Last week, CMS released its final rule on the Medicare Shared Savings/ACO program which was outlined in our October 20 post “HHS Releases Final Regulations For Accountable Care Organizations.” Also released was a new Advanced Payment initiative specifically for physician organizations, a final FTC-DOJ Policy Statement on Antitrust Enforcement for Medicare ACOs, and an Interim Final Rule on fraud waivers for Medicare ACOs.
Based on AMA’s preliminary review, there are significant changes to the Final Rules and significant advocacy wins for the AMA and physicians. While AMA staff is now reviewing in detail, the following changes have been made to the rule that are very positive and reflect AMA comments on the proposed rules:
ACO Payment and Structure
- The standard financial model for ACOs will still be shared savings, i.e., there will be no change in the underlying payment system, and the program will function essentially as a pay-for-performance program based on total cost. However, they are creating a complementary program through the Innovation Center to provide “Advance Payments” specifically to physician organizations and rural providers that do not have the capital reserves available to finance needed changes in care processes or to cover short-term losses while waiting for shared savings payments to be made.
- There will still be two different tracks for ACOs, but one will be “upside only” during the three-year contract period, i.e., the ACO will not be liable to pay CMS if costs actually increase. The second will be both upside and downside, as in the proposed rule. (The proposed rule made ACOs even in the first track liable to pay CMS back for cost increases in the third year.)
- There will no longer be requirements to withhold shared savings payments to cover potential future cost increases.
- ACOs will be allowed to share in savings beginning with the first dollar of savings earned. The proposed rule gave ACOs a share of savings above a minimum threshold. ACOs must still meet a minimum threshold of savings but they can earn back more of the savings they generate.
- There will be 33 quality measures instead of 65, and they have dropped the Hospital Acquired Conditions (HAC) measures, as we urged. There will be no flexibility, though, for different quality measures in different regions.
- They will have a more prospective method of assigning beneficiaries. ACOs will get a list of “probable beneficiaries” and the list will be updated quarterly. There will still not be mechanisms for beneficiaries to sign up voluntarily, though; the ACO will only get credit for them after the attribution methodology determines that they have had a majority of their primary care visits with the ACO. In addition, as the AMA recommended, CMS will include primary care services provided by specialist physicians in assigning patients to ACOs, and not limit the attribution method exclusively to primary care physicians.
- They eliminated the requirement that at least 50 percent of an ACO’s primary care physicians must be “meaningful users” of EHRs by year 2 of the program. Instead they will double weight the quality measure “Percent of PCPs who successfully qualify for an EHR Incentive Program Payment.” ACOs only have to report a percentage and not meet a specified percentage when reporting this quality measure and the term “qualify” covers PCPs who participate in either the Medicare or Medicaid EHR Incentive program.
- There will be a rolling application process, so prospective ACOs will have time to prepare without having to meet arbitrary deadlines that are too short.
FTC-DOJ has adopted two important changes that the AMA requested:
- They have eliminated the need for mandatory review of ACOs above the 50 percent threshold of the primary service area (PSA) calculation. While the Agencies will still rely on the PSA calculation, eliminating mandatory review will result in significant removal of burden and cost on potential ACOs.
- The statement applies to ALL collaborations among otherwise independent providers. The draft statement applied only to new entities formed after March 23, 2010. This would have placed all collaborations that existed prior to March 23, 2010 under a separate antitrust review system.
- CMS and the Office of Inspector General adopted the AMA recommendations that the waivers begin sooner so that they will apply during the process of planning a Medicare ACO, and that ACOs will be able to offer certain additional medical benefits to patients, such as care management, without having them viewed as inappropriate inducements. In addition, the agencies issued the new waivers regulation as an interim final rule instead of a final rule, as the AMA had recommended.