§ 512.307 - Subsequent calculations.

§ 512.307 Subsequent calculations.

(a) Subsequent reconciliation calculation.

(1) Fourteen months after the end of each performance year, CMS performs an additional calculation, which accounts for changes since the calculation of the initial NPRA, using claims data and non-claims-based payment data available at that time, to account for final claims run-out, final changes in non-claims-based payment data, and any additional episode cancellations due to overlap or other reasons as specified in § 512.240(a)(2), (b)(2), and (c)(2).

(2) The additional calculation occurs concurrently with the reconciliation process for the most recent performance year and determines the subsequent calculation amount as follows:

(i) If the result of the subsequent reconciliation calculation is different than zero, CMS applies the stop-loss and stop-gain limits in § 512.305(c)(2)(iii)(A) through (D) to the calculations in aggregate for that performance year (the initial reconciliation from § 512.305(c)(2)(ii)(C), before application of the stop-loss and stop-gain limits, and the subsequent reconciliation calculation) to ensure the calculations in aggregate do not exceed the stop-loss or stop-gain limits. CMS then takes the difference between that amount and the initial NPRA after application of the stop-loss and stop-gain limits in § 512.305(c)(2)(iii)(A) through (D) to determine the subsequent calculation amount.

(ii) CMS then applies the subsequent calculation amount to the NPRA for the most recent performance year in order to determine the reconciliation amount or repayment amount for the most recent performance year.

(iii) Because EPM participants that elected downside risk in performance year do not have financial repayment responsibility for performance year 1, for the performance year 2 reconciliation report only, the subsequent calculation amount (for performance year 1) is applied to the performance year 1 NPRA to ensure that the combined amount is not less than zero.

(iv) Because EPM participants that have not elected downside risk in performance year 2 do not have financial repayment responsibility for performance years 1 or 2, for the performance year 2 and performance year 3 reconciliation reports only, the subsequent calculation amount (for performance year 1 or performance year 2) is applied to the performance year 1 NPRA or performance year 2 NPRA to ensure that the combined amount is not less than zero.

(b) Additional calculations to determine the reconciliation payment or repayment amount. CMS reduces the reconciliation payment or increase the repayment amount for the subsequent performance year to account for shared savings paid to the ACO in the prior performance year by the amount of the EPM discount factor paid out to the ACO as shared savings in the prior performance year. This adjustment is only made when the EPM participant is a participant or provider/supplier in the ACO and the EPM beneficiary is not prospectively assigned to one of the following:

(1) An ACO in the Next Generation ACO model.

(2) An ACO in Track 3 of the Medicare Shared Savings Program.

(3) An ACO in the Comprehensive ESRD Care Model that includes downside risk.

(c) Increases in post-episode spending. If the average post-episode Medicare Parts A and B payments for an EPM participant in the prior performance year is greater than 3 standard deviations above the regional average post-episode payments for the same performance year, then the spending amount exceeding 3 standard deviations above the regional average post-episode payments for the same performance year is added to the calculation of the reconciliation or repayment amount for the subsequent performance year.