ACO Benchmarking: How to Improve Quality Scores

Accountable Care Organizations live or die by their benchmarks. Your ACO benchmark determines how much shared savings you can earn—or how much you might owe if spending exceeds targets. For ACO leaders managing Medicare Shared Savings Program performance, understanding benchmarking isn't optional. It's the difference between financial success and struggling to keep your doors open.

The challenge? Benchmarks are complex, constantly evolving, and heavily dependent on data quality that many ACOs struggle to maintain. This guide breaks down how ACO benchmarking actually works, where organizations typically struggle, and provides concrete strategies to improve your quality scores and financial performance.

Why Benchmarking Matters for ACOs

ACO benchmarking is the foundation of value-based care accountability. Your benchmark represents the spending target CMS expects for your attributed beneficiaries based on historical data, regional trends, and population risk. Hit below that benchmark while meeting quality standards, and you share in savings. Exceed it, and you might face losses—depending on your track.

The financial stakes are enormous. ACOs in the Medicare Shared Savings Program (MSSP) can earn significant shared savings bonuses by lowering spending below their financial benchmark. However, high-risk beneficiaries and clinicians with high-risk patient panels were more likely to exit the MSSP, suggesting that benchmark methodology creates real pressure on ACO participation decisions.

Why benchmarks matter so much:

• Financial impact: Shared savings can fund quality improvement initiatives, technology investments, and provider bonuses
• Strategic planning: Understanding your benchmark helps you prioritize which cost drivers to address
• Competitive positioning: ACOs that master benchmarking outperform those flying blind
• Risk management: Knowing where you stand prevents surprises at settlement time

Medisolv helps ACOs navigate this complexity by providing real-time performance tracking, data validation, and expert guidance on optimizing both quality scores and financial outcomes.

How Benchmarks Are Calculated

Understanding how CMS calculates your benchmark is critical to improving it. The methodology involves multiple steps, each creating opportunities for ACOs to influence their performance.

Historical Benchmark Calculation

CMS uses expenditures from three previous years to calculate the benchmark, known as benchmark years (BY1, BY2, and BY3). These years are weighted differently: 10%/30%/60% for BY1/BY2/BY3, respectively for the first agreement period.

CMS takes each year's spending, risk-adjusts it to BY3 levels, trends it forward using national and regional growth factors, and then blends them together. This creates your historical benchmark—essentially what CMS thinks you should have spent based on your own past performance.

Regional Adjustment

Your benchmark doesn't just reflect your history—it also incorporates regional spending patterns. For each beneficiary type, an ACO's risk-adjusted expenditure in BY3 would be compared to that of the region. A certain portion (35% or 50%) of this difference would be considered the regional benchmark adjustment.

This adjustment rewards ACOs in high-cost regions that spend less than their peers, while potentially penalizing those in efficient regions who still spend above regional averages. For renewing ACOs with strong prior performance, CMS uses the greater of 50% of prior per capita savings or the standard regional adjustment—a significant advantage for high performers.

Risk Adjustment

Risk adjustment is where things get technically complex. CMS uses Hierarchical Condition Categories (HCC) to account for differences in patient health status. However, the methodology includes important caps to prevent gaming.

After accounting for the change in risk scores for all FFS beneficiaries eligible for assignment and further accounting for relative changes to an ACO's demographics, the MSSP limits the increase of an ACO's average risk score to 3 percentage points between the final baseline year and the performance year.

This 3% cap creates a critical dynamic: to discourage increased coding intensity, the benchmark is not adjusted upward if the risk score rises while the beneficiary is in the MSSP. If the risk score falls, however, the benchmark is adjusted downward.

Trend Factors

Finally, CMS updates your benchmark each performance year using national and regional trend factors. Recent rule changes introduced a three-way blend combining national trends, regional trends, and ACO-specific trends (called ACPT factors) to create more nuanced projections.

Common Benchmarking Challenges ACOs Face

Even ACOs with strong clinical programs struggle with benchmarking challenges that undermine performance.

Data Collection Across Multiple EHRs

Most ACOs aren't single integrated systems—they're networks of independent practices using different electronic health record systems. Aggregating quality and utilization data across disparate EHRs creates massive operational headaches.

Practices might use Epic, Cerner, Athena, or dozens of smaller vendors, each with different data structures, export capabilities, and quality measure logic. Pulling consistent, accurate data from this fragmented environment requires significant IT infrastructure that many ACOs lack.

Transitioning to eCQMs

CMS is aggressively pushing ACOs toward electronic clinical quality measures (eCQMs) and away from claims-based reporting. This transition sounds straightforward, but creates real implementation challenges.

eCQMs require data to exist in structured EHR fields with proper value sets and timestamps. Many practices still rely heavily on free-text notes that don't support automated quality measure extraction. The result? ACOs find themselves caught between CMS expectations and clinical reality.

Data Lag and Inaccurate Reporting

By the time CMS provides final settlement calculations, it's too late to fix problems. ACOs need real-time visibility into performance to make mid-year corrections, but most lack the analytics infrastructure to generate reliable projections.

Data lag also affects strategic decision-making. When you don't know where you stand until months after the performance year ends, you can't adjust clinical programs, provider incentives, or care management interventions in time to impact results.

Limited Internal Analytics Capability

Creating meaningful benchmarking insights requires sophisticated analytics—risk stratification, predictive modeling, trend analysis, and comparative performance assessment. Most ACOs don't have dedicated analytics teams with this expertise.

Without strong analytics, ACOs struggle to answer basic questions: Which providers are driving high costs? What service categories offer the biggest savings opportunities? Are we on track to meet our benchmark? Which quality measures need immediate attention?

Strategies to Improve Quality Scores

Improving ACO performance benchmarking requires systematic approaches across data, workflows, and technology.

Optimize eCQM & CQM Adoption

Moving to eCQMs isn't just about compliance—it's about creating better data infrastructure for performance improvement.

Start with measure selection: Choose eCQMs where your EHR already captures data reliably. Don't try to implement all measures simultaneously. Build confidence with 2-3 measures, validate accuracy through chart review, and expand gradually.

Invest in EHR optimization: Work with your vendor to ensure quality measure logic is correctly configured. Many EHRs have eCQM functionality that practices never fully implement because it requires upfront configuration work.

Create feedback loops: Clinicians need to see how their documentation affects measure performance. Build dashboards that show individual provider performance and provide specific examples of documentation gaps.

Use Data Analytics for Gap Identification

You can't improve what you don't measure. Robust analytics help ACOs identify exactly where performance is falling short.

Implement care gap reporting: Identify patients who haven't received recommended preventive services, screenings, or chronic disease management. Close these gaps through outreach campaigns and point-of-care reminders.

Track cost outliers: Use predictive analytics to identify high-risk patients before costs spike. Early intervention—care coordination, medication management, social support—can prevent expensive hospitalizations.

Benchmark against peers: Understanding how your performance compares to similar ACOs helps prioritize improvement efforts. Focus on measures where you're significantly below peer performance.

Implement Clinician Education and Workflow Integration

Technology alone doesn't improve quality scores—you need engaged clinicians who understand why quality measurement matters and how to document care properly.

Provide measure-specific training: Don't just tell providers to "document better." Show them specific examples of how incomplete documentation causes quality measure failures and what complete documentation looks like.

Integrate quality measures into workflows: Build quality measure prompts directly into clinical workflows using EHR alerts, best practice advisories, and clinical decision support. Make doing the right thing the path of least resistance.

Tie performance to incentives: Create transparent pay-for-performance programs that reward providers for quality measure achievement and cost efficiency. When providers' compensation aligns with ACO goals, performance improves.

Conduct Mock Audits and Pre-Submission Validation

Don't wait for CMS to tell you there's a problem. Build internal quality assurance processes that catch issues before submission.

Run quarterly validation audits: Pull random samples of patients and validate that quality measure calculations match what's documented in charts. Track error rates by measure and implement corrective actions.

Test submission files before deadline: Generate trial submission files and run them through validation software. Fix any technical errors or data quality issues before the actual submission window.

Document your methodology: Maintain clear documentation showing how you calculated each measure, which patients were included/excluded, and what data sources you used. This protects you during audits.

Leverage Advisory Services for Compliance Guidance

Regulatory complexity is increasing faster than most ACO staff can keep up. Expert guidance helps you avoid costly mistakes and capitalize on opportunities.

Stay current on rule changes: CMS updates MSSP rules regularly through annual rulemaking. Advisory services help you understand what's changing and how it affects your specific situation.

Optimize measure selection: Not all quality measures have equal impact on your overall score. Experts can help you prioritize which measures to focus on for maximum benefit.

Navigate complex scenarios: When you encounter edge cases—beneficiary attribution questions, measure specification ambiguities, unusual coding situations—having experts to consult prevents errors.

Medisolv's Role in Benchmarking Success

Medisolv was built specifically to solve the ACO benchmarking and quality reporting challenges outlined above.

Comprehensive ACO eCQMs & CQMs Solutions

Our platform automates the heavy lifting of quality reporting:

• Multi-EHR data aggregation: Pull quality data from multiple EHR systems into a single reporting platform
• Real-time measure calculation: Track performance throughout the year so you know where you stand before submission
• Automated validation: Flag potential data quality issues before they become submission problems
• Submission management: Generate CMS-compliant submission files that meet all technical specifications

CMS Compliance Expertise

We don't just provide technology—we provide guidance:

• Regulatory monitoring: We track CMS rule changes and update our platform to reflect new requirements
• Measure specification expertise: Our team understands the nuances of eCQM specifications and helps you implement them correctly
• Audit support: When CMS audits your data, we provide documentation and technical support to demonstrate compliance

APP Reporting and Benchmarking Dashboards

For ACOs participating in the Alternative Payment Model Performance Pathway (APP), we provide:

• Performance projections: See where you're likely to land at year-end based on current performance
• Benchmark tracking: Monitor your performance relative to your benchmark in real-time
• Provider-level reporting: Drill down to individual provider performance to identify improvement opportunities
• Cost and quality integration: See how clinical quality performance connects to the total cost of care

We help you transform benchmarking from a compliance burden into a strategic advantage.

Ready to simplify your ACO reporting and improve quality scores?

Conclusion

ACO benchmarking isn't getting simpler—CMS continues adding complexity through new risk adjustment methodologies, regional adjustments, and evolving quality measures. ACOs that thrive in this environment are those that invest in data infrastructure, clinical workflow integration, and expert guidance.

The strategies outlined here—optimizing eCQM adoption, using analytics for gap identification, engaging clinicians, conducting internal audits, and leveraging expert advisory services—represent proven approaches for improving both quality scores and financial performance.

The difference between ACOs that succeed and those that struggle often comes down to whether they treat benchmarking as an annual compliance exercise or a continuous performance improvement process. Organizations that build systematic approaches to data quality, clinician engagement, and performance tracking consistently outperform those relying on manual processes and year-end scrambles.

Medisolv has helped hundreds of ACOs transform their approach to quality reporting and benchmarking. Our platform, combined with expert advisory support, gives you the infrastructure and expertise needed to compete successfully in value-based care.