ACO Algebra. MACRA Upside >= MSSP Upside

Written by Jay Fisher | Jan 28, 2019 8:58:08 PM

After spending the past several weeks analyzing the 2019 ACO Final Rule, it just struck me. MACRA can be a bigger financial benefit than "core" ACO rewards and penalties.

Consider - any ACO in a one-sided risk arrangement could gain up to 10% of their benchmark costs. Of that ceiling, 40% goes to the ACO, and CMS keeps the rest. The ACO needs to retain some portion of those savings to invest in staff and other infrastructure, whether as an explicit retention, or via annual fees to providers. A 15% ACO "overhead" retention leaves about 3.4% for providers (40% x 85% x 10%).

Granted, those benchmark costs incorporate both Part A and Part B costs; adjusting for the assumption that physician (Part B) is around 50% of the Part A + Part B revenues, then EC staff could be eligible for around 6.8%.

Under MACRA (even for ACOs), the top rate a physician could earn for 2019 is potentially 17% (7% base plus 10% exceptional performance). Even after accounting for dilution of the revenue neutral and exceptional performance pools, most providers will earn more ... possibly much more ... under MACRA in 2019. Strangely, the revenue neutral and exceptional performance pools will probably have more money in them specifically because 2019 will be a harder year.

That's a lot of arithmetic, but you can try it out here. We have a nice downloadable model you can use to test out your own circumstances.

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