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CMS Issues ACO Final Rule

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  • October 28, 2011
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The Centers for Medicare & Medicaid Services (CMS) issued a final rule Oct. 20 that encourages primary care doctors, specialists, hospitals, and other health care providers to coordinate their care for Medicare beneficiaries through accountable care organizations (ACOs). The Medicare Shared Savings final rule, created by the Affordable Care Act, provides more options for providers who wish to achieve this goal of high quality care that is more cost effective.

“This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other health care providers to work together in new ways,” said U.S. Department of Health & Human Services (HHS) Secretary Kathleen Sebelius.
According to AHANews, “The rule made several significant changes to make the program more attractive and operationally viable. Most significantly, the rule allows all participants to share in first-dollar savings and eliminates down-side risk for low-risk ACOs participating in the track one option. The proposed rule would have subjected track one ACOs to down-side risk in the third year of the program. CMS also said it will not withhold any portion of an ACO’s earned bonus, as proposed, and eliminated indirect medical education payments from spending estimates. In addition, CMS reduced the number of quality measures to be reported to 33 from 65 and did not finalize any meaningful use requirements for the ACO program.”
Other changes from the proposed rule include making the one-sided model truly one-sided, expanding participation to Rural Health Clinics and Federally Qualified Health Centers and organizations where specialists provide primary care, and providing a flexible start date in 2012. Federal savings from this initiative could be as much as $940 million over four years, HHS estimates.
An initiative launched the same day will help providers form ACOs and reflect stakeholder input and lessons learned by innovators in private sector coordinated care. The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.
Two other Affordable Care Act efforts, the Bundled Payments for Care Improvement Initiative and the Comprehensive Primary Care Initiative, also offer alternatives to coordinate and improve health care while reducing costs.
Get the Information You Need
To aid organizations interested in becoming an ACO, CMS is offering a number of learning opportunities for providers, including a third Accelerated Development Learning Session on November 17-18 in Baltimore. Additional information regarding ACOs can be found on and CMS websites.
The Shared Savings Program final rule is posted on the Office of the Federal Register website.
An Antitrust Policy Statement is posted on the U.S. Department of Justice website (DOJ).
An Advanced Payment solicitation is posted on the Innovation Center website.
An Internal Revenue Service (IRS) Fact Sheet, Tax-Exempt Organizations Participating in the Medicare Shared Savings Program through Accountable Care (FS-2001-11), is on the IRS website.
A joint CMS and HHS 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, can be found here.

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