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In 2024, the Centers for Medicare and Medicaid Services (CMS) implemented important changes to how spending targets, known as benchmarks, are set in the Medicare Shared Savings Program (MSSP) for accountable care organizations (ACOs) entering new five-year agreement periods. Among these, CMS introduced an Accountable Care Prospective Trend (ACPT) into the formula for updating MSSP benchmarks. The ACPT is a fixed growth rate, based on CMS’s estimate of future national Medicare spending growth per beneficiary, although conceptually it could be based on other metrics such as gross domestic product growth, or set based on policy objectives.
For 2024, the ACPT growth rate (originally 3.6 percent and recently changed to 4.9 percent) was well below the 7.5 percent to 9.0 percent growth being reported by ACOs and by independent analysts for 2024. The magnitude of this gap (0.9 percent to 1.3 percent after the one-third weighting given to the ACPT), and the fact that it occurred during the first year of the policy before the ACPT can support its goal of helping ACOs save more, is unfortunate. If it is not addressed, there will be a downward impact on ACOs’ 2024 settlements that will carry into subsequent years. For example, an ACO with 25,000 beneficiaries and an average benchmark of $12,500 could see a benchmark reduction of $2.7–$4.1 million in 2024 with a shared savings reduction of roughly $1.5 – $2.0 million.