The Department of Health and Human Services (HHS) released its much-awaited final rule for Medicare accountable care organizations (ACO), which make it easier for doctors and hospitals to participate by cutting in half the number of performance measurements, removing the electronic health records requirement and eliminating financial risks for some groups.
To entice providers, CMS said it will make $170 million available starting next year to physician-owned and rural providers to start ACOs.
A move to ACOs has been seen as one of the most promising new models of delivering health care since it would reward doctors and hospitals for providing high-quality care to Medicare beneficiaries while keeping costs down. Today, hospitals and doctors generally get paid more for delivering more care, not necessarily better care.
Key Changes Included in Final Rule
- Providers will be able to participate in an ACO and share in savings with Medicare without risk of losing money. ACOs will be able to start sharing in the savings earlier rather than letting Medicare retain all the initial savings.
- The number of quality measures that ACOs will have to meet to qualify for performance bonuses was reduced from 65 to 33.
- The ACOs will be told up-front which Medicare beneficiaries are likely to be part of their system. Under the earlier rule, ACOs would not know which patients were in the ACO until their contract ended.
- Community health centers and rural health clinics will be allowed to lead ACOs. They were left out of the prior proposal.
Regulators estimate that between 50 and 270 ACOs would be formed in the next three years, affecting the care of 2 million of the 47 million Medicare beneficiaries.
Medicare beneficiaries will be assigned to an ACO based on who their doctor is. If a patient’s doctor is part of an ACO, that patient is automatically included, although the beneficiaries can choose to not be included by opting to keep their records outside the ACO system.
Unlike beneficiaries in Medicare HMOs, patients in ACOs are free to visit any health care provider, just as they are in the traditional Medicare program.
ACOs aim to improve care and save money by having doctors, hospitals and other providers better coordinate their services to among other things reduce unnecessary emergency room use and reduce hospital readmissions.
But the government’s efforts to push hospitals and doctors to work more closely together has raised anti-trust issues.
Actuaries for CMS anticipate that the program could save Medicare $940 million over four years —a drop in the bucket compared to the $2 trillion Medicare anticipates spending during this period. ACO proponents, however, hope that the new organizations would proliferate and be expanded both for Medicare beneficiaries and privately insured patients.
When administration officials released their preliminary rule last spring, hospital and doctor groups complained that the program created more financial risks than rewards and imposed onerous reporting requirements. The American Medical Group Association, which represents nearly 400 large provider organizations, told CMS officials in a letter that more than 90 percent of its members would not participate. In particular, industry groups objected to a provision in the proposed rule that would impose penalties for ACOs that do not achieve savings.
Source: Kaiser Health News, October 20, 2011
For More Information
Shared Savings Program final rule
Advanced Payment solicitation
For more information on these two topics, fact sheets are posted at http://www.cms.gov/center/press.asp.
The joint CMS and Department of Health and Human Services Office of Inspector General (OIG) Interim Final Rule with Comment Period addressing waivers of certain fraud and abuse laws in connection with the Shared Savings Program is posted at: www.ofr.gov/inspection.aspx.
The Antitrust Policy Statement is posted at: www.ftc.gov/opp/aco/ and http://www.justice.gov/atr/public/health_care/aco.html.
The Internal Revenue Service (IRS) Fact Sheet, Tax-Exempt Organizations Participating in the Medicare Shared Savings Program Through Accountable Care (FS-2001-11), will be posted at: http://www.irs.gov (PDF 52 KB).