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ACO Final Rule Addresses Perceived Barriers To Participation



October 20th, 2011

The Centers for Medicare and Medicaid Services today released the long-awaited final rule on the Medicare Shared Savings Prorgram, which sets standards for the creation of accountable care organizations. ACOs are designed to encourage physicians, hospitals, and other providers to coordinate with each other and provide better quality care more efficiently. They were advanced by Elliott Fisher and others in Health Affairs and established in the Affordable Care Act.

As the nation deals with federal budgetary pressures, ACOs represent one of the primary hopes for controlling the growth of health spending in ways that improve care, rather than simply through blunt cuts to benefits and provider payments. However, when the proposed ACO rule was released this spring, many providers said the rule created too many barriers and that they would not participate  in the program.

The final version of the rule contains revisions addressing many of those perceived barriers. This post briefly touches on some of these changes. Health Affairs Blog will feature more blog posts on the final rule and related developments in the coming days. 

For example, the final rule allows ACOs to choose a track in which they share in any savings they produce for Medicare but are not penalized if they increase spending. In addition, once ACOs meet a savings threshold, the final rule allows them to share in savings from the first dollar, rather than only sharing in the savings above that threshold.

The final rule cuts in half the number of quality metrics on which ACOs will be measured. It also removes requirements regarding the adoption of electronic health records. The final rule states that ACOs will be prospectively informed which Medicare enrollees will be attributed to them, but it provides for a retrospective end-of-year reconciliation process to account for patients whose care patter changes significantly.

Will these changes entice providers to form ACOs? CMS actuaries predict that, over the first three-and-a-half years of the program, somewhere between 50 and 270 groups will form ACOs; the upper bound is about double the upper bound projected in the proposed rule. And George Roman, senior director of health policy at the American Medical Group Association, which represents nearly 400 large provider organizations, told Kaiser Health News that, although he had not yet read the entire final rule, he was “cautiously optimistic.” The changes are “music to my ears. These are changes that are good. We asked for almost all of these things,” he said.

In addition, the Center for Medicare and Medicaid Innovation issued a solicitation for participants in its Advanced Payment Accountable Care Organization model, which provides start-up capital to physician-owned and rural providers participating in the Medicare Shared Savings program. The money is then recouped from savings produced by the ACO.

Also, the Justice Department and the Federal Trade Comission issued their final policy statement on antitrust enforcement regarding ACOs. Under the propsed Medicare Shared Savings rule, certain collaborations had been subject to mandatory antitrust review before forming ACOs. Under the final rule, that is no longer the case, and the policy statement reflects that.

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