiaryforeachbaseyeartoacommonbaseyear,specificallytobaseyear3.

6. Calculatethe3yearweightedaverageofthetrended,capped,annualizedbaselineexpenditureforeachACOaligned(oralignmenteligible)beneficiary.Thisisthe3yearweightedaverage

expenditurebaselinefortheACOaligned(oralignmenteligible)beneficiary.

Thelasttwostepsinvolvethecalculationofthebaselinefornewlyeligiblebeneficiaries.

9ThisstepappliesonlyiftheACOelectstousecappedexpendituresinthesavingscalculations.


19/43



7. Calculatethe3yeartrended,capped,annualizedbaselineexpenditureforeachnewlyeligibleACOalignedbeneficiary.

8. Calculatethe3yeartrended,capped,annualizedbaselineexpenditureforACOaligneddecedentsasdefinedinsection2.4.

9. Calculatetheweightedaverageofthe3yearweightedaverageexpenditurebaselineforallACOalignedbeneficiaries,includingbothallprospectivelyelignedbeneficiaries(fromstep6),

newlyeligiblebeneficiaries(fromstep7),anddecedents(fromstep8).Thisisthebaselinethat

willbeusedinthecalculationofthebenchmarkforaperformanceyear.

InSection5.1wedescribethedevelopmentofabeneficiarysbaselineexpenditureforeachofthethree

baselineyears.

InSection5.2wedescribethetrendingofexpenditurefromBY1andBY2toBY3.

Insection5.3wedescribethecalculationofthe3yearbaselineexpenditureforeachACOaligned

beneficiaryasaweightedaverageofthebeneficiariescapped,annualizedexpendituresineachofthe3

baselineyears.

InSection5.4,wedescribethecalculationofthe3yearbaselineexpenditureforthe"newlyeligible"

beneficiarieswhodonothave12eligiblemonthsinBY3.

InSection5.5,wedescribethecalculationofthe3yearbaselineexpenditurefor"decedents".

InSection5.6,wedescribethecalculationofthe3yearweightedaverageexpenditurebaselineforall

ACOalignmenteligiblebeneficiaries.

5.1 BaseyearexpenditureThebaselineexpenditureforabeneficiaryisdevelopedfromtheexpenditureincurredbyabeneficiary

ineachofthethreeyearsthatcomprisethebaselineperiod(2009through2011).Themethodsusedto

calculatethebeneficiarysexpenditureforeachofthesethreeyearsarethesameasthoseusedto

developtheperformanceperiodexpenditurethataredescribedinsection4,withoneexception. The

beneficiarysexpenditureforeachbaseyearisnotweightedbythebeneficiarysmonthsofalignment

eligibilityuntilthethreeyearsarecombinedintoasinglebaselineexpenditureamount.

5.1.1 AnnualizedbaseyearexpenditureTheannualizedexpenditureincurredbyabeneficiaryineachofthethreebaseyearsadjuststheamount

oftheclaimsincurredduringeachyearforthemonthsofACOalignmenteligibilityduringthatyear. The

annualizedbaseyearexpenditureforbaseyear1isgivenby:

, ,, (Formula5.1), , (Formula5.1a)


20/43



, ,, 12 (Formula5.1b)where

, =annualizedexpenditureofalignedbeneficiaryiinBY1, =totalincurredclaimsofalignedbeneficiaryiinBY1, =numberofalignmenteligiblelifeyearsofexperienceofbeneficiaryiinBY1, =numberofalignmenteligiblemonthsofexperienceofbeneficiaryiinBY1

TheformulasforBY2andBY3arethesameasformulas6.1through6.1bexceptthatby2andby3are

substituted,respectively,forby1.

Asdiscussedabove,theannualizedexpenditureisanestimateoftheclaimsthatwouldhavebeen

incurredbythebeneficiarywithfewerthan12monthsofeligibilityifthebeneficiaryhadincurredclaims

for12monthsatthesamerateasinmonthsofeligibility.Thatis,abeneficiarywhoincurredclaimsata

rateof$6,000duringeachofhersixmonthsofeligibilitywould,ifthatrateofspendinghadcontinued

for12months,haveincurredclaimsof$72,000duringthecalendaryear.

5.1.2 Capped,annualizedbaseyearexpenditureThedevelopmentofthecappedannualizedexpenditureforabeneficiaryineachbaseyearusesthe

samemethodsandformulasdiscussedinsection4inconnectionwithperformanceperiodexpenditures.

Thebasicformulaforthecapped,annualizedexpenditureisgivenbyformula4.3.

Thecapped,annualizedexpenditureofabeneficiaryisthelesseroftwoamounts:(a)theannualized

expendituresincurredbythebeneficiaryduringmonthsofACOalignmenteligibilityineachbaseyear;

and(b)themaximumannualizedexpenditureineachofthebaseyears:

, , , ,, , , (Formula5.2a)

, , , ,, , , (Formula5.2b), , , ,, , , (Formula5.2c)where


21/43



, =capped,annualizedexpenditureofbeneficiaryiinBY1

,

=annualizedexpenditureofbeneficiaryiinBY1(fromformula4.1)

, =caponannualexpendituresapplicabletobeneficiaryiinBY1ThedefinitionofthetermsforBY2andBY3arethesameexceptthatby2andby3aresubstituted,

respectively,forby1.

Asdiscussedinsection4.3,thecap(, ,, ,or,)thatwillbeappliedtoannualexpenditureswilldependonwhetherthebeneficiaryhasESRD. Thecapthatisappliedtoagedanddisabled

beneficiarieswithoutESRDwillbeequaltotheunweighted99thpercentileoftheannualized

expendituredistributionfortheageddisablednationalreferencepopulationforthespecifiedbaseyear.

For

aligned

ESRD

beneficiaries

the

cap

developed

from

the

national

reference

population

for

the

specifiedbaseyearwillbethemean,annualizeduncappedexpendituresofESRDbeneficiariesplusthe

differencebetweentheageddisabledcapandtheunweightedmean,annualized,expendituresofaged

disabledbeneficiaries.

ThecapforbeneficiariesclassifiedashavingESRDinsomebutnotallmonthsduringtheperformance

yearwillbeaweightedaverageofthecapsforESRDandageddisabledbeneficiarieswheretheweight

appliedistheproportionoftheeligiblemonthsineachstatus.Seesection4.3foradetailed

specification.

5.2 Trendingofbaseyearexpenditurestocommonbaseyear(BY3)Thecapped,annualizedexpenditureforeachofthefirstandsecondyearsofthebaselineperiodwillbe

trendedforwardtothethird(last)yearofthebaselineperiodbyapplyingtrendfactorsderivedfromthe

nationalreferencepopulation.

Toderivethesetrendfactors,thenationalreferencepopulationwillbedefinedtoincludebeneficiaries

aliveattheendofBY3with12eligiblemonthsinBY3.

Thetrendfactorthatisappliedtothebeneficiaries'capped,annualizedexpenditurewillbespecificto

theentitlement/age/sexcategorytowhichthebeneficiarybelongs. Eachalignedandreference

beneficiarywillbeassignedtoherorhisentitlement/age/sexcellbasedonBY3(2011)entitlement

status,ageandsex.

, , ,, (Formula5.3a), , ,, (Formula5.3b)


22/43



, , (Formula5.3c)where

, =capped,annualizedexpenditureofbeneficiaryiinBY1(2009)trendedtoBY3(2011), =capped,annualizedexpenditureofbeneficiaryiinBY2(2010)trendedtoBY3(2011), =capped,annualizedexpenditureofbeneficiaryiinBY3(2011), =averagecapped,annualizedexpenditureofreferencepopulationinthe

entitlement/age/sexcategorytowhichbeneficiaryibelongs()inBY1(2009), =averagecapped,annualizedexpenditureofreferencepopulationinthe

entitlement/age/sexcategorytowhichbeneficiaryibelongs(

)inBY2(2010)

, =averagecapped,annualizedexpenditureofreferencepopulationintheentitlement/age/sexcategorytowhichbeneficiaryibelongs()inBY3(2011)

, =capped,annualizedexpenditureofbeneficiaryiinBY1(2009), =capped,annualizedexpenditureofbeneficiaryiinBY2(2010), =capped,annualizedexpenditureofbeneficiaryiinBY3(2011)

5.3 3-yearweightedaveragetrended,capped,annualizedexpenditureforabeneficiaryThetrended,capped,annualizedexpendituresforeachofthethreebaseyearswillbecombinedtogive

thebaselineexpenditureforeachACOalignedbeneficiary. Thebeneficiarysexpenditureforeachbase

yearwillbeweightedbythenumberofmonthsofACOeligibilityinthatyearandtheweightassignedto

thatyearbytheACObaselinepolicy(i.e.,60%oftheeligibilitymonthsinthe3rdbaselineyear,30%of

theeligibilitymonthsinthe2ndbaselineyear,and10%oftheeligibilitymonthsinthe3rdbaselineyear.

, ,, ,, ,, (Formula5.4)

, ,.,.,.,. (Formula5.4a), ,.,.,.,. (Formula5.4b)


23/43



, ,.,.,.,. (Formula5.4c)where

, =3yearaveragebaselineofbeneficiaryiexpenditurestrendedtoBY3(2011), =capped,annualizedexpenditureofbeneficiaryiinBY1(2009)trendedtoBY3(2011), =capped,annualizedexpenditureofbeneficiaryiinBY2(2010)trendedtoBY3(2011), =capped,annualizedexpenditureofbeneficiaryiinBY3(2011), =weightedcontributionofBY1(2009)expenditureofbeneficiaryitothe3yearbaseline

ofbeneficiaryi

, =weightedcontributionofBY2(2010)expenditureofbeneficiaryitothe3yearbaselineofbeneficiaryi

, =weightedcontributionofBY3(2011)expenditureofbeneficiaryitothe3yearbaselineofbeneficiaryi

, =alignmenteligiblemonthsofbeneficiaryiinBY1(2009), =alignmenteligiblemonthsofbeneficiaryiinBY2(2010), =alignmenteligiblemonthsofbeneficiaryiinBY3(2011)

5.4 Newlyeligibleandotheralignedbeneficiarieswithout12eligiblebaseperiodmonthsInthefirstperformanceperiodallbeneficiarieswillhave12monthsofexperienceinthe3rdbaseline

year(i.e.,2010)becausethisisarequirementforalignment.Therewill,therefore,benoneedforspecial

provisionstocalculateandincludeintheACObaselineanamountthatrepresentstheexperienceof

newlyeligiblebeneficiaries. Howeverinthesecondandthirdperformanceyears,specialprovisionwill

bemadetoincludeabaselineexpenditureamountfornewlyeligiblebeneficiaries. Thissectionfocuses

oncalculatingbaselineexpendituresfor"newlyeligiblebeneficiaries",bywhichwemeannewMedicare

programenrolleeswhoenrollinMedicareafterthefirstmonthofthe3rdbaselineyear. Similarissues

arisefordisenrolleesfromMedicareprivatehealthplansorotherbeneficiarieswhomaybeeligiblefor

ACOalignmentinperformanceyears2and3,butwhodonothave12eligiblemonthsofexpenditure

datainthe3baselineyears. Themethodsdescribedinthissectionwillbeusedtocalculatebaseline


24/43



expendituresforallalignedbeneficiarieswithout12monthsofeligibleexperienceinthe3baseperiod

years.10

Inperformanceyear1(2012),thealignmentperiodisthesubstantiallythesameasthebaselineperiod.

Asaresult,beneficiarieswith12monthsofexperienceinthe3rdyearofthealignmentperiod(ending

June2011),whichisarequirementforalignment,willalsohave6monthsofexperienceinthe3rdyear

ofthebaselineperiod. Manyofthesebeneficiarieswillalsohaveeligibleexperienceinthe1stand2nd

yearsofthebaselineperiod(endingin2009and2010,respectively). Claimsincurredduring2009

through2011willbeusedtodevelopthebaselineexpenditureforthesebeneficiariesusingthemethod

specifiedintheprevioussection.

Inperformanceyear2(2013),thealignmentperioddiffersfromthebaselineperiod. Thealignment

periodcoversthethree12monthperiodsendinginJune2010,2011,and2012. Abeneficiarywith12

monthsexperienceinthethirdalignmentyear(ending2012),willnotnecessarilyhave12months(or

anymonths)ofeligibleexperienceinthe3yearbaselineperiod20092011. Similarlyinperformance

year3(2014),alignmenteligiblebeneficiarieswillnotnecessarilyhave12,orany,eligiblemonthsof

experienceinthebaselineperiod. BeneficiarieswhowereinenrolledinaMedicareprivatehealthcare

planduringsomeorallofthebaselineperiodmaybeeligibleforalignmentinperformanceyears2and3,yetalsomaynothave12eligiblemonthsinthebaselineperiod. Baselineexpendituresforthese

typesofbeneficiarieswillbecalculatedusingthemethodsdescribedinthissection.

Inthecaseofthesenewlyeligibleorotherbeneficiarieswithout12eligiblemonthsintheoriginal3year

baselineperiod(CY2009throughCY2011),their3yearbaselineperiodwillbedefinedasthe3year

alignmentperiodfortheperformanceyear. Further,the3baseyearswillbeweightedasfollows:

The3rdyearofthealignmentperiodwillbetreatedasifitwerethe1styearofthebaselineperiod,andwillbeweighted10%.

The2ndyearofthealignmentperiodwillbetreatedasifitwerethe2ndyearofthebaselineperiod,andwillbeweighted30%.

The1styearofthealignmentperiodwillbetreatedasifitwerethe3rdyearofthebaselineperiod,andwillbeweighted60%.

Forperformanceyear2,thebaselineyearswillbe:

Baseyear1(2012),whichwillbeweighted10%. Baseyear2(2011),whichwillbeweighted30%. Baseyear3(2010),whichwillbeweighted60%.Forperformanceyear3,thebaselineyearswillbe:

Baseyear1(2013),whichwillbeweighted10%. Baseyear2(2012),whichwillbeweighted30%. Baseyear3(2011),whichwillbeweighted60%.

10Baselineexpendituresforallbeneficiarieswithatleast12eligiblemonthsinthe3yearbaselineperiod2008

2010willbecalculatedfrombaselineperiodexpenditures,accordingtothemethodsdescribedearlierinSection5.


25/43



Fornewlyeligiblebeneficiarieswithoutexperienceinthebaselineperiod,theolderbaselineyearswill

morecloselyrepresentspatternsofutilizationandexpenditureintheoriginal3rdbaseperiodyear

2011,whichisthefundamentalbaseyearusedinthePioneerACObenchmarkcalculation.

Consequently,itisappropriatetogivegreaterweighttotheyearsthatareclosertotheoriginalbaseline

period. Allalignedbeneficiarieswithout12eligiblemonthsintheoriginalbaselineperiod20092011

areguaranteedtohaveatleast12eligiblemonthsintheredefinedbaselineperiodbecauseallaligned

beneficiariesmusthave12eligiblemonthsinthe3rdyearofthealignmentperiod.

Afurtherstipulationisthatthebaselineperiodforabeneficiarywillbedeterminedbytheyearinwhich

thebeneficiaryfirstbecomeseligibleforACOalignment. Thismeansthatthebaselineexpenditurefora

beneficiary,oncecalculated,willnotbechanged(recalculated). Ifabeneficiaryqualifiesforalignment

inPY1andherorhisbaselineexpendituresarecalculated,thosesamebaselineexpenditureswillbe

usedforPY2andPY3. Similarly,baselineexpenditurescalculatedfornewlyalignedbeneficiariesinPY2

willbeusedforPY3. InPY3,baselineexpenditureswillonlybecalculatedforbeneficiariesnewlyaligned

inPY3,whosebaselineexpenditureswerenotcalculatedforPY1orPY2.

Becausetheclaimsexperienceofnewlyeligiblebeneficiariesmaybefromayearthatislaterthanthe

3rdbaselineperiodyear(2010),theseexpendituresmustberolledbacktothe3rdbaselineyearbyapplyingtrendfactorsderivedfromthenationalreferencepopulation. Forperformanceyear2:

, , ,, (Formula5.6a), , ,, (Formula5.6b), , (Formula5.6c)where, =capped,annualizedexpenditureofnewlyeligiblebeneficiaryiinalignmentyear3

(2012)11trendedtoBY3(2011)

, =capped,annualizedexpenditureofnewlyeligiblebeneficiaryiinalignmentyear2(2011)trendedtoBY3(2011)

, =capped,annualizedexpenditureofnewlyalignedbeneficiaryiinalignmentyear1

(2010)

, =averagecapped,annualizedexpenditureofnewlyeligiblereferencepopulationintheage/sexcategorytowhichnewlyeligiblebeneficiaryibelongs()inalignmentyear3(2012)

11ForbeneficiarieswhofirstbecomeenrolledinMedicareafter2010,theeligibilitymonthsandexpenditure

duringBY3will,ofcourse,bezero.


26/43



, =averagecapped,annualizedexpenditureofnewlyeligiblereferencepopulationintheage/sexcategorytowhichnewlyeligiblebeneficiaryibelongs()inalignmentyear2(2011)

, =averagecapped,annualizedexpenditureofreferencepopulationintheage/sex

category

to

which

beneficiary

i

belongs

()

in

BY3

(2011)

, =capped,annualizedexpenditureofnewlyeligiblebeneficiaryiinalignmentyear3(2012)



Theavailableyearsofexperiencewouldbecombinedusingthesamemethodofweightingthe

individualbaseyearexpenditures:

, ,, ,, ,, (Formula5.7), ,.,.,.,. (Formula5.7a)

, ,.,.,.,.

(Formula

5.7b)

, ,.,.,.,. (Formula5.7c)where

, =3yearaveragebaselineofnewlyeligiblebeneficiaryiexpenditurestrendedtoBY3(2010)

, =capped,annualizedexpenditureofnewlyeligiblebeneficiaryiinalignmentyear3(2012)trendedtoBY3(2010), =capped,annualizedexpenditureofnewlyeligiblebeneficiaryiinalignmentyear2(2011)trendedtoBY3(2010)



27/43



, =weightedcontributionofalignmentyear3(2012)expenditureofnewlyeligiblebeneficiaryitothe3yearbaselineofbeneficiaryi

, =weightedcontributionofalignmentyear2(2011)expenditureofnewlyeligiblebeneficiaryitothe3yearbaselineofbeneficiaryi

, =weightedcontributionofalignmentyear1(2010)expenditureofnewlyeligiblebeneficiaryitothe3yearbaselineofbeneficiaryi, =alignmenteligiblemonthsofnewlyeligiblebeneficiaryiinalignmentyear3(2012), =alignmenteligiblemonthsofnewlyeligiblebeneficiaryiinalignmentyear2(2011), =alignmenteligiblemonthsofnewlyeligiblebeneficiaryiinalignmentyear1(2010)

Usingthesemethods,abaselineexpenditureisobtainedforeveryalignedbeneficiarywithlessthan12

eligible

months

in

the

original

baseline

period

(2009

2011).

These

baseline

expenditures

are

included

in

theunweightedaveragebaselineexpendituresacrossallalignedbeneficiaries,toobtainoverallACO

baselineexpenditures,asgivenbyFormula6.5.

Anexamplemaymakethisclearer.AssumeabeneficiarybecameeligibleforMedicareinOctober2011

andwascontinuouslyACOeligiblethroughDecember2012. Thebeneficiarythereforehas:

12monthsofACOalignmenteligibilityin2012 3monthsofACOalignmenteligibilityin2011 0monthsofACOalignmenteligibilityin2010andearlier

Thebeneficiaryhas,intotal15monthsofACOalignmenteligibility. Onaweightedeligibilitybasis,the

annualweightsforeachyearare:

10%ofthe12monthsofexperiencein2012,normalizedbythetotal2.1weightedeligiblemonths,whichequalsa2012weightof1.2/2.1=57%.

30%ofthe3monthsofexperiencein2011,normalizedbythetotal2.1weightedeligiblemonths,whichequalsa2011weightof0.9/2.1=43%

60%ofthe0monthsofexperiencein2010,whichequalsa2010weightof0.Ifthebeneficiaryscapped,annualizedexpenditure(aftertrendingtothe3rdbaselineyear(2010))are

$2,400in2011and$3,100in2012.ThebeneficiaryincurrednoMedicareexpendituresin2010. The

weighted3yearaveragebaselineexpenditureforthebeneficiarywouldbe:

For2012(treatedasthe1st yearofthebaseline):$3,100x(1.2/2.1)=$1,771.43 For2011(treatedasthe2ndyearofthebaseline):$2,400x(0.9/2.1)=$1,028.57 For2010(treatedasthe3rdyearofthebaseline):$0x0.0weightedmonths=$0

Summingtheseamountsgivesabaselineexpenditureof$2,800forthisbeneficiary.


28/43



5.5 BaselineexpendituresfordecedentsThebaselineexpenditureofdecedentswillbecalculatedusingthemethodsdescribedinsections5.1,

5.2and5.3. Thebaselinedecedentexpenditurewillbecalculatedonceforthebeneficiariesidentifiedin

section2.4,i.e.,beneficiarieswhodiedduringthe36monthalignmentperiodforperformanceperiod1.

Thebaselineexpenditureforeachofthesebeneficiarieswillbeincludedinthecalculationofbaseline

expendituresforeachperformanceyear.

5.6 3-yearbaselineexpenditureThebaselineexpenditureforanACO'sperformanceyearistheweightedaverageofthebaseline

expendituresofthebeneficiariesalignedtotheACOintheperformanceyearwherethebeneficiary

levelexpendituresareweightedbytheweightedlifeyear. TheACO'sbaselineexpenditurecanbe

written:

,, , (Formula5.8)where

=theACO's3yearbaselineexpenditureforaperformanceyear denotesthesumoverallbeneficiaries(i)intheACOalignedpopulationforthe

performanceyear

, =3yearbaselineexpenditureofbeneficiaryiexpressedinannualized,BY3dollars

, =3yearweightedaveragelifeyearsofbeneficiaryi =numberofbeneficiariesalignedwiththeACOintheperformanceyear.The3yearweightedaveragelifeyears,usedinFormula6.8isgivenby:

, ,.,.,. (Formula5.9)where

, =3yearweightedaveragelifeyearsofbeneficiaryi, =alignmenteligiblemonthsofbeneficiaryiinBY1, =alignmenteligiblemonthsofbeneficiaryiinBY2


29/43



, =alignmenteligiblemonthsofbeneficiaryiinBY3The3yearbaselinerepresentsthetotalexpenditurethatwasincurredbyallalignedbeneficiariesover

the3baselineyears. However,eachbaselineyeardoesnotcontributeequallytoanaligned

beneficiary'sbaselineexpendituresfortworeasons:

The60%/30%/10%baselineyearsweightinggiveslessweighttoabaseyearthatismoredistant(intime)fromtheperformanceyear.Thisweighting,ineffect,assumesthatthemoretimethathas

elapsedsinceabaseyearandtheperformanceyearthelesspredictiveexpendituresinthatbase

yearwillbeofperformanceyearexpenditure.

Somebeneficiarieswillhavelessexperiencetocontributetothetotalexpenditureofthealignedpopulationoverthethreebaseyears. Somebeneficiarieswillhavebeenalignmenteligibleforonly

oneortwoyears,whileotherbeneficiaries(specificallydecedents)willhavefewerthan12months

ofexperienceinabaselineyear. Becausetheperformanceyearexpenditure(calculatedas

describedinsection4)representsanexpenditureperpersonyear,andbecauseanaligned

beneficiarywithfewerthan12monthsofexperienceintheperformanceyearcontributeslessto

theaverageexpenditureperpersonyearintheperformanceyearthanabeneficiarywith12months

ofexperience,itisappropriatetoweightbaselineexpendituresfortheamountofexperience

contributedbyeachbeneficiary.


30/43



6.0 BenchmarkcalculationThePioneerACORFAspecifiesthattheexpenditurebenchmarkwillbeequaltotheACOsbaselineper

capitaexpenditureincreasedbyanamountequalto50%ofthenationalpercapitapercentagegrowth

rateappliedtotheACOs3yearbaselineexpenditureplus50%ofthedollarchangeinthenationalper

capitaexpenditure.

Thisformulaforcalculatingthebenchmarkcanbewritten:

0.5 0. 5 (Formula6.1)

(Formula6.1a)

where

=percapitabenchmarkforPY =3yearbaselinepercapitaexpenditureofalignedpopulationexpressedinBY3dollars =percapitaexpenditureofreferencepopulationinPY =percapitaexpenditureofreferencepopulationfor3yearbaseperiod =dollarchangeinpercapitaexpenditureofreferencepopulationfromtoPY.

Thisbasicformulacanberestatedas:

(Formula6.1b)StatedinEnglish:thebenchmarkisthebaselineplusthereferencepopulationgrowthratemultipliedby

thesimpleaverageofthebaselineACOexpenditureandthebaselinereferencepopulationexpenditure.

Thisrestatementshowsthat,effectively,thePioneerbenchmarkisadjustingtheACOspecificbaseline

expendituresupwardsordownwardshalfwaytowardthenationalaveragebaseline,andthenapplying

thenationalpercentagegrowthrate.

6.1 NationalreferencepopulationcohortThebasiceligibilityrequirementsforthenationalreferencepopulationarediscussedinSection2.3. The

nationalreferencepopulationincludesallalignmenteligiblebeneficiaries,whetherornottheyare


31/43



actuallyalignedtoanyspecificACO. Thenationalreferencepopulationincludesbothbeneficiaries

alignedtoACOsandbeneficiariesnotalignedtoanyACO. Thenationalreferencepopulationexcludes

beneficiariesnotresidingintheUnitedStates.

Thedollarandpercentagechangeinnationalreferencepopulationexpenditureswillbecalculatedfor

theprospectivelyidentifiedcohortofbeneficiarieswhoareACOalignmenteligibleforeach

performanceyear. Moreexplicitly:

ThereferencecohortforPY1willconsistofbeneficiarieswhowerealignmenteligibleinalignmentyear1forPY1(July2008throughJune2011).



Aprospectivelydefinedreferencepopulationcohortwillbedefinedforeachperformanceyear,justas

anACO'salignedpopulationwillberedefinedforeachperformanceyear.

Analignmenteligiblebeneficiarywouldcontributetotheexpenditurebaselineofthereference

populationandtothebaselineofanACOwithwhichsheorheisalignedonlyinthosebaseyearsin

whichsheorhewasalignmenteligible.

6.2 ReferencepopulationexpenditureTheexpenditure(perACOeligiblebeneficiary)inaperformanceperiodisthesumofallMedicare

paymentsonclaimsassociatedwithanACOalignmenteligiblebeneficary:

(a) forservicescoveredbyPartAorPartBofMedicare;(b) thatareincurred(i.e.,withadateofservice)duringtheperformanceperiod;and,(c) thatarepaid(andconsideredtobethefinalaction)notmorethan3monthsafterthelastday

oftheperformanceperiod,

exceptthat:

(d) Medicareinpatientpassthroughpaymentamounts(estimates)oninpatientclaimswillbeexcludedfromexpenditures.12

AlignmentwithanACOisnotarequirementforthereferencepopulation.Thatis,thereference

expenditurewillbebasedonallclaimsincurredbyanyACOalignmenteligiblebeneficiarywhetheror

notthebeneficiaryisalignedwithanACO.

ThedatesofserviceforeachtypeofcoveredservicearethesameasfortheACOalignedpopulation:

Inpatienthospitalclaim:thedischargedateorlastdayofcoverageforaninpatienthospitalstay; SNFclaim:thelastdayofaSNFstaythatiscoveredbyMedicarePartA;

12Thepassthroughamountssuchasdirectmedicaleducationandbaddebtareultimatelyreconciledandpaid

basedonhospitals'MedicareCostReports. TheamountsonclaimsareestimatesbyMedicareclaimsprocessing

contractorsandcanbeunreliable.


32/43



HHAclaim:thethroughdateofaclaimforHHAservices; Outpatienthospitalclaim:thedateofservicefortheclaimlineitem; Physicianorotherproviderclaim:thedateofservicefortheclaimlineitem(HCPCSprocedure); DMEorothersupplierclaim:thedateofservicefortheclaimlineitem(HCPCSitem/service); Hospiceclaim:claimthroughdate.

Referencepopulationexpenditureswillbecalculatedusingthesamemethodsthatareusedtocalculate

ACOalignedbeneficiaryexpenditures.AsdescribedinSection4,expenditureswillbeannualizedand

capped,andmeanexpenditureswillbeweightedbybeneficiaries'eligibilityfraction. Expendituresfor

thereferencepopulationcohortwillbecalculatedinthebaselineyear(2011)andintheperformance

year.

Thebaselineexpenditureforthereferencepopulationwillalsoincludetheexpendituresforthebaseline

decedentpopulation(seesection2.4)inthesamewaythatthebaselineexpenditureoftheACOaligned

populationwillincludeexpendituresofalignedbaselinedecedents(seesection5.5).

6.3 Adjustmentforbeneficiaryentitlementcategory,age,andsexThereferencepopulation'sexpendituresforthebaselineandperformanceperiodwillbeadjustedto

reflectthecompositionoftheACOsalignedpopulation. Forpurposesofthisadjustment,beneficiaries

willbegroupedintoage/sexcategorieswithinthreeentitlementcategories:

(1) BeneficiariesoriginallyentitledtoMedicarecoverageonthebasisofagewhodonothaveESRDwillbegroupedintonotmorethan16age/sexcategories;

(2) BeneficiariesoriginallyentitledtoMedicarecoverageonthebasisofdisabilitywhodonothaveESRDwillbegroupedintonotmorethan20age/sexcategories;

(3) BeneficiarieshavingESRD,regardlessoftheoriginalbasisofentitlement,willbegroupedintonotmorethan14age/sexcategories.

Theanticipatedage/sexcategoriesforeachoftheseeligibilitycategoriesaregiveninTable8.6.The

specificcategoriesmayberedefinedbasedonfurtheranalysis.

Asdescribedinthissection,adjustmentforthecompositionoftheACOsalignedpopulationwillbe

accomplishedbymultiplyingthereferencepopulationmeanexpenditureineachentitlement/age/sex

cellbytheACO'sproportionofalignedbeneficiarypersonyearsineachentitlement/age/sexcell. For

thebenchmarkcalculation,thereferencepopulation'sabsoluteandpercentageexpenditurechanges

fromthebaselinetotheperformanceperiodwillbebasedontheentitlement/age/sexadjusted

referencepopulationexpenditures.13

13TakinganaverageoftheabsoluteexpenditurechangesinthenationalreferencecohortweightedbytheACO's

alignedbeneficiaryagesexproportionsgivesthesameresultasthemethoddescribedinthissection. However,

takingaweightedaverageofnationalpercentagechangesgivesadifferent,incorrectanswer. Thisisbecausethe

overallpercentagechangeisaffectedbythebaselineexpenditurelevelsoftheagesexcells,notjusttheir

percentagechanges. Themethoddescribedinthissectiongivesthecorrectresultforbothabsoluteand

percentageagesexadjustedchanges.


33/43



Foraperformanceyear,boththeACOalignedpopulationandthenationalreferencepopulationare

cohortsthatconsistofthesameindividualsinthebaselineperiodandintheperformanceyear. Thus,

theACOagesexproportionsdonotvarybybaselineorperformanceperiod. Forconvenience,we

definetheageandsexofmembersoftheACOalignedandreferencepopulationsasbaselinevalues(in

thelastyearofthebaselineperiod).

6.3.1 Performanceperiodage-sex-adjustedreferenceexpenditureTheagesexadjustedreferenceexpenditureforaperformanceperiodisgivenby:


=ACOadjustedweighted,capped,annualizedreferenceexpenditureinthePY

meanssumoverallentitlement/age/sexcategoriesa, =NumberofACOalignedbeneficiarypersonyearsinentitlement/age/sexcategory(a)

forthebaselineperiod

, =theaverageweighted,capped,annualizedexpenditureofthereferencepopulationinentitlement/age/sexcategory(a)forthePY

6.3.2 Baselineage-sex-adjustedreferenceexpenditureTheaverageACOadjustedreferenceexpenditureinthebaselineperiodisgivenby:


=age/sexadjustedweighted,capped,annualizedreferenceexpenditureinPY

means

sum

over

all

age/sex

categories

a

, =NumberofACOalignedbeneficiarypersonyearsinage/sexcategory(a)forthebaselineperiod

, =theaverageweighted,capped,annualizedexpenditureofthereferencepopulationinage/sexcategory(a)forperformanceperiod1


34/43




35/43



7.0 Population-basedpaymentsIfanACOgeneratesaminimumaverageannualsavings(definedbelow)overperiods1and2,theACOs

paymentwilltransitiontopopulationbasedpaymentinperiod3.Populationbasedpaymentisaper

beneficiarypermonthpaymentamountintendedtoreplaceasignificantportionoftheACOsFFS

paymentwithaprospectivepayment.IftheACOdoesnotgeneratetheminimumaverageamountof

savingsoverperiods1and2,theACOwillnottransitiontopopulation basedpaymentinperiod3.

Instead,theperiod3arrangementwillreverttotheperiod1arrangementandtheACOsAgreementwill

concludeattheendofthreeyears.

Theminimumaverageannualsavingsamountwillbenogreaterthan5%(forACOsinstateswiththe

lowesthistoricalMedicareexpenditurelevels)andnolessthan1%(forACOsinstateswiththehighest

historicalMedicareexpenditurelevels),andwillvaryinverselywiththerelativeMedicareexpenditure

levelinthestatewheretheACOislocated.ForACOslocatedinmorethanonestate,CMSwillsetthe

minimumaverageannualsavingsamountbasedonthestatewherethepluralityoftheACOsaligned

beneficiariesreside.

CMSwillmakeaprovisionaldeterminationofwhetheranACOqualifiesforpopulation basedpayment

attheendofthesecondperformanceperiod.Paymentforthethirdperformanceperiodwillbegin

basedonthisprovisionalassessment,andwillthenbeadjusted,ifnecessary,basedonCMSfinal

assessmentafterthreemonthsofclaimsrunout.

TheACOsprovidersandsupplierswillreceivefeeforservicepaymentsat50%offeeforservice

paymentratesonsubmittedclaimsforservicesdeliveredtoalignedbeneficiaries.CMSwillprovidea

monthlypopulationbasedpaymentthatwillequaltheremainderoftheACOsprojectedFFSrevenue

foritsalignedMedicarepatientsasaperbeneficiarypermonthpayment(PBPM)."ProjectedFFS

revenue"isdefinedastheACO'sbenchmarkexpendituresfortheperformanceyear,thecalculationof

whichisdescribedinSection5. Uponendofperiodreconciliation,theACOwillstillreceiveupto70%sharedsavingsandlosses,subjecttoqualityperformanceadjustments. Endofperiodreconciliationis

describedinSection3.

TheACOwillhavetheoptionforperiod4ofthesamepaymentarrangementsasPeriod3,exceptthat

theACOsexpenditurebaselinewillberesettoreflectaverageMedicarespendingforitsaligned

beneficiariesinyears2011,2012,and2013. ForPeriod5,theACOwillhavetheoptionofcontinuingthe

Period4paymentarrangements,withoutadditionalresettingoftheexpenditurebaseline. Finally,ifthe

ACOchooses"OptionB"asdefinedintheCMSPioneerACORFA,theACOwillreceivepopulationbased

paymentsinperiod3(and,optionally,inperiods4and5)andendofperiodreconciliationwitha75%

sharingrateforsharedsavingsandsharedlosses,withamaximumsavings/lossof15%ofthe

benchmark.


36/43



8.0 TablesTable8-1

Evaluationandmanagementservicecodesincludedinbeneficiaryalignmentcriteria

OfficeorOtherOutpatientServices

99201NewPatient,brief

99202NewPatient,limited

99203NewPatient,moderate

99204NewPatient,comprehensive

99205NewPatient,extensive

99211EstablishedPatient,brief

99212EstablishedPatient,limited

99213EstablishedPatient,moderate

99214EstablishedPatient,comprehensive

99215EstablishedPatient,extensive

InitialNursingFacilityCare

99304NeworEstablishedPatient,brief

99305NeworEstablishedPatient,moderate

99306NeworEstablishedPatient,comprehensive

SubsequentNursingFacilityCare


99308NeworEstablishedPatient,limited


99310NeworEstablishedPatient,extensive

NursingFacilityDischargeServices



OtherNursingFacilityServices

99318NeworEstablishedPatient

Domiciliary,RestHome,orCustodialCareServices






37/43








Domiciliary,RestHome,orHomeCarePlanOversightServices

99339,brief

99340,comprehensive

HomeServices










WellnessVisits

G0402WelcometoMedicarevisit

G0438Annualwellnessvisit

G0439Annualwellnessvisit

SOURCE:ListofE&MCodesfromtheMedicareSharedSavingsProgram[MSSP]. ThePioneerRFAstates

thatforeligibilityrequirements,theintentistohavethePioneerModelbeconsistentwiththeproposed

regulationsoftheMSSP.


38/43



Table8-2

Specialtycodesforprimarycarephysicians

Code Specialty

1 generalpractice

8 familypractice

11 internalmedicine

38 geriatricmedicine

50 nursepractitioner

97 physicianassistant

SOURCE:MSSPproposedregulations. ThePioneerRFAstatesthattheprimarycareproviderswill

consistoftheprimarycareprovidersusedintheMSSPprogram,aswellastheadditionofnurse

practitionersandphysicianassistants.


39/43



Table8-3

Specialtycodesforspecialistphysicians

39(nephrology)

Oncology:

83(hematology/oncology)

90(medicaloncology)

91(surgicaloncology)

92(radiationoncology)

98(gynecological/oncology)

66(rheumatology)

46(endocrinology)

29(pulmonology)

13(neurology)

86(neuropsychiatry)

6(cardiology)

SOURCE:PioneerRFAlistofeligiblespecialtiespluspersonalcommunicationfromHoangmaiPhamof

CMS.


40/43



Table8-4.

Variablesusedintotalbeneficiaryexpenditurecalculations

PaymentisEqual

to ClaimDeniedif

LineItem

Deniedif

Through

Date

SNF ClaimPaymentAmount

Anyvaluefor'ClaimMedicareNonPaymentreasoncode'

Noexclusion ClaimThrough

Date

Inpatient1 ClaimPayment

Amount

Anyvaluefor'ClaimMedicareNon

Paymentreasoncode'

Noexclusion Claim

Through

Date

Outpatient ClaimPayment

Amount


Paymentreasoncode'

Noexclusion Claim

Through

Date

Home

Health

ClaimPayment

Amount


Paymentreasoncode'

Noexclusion Claim

Through

Date

Physician/

Supplier

PartB

LineNCHPayment

Amount

'CarrierClaimPaymentDenial

Code'=0orDthroughY

LineProcessing

IndicatorCode

A,R,orS

LineThrough

Date

DME LineNCHPayment

Amount

'CarrierClaimPaymentDenial

Code'=0orDthroughY

LineProcessing

IndicatorCode

A,R,orS

Line

Through

Date

Hospice ClaimPayment

Amount

AnyvalueforClaimMedicareNon

Paymentreasoncode

Noexclusion Claim

Through

Date1Inpatientexpenditureswillnotincludepassthroughamounts.


41/43



Table8-5.

ScheduleforPioneerACObeneficiaryalignmentandbaselineexpenses

(performanceyears1through3)

Date

Applies

toPY Event

September30,2011 PY1 PreliminaryidentificationofalignedpopulationforPY1forpurposesof

(a)determiningeligibilityofACOtoparticipateinthePioneerprogram

and(b)generatingadeidentifieddatasetforusebyACOinplanning

forPY1. Thispreliminaryidentificationwouldbebasedondatafor

claimsthatwere(a)incurredduringthe3yearalignmentperiod

endingtheJune30,2011,and(b)paidthroughJune30,2011(i.e.,no

runoutofclaimsexperience).

December1,2011 PY1 IdentificationofprospectivelyalignedpopulationforPY1basedon

dataforclaimsthatwere(a)incurredduringthe3yearalignment

periodendingtheJune30,2011,and(b)paidthroughSeptember30,

2011(i.e.,witha3monthrunoutofclaimsexperience).Thisisthe

officiallistofprospectivelyalignedbeneficiariesforPY1. Itwilldiffer

fromthepreliminarylist(providedonlyforPY1)asaresultofthe

claimsrunout.

May1,2012 PY1 CalculationofprospectivePY1baselinesfortheACOsprospectively

alignedPY1populationandforthePY1referencepopulationbasedon

dataforclaimsthatwere(a)incurredduringthe3yearbaselineperiod

endingDecember31,2011,and(b)paidthroughMarch31,2012.




2012.May1,2013 PY2 CalculationofPY2prospectivebaselinesfortheACOsprospectively




May1,2013 PY1 IdentificationoffinalPY1alignedpopulation(i.e.,identificationofPY1

prospectivelyalignedbeneficiarieswhowerenotalignmenteligible

duringPY1). IdentificationoffinalPY1referencepopulation(i.e.,

identificationofPY1prospectivelyidentifiedalignmenteligible

beneficiarieswhowerenotalignmenteligibleduringPY1).

June1,2013 PY1 CalculationofPY1finalbaselinesfortheACOsfinalalignedPY1

population

and

for

the

PY1

reference

population

based

on

data

for

claimsthatwere(a)incurredduringthe3yearbaselineperiodending

December31,2011,and(b)paidthroughMarch31,2012.

CalculationofPY1performanceyearexpendituresfortheACOsfinal





42/43



Date

Applies

toPY Event




2013.







populationandforthePY2referencepopulationbasedondatafor



CalculationofPY1performanceyearexpendituresfortheACOsfinal










populationandforthePY3referencepopulationbasedondatafor



CalculationofPY3performanceyearexpendituresfortheACOsfinalalignedPY3populationandforthePY3referencepopulationbasedon




43/43


Table8.6

AgeandSexCategoriesbyEntitlementCategory

OriginallyAgedbeneficiarieswithoutcurrentESRD

Age65to69 Age65to69 Age70to74 Age75to79 Age80to84 Age85to89 Age90to94 Age95andolderOriginallyDisabledbeneficiarieswithoutcurrentESRD

Age0to34 Age35to44 Age45to54 Age55to59 Age60to64 Age65to69 Age70to74 Age75to79 Age80to84 Age85andolderCurrentESRD

Age0to34 Age35to44 Age45to54 Age55to59 Age60to64 Age65to69 Age70andolder

Date post:	05-Apr-2018
Category:	Documents
Upload:	eberg19
View:	224 times
Download:	0 times

Pioneer a Cos

Documents