ACO proposed rule outlines risks and rewards for doctors and hospitals
Yesterday, the Department of Health and Human Services (HHS) released the much-anticipated proposed rule for accountable care organizations (ACOs) under the Medicare Shared Savings Program. ACOs are a model of care in which doctors, hospitals and other institutions work across settings to coordinate and improve care for a population of patients and take part in any cost-savings achieved. ACOs were a key part of the Affordable Care Act, which specified that they be operational as early as January 2012.
The proposed rule offers two options for developing ACOs:
1) ACOs willing to take on more risk could pocket bonuses of up to 60 percent of any savings they achieve for the Medicare program. If they fail to achieve the minimum savings rate and fail to meet specified performance standards, they would have to repay Medicare up to 10 percent of what their patients would have cost if they weren't in an ACO.
2) ACOs that are more risk adverse could opt for a smaller share (up to 50 percent) of any savings they achieve (after a two-percent threshold is met, with exceptions for small ACOs in rural or underserved communities), but they would assume no risk for the first two years. In year three, a penalty of up to 7.5 percent would apply if the ACO failed to meet performance standards or achieve the targeted savings.
The proposed rule includes 65 performance measures related to patient experience of care, care coordination, patient safety, preventive health and at-risk population/frail elderly health. In year one, ACOs must simply report the quality measures. The measures are aligned with those used in other Medicare programs such
as the Physician Quality Reporting System (PQRS). ACOs that
successfully report the quality measures would be eligible for the PQRS
bonus as well.
The proposed rule provides flexibility in the structure and participants of an ACO; however, it states that ACOs must include "primary
care ACO professionals that are sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO." In addition, the ACO must take responsibility for a minimum of 5,000 Medicare beneficiaries, and its governing body must include primarily health care providers who belong to the ACO as well as representatives of the community and Medicare patients being served.
"Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close," wrote Don Berwick, MD, CMS Administrator, in the New England Journal of Medicine.
The proposed rule also includes a provision to relax antitrust laws that currently prevent close collaboration between physicians and hospitals. Rural providers and new ACOs with less than 30-percent market share would be given leniency. For larger proposed ACOs, the Federal Trade Commission would have 90 days to determine whether the new entity would violate antitrust laws.
The AAFP and AMA have raised concerns that the large capital investments
required for startup and the requirement that an ACO have at least 5,000
Medicare patients could prevent physicians in small practices from
participating.
CMS will accept comments on the proposed rule until June 6 before issuing a final rule later this year.
Related reading:
The ACO Model – A Three-Year Financial Loss?
NEJM. March 23, 2011.
Case Study of a Primary Care-Based Accountable Care System Approach to Medical Home Transformation. J Amb Care Manag. January/March 2011.
Don't Think the ACO Model Works Within Primary Care? Think Again. AAFP News Now. March 16, 2011.
Launching Accountable Care Organizations – The Proposed Rule for the Medicare Shared Savings Program. NEJM. March 31, 2011.
Posted at 04:28PM Apr 01, 2011
by Brandi White |