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The Skinny on the New ACO Rules: What’s Changed?

By Rahul Patel
Physicians EHR, Inc

Last month, CMS issued new final rules for accountable care organizations (ACO), making major revisions in response to the strong public criticism of the original draft regulations released in March. Hospitals and physician groups had nearly uniformly rejected the draft proposals as too risky and too difficult. Chief among the complaints were that providers would not be sharing enough in the savings created by an ACO, a convoluted list of 65 quality measures an ACO would need to meet to quality for performance bonus payments, and retrospective assignment of Medicare beneficiaries to ACOs.

Accountable care organizations are envisioned to encourage primary care doctors, specialists, hospitals, and other healthcare providers to coordinate their care for the benefit of Medicare patients.

As for the revised regulations, the reaction has been mostly positive. The most notable changes include:

• Providers will be able to earn revenue sharing based on ACO savings earlier as opposed to Medicare retaining all the initial savings.
• Providers will not be subject to penalties for failing to meet savings or quality measures when participating in an ACO.
• Providers are able to participate in more than one ACO when billing from more than one hospital setting.
• Quality measures that ACOs will have to meet to qualify for performance bonuses have been reduced from 65 to 33.
• Community health centers and rural health clinics will now be allowed to lead ACOs.
• ACOs will be told which Medicare beneficiaries are likely to be part of their system as opposed to not knowing which patients were in the ACO until the contract ended.
• Primary-care providers in ACOs will not face a requirement that at least half must have earned “meaningful use” designation by the second year.
• An Advance Payment Model where physician-led practices and rural hospitals participating in the Shared Savings Model could receive upfront payments for ACO participation.
• CMS is funding the first two years of patient engagement surveys required of an ACO.

Agreements for Medicare ACOs and the Advanced Payment program will begin in 2012 on two dates: April 1 and July 1. For more information on participating in an ACO program, please visit the CMS’ ACO resource.

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Resources:

1. Final ACO regs include bigger bonuses
2. New Affordable Care Act Tools Offer Incentives for Providers to Work Together When Caring for People with Medicare
3. THE ACO Medicare Shared Savings Program Final Rule: Analysis of Key Changes from the Proposed Rule