Avoiding Unintended Incentives in ACO Payment Models

The method used by the Centers for Medicare and Medicaid Services (CMS) to calculate spending benchmarks for accountable care organizations (ACOs) can potentially create perverse incentives, according to a Commonwealth Fund–supported study in Health Affairs (Jan. 2015). As CMS plans the next phase of the Medicare Shared Savings Program, researchers Rudy Douven, J. Michael McWilliams, and Thomas G. McGuire suggest modifications that would discourage ACOs from inflating their spending benchmark to make it easier to earn shared savings.