Feds Meet to Discuss ACO Regulations

During a daylong event convened, Oct. 5, by the Centers for Medicare & Medicaid Services (CMS), the Federal Trade Commission (FTC) and the Office of Inspector General (OIG), leaders shared their views about what the government needs to do to ensure the success of Accountable Care Organizations (ACO). A key focus of the workshop was on how the requirements of various fraud and abuse laws could or should be addressed in the regulations that CMS is developing for the Medicare Shared Savings Program, and to what extent any safe harbors, exceptions, exemptions, or waivers from these laws may be warranted.

An ACO is an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program. CMS plans to establish the program by Jan. 1, 2012.

ACO goals include:

  • Ensuring integrity in federal health care programs
  • Promoting economy and efficiency in program operations
  • Promoting positive patient care and outcomes

Participating ACOs that meet specified quality performance standards (yet to be determined) will be eligible to receive a share (a percentage, and any limits to be determined by the secretary) of any savings if the actual per capita expenditures of their assigned Medicare beneficiaries are a sufficient percentage below their specified benchmark amount. The benchmark for each ACO will be based on the most recent available three years of per-beneficiary expenditures for Parts A and B services for Medicare fee-for-service beneficiaries assigned to the ACO. The benchmark for each ACO will be adjusted for beneficiary characteristics and other factors determined appropriate by the secretary, and updated by the projected absolute amount of growth in national per capita expenditures for Parts A and B.

The Patient Protection and Affordable Care Act, commonly referred to as the Affordable Care Act, which encourages providers to create shared savings programs (section 3022), such as ACOs, also gives the Health and Human Services (HHS) secretary authority to waive laws, such as the physician self-referral law and the anti-kickback statute, as necessary to achieve the goals of the ACO programs.

“Most of the care is provided by physicians in groups of nine or fewer,” said American Medical Association (AMA) President Cecil B. Wilson, M.D. “What we hope will happen is that the regulations, when they are released, will allow flexibility and not require a one-size-fits-all approach so that physicians in small groups can come together and improve the quality and reduce the growth in health care spending.” (American Medical News)

Inspector General Daniel R. Levinson said in his opening remarks at the workshop held at CMS headquarters in Baltimore, Md. that innovation in business arrangements is needed to fully implement ACO provisions of the Affordable Care Act.

“The fraud and abuse rules enforced by our office should not stand in the way of improving quality and reducing costs through ACOs,” Levinson said.

Read the transcript of the Oct. 5 workshop to learn more. Further details for the Shared Savings Program will be provided in a Notice of Proposed Rulemaking, which CMS expects to publish this fall.

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