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HHS releases final ACO regulations

Thursday October 20, 2011
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People with Medicare can benefit from a new program designed to encourage primary care doctors, specialists, hospitals and other healthcare providers to coordinate their care under a final regulation issued Thursday regarding Accountable Care Organizations.

These final rules on ACOs, created under the Affordable Care Act, add to the menu of options for providers looking to better coordinate care for patients and will help providers deliver high quality care and use healthcare dollars more wisely, according to the U.S. Department of Health and Human Services.

Compared with the proposed rule, the final rule streamlines performance measurements for ACOs. HHS reduced from 65 to 33 the number of quality measures that determine whether ACOs can achieve performance bonuses. Participating providers also no longer are required to use electronic health records.

Providers also can sign up without agreeing to pay Medicare if they do not achieve savings. However, those who agree to assume the risk of cost overruns in turn would be eligible for greater rewards.

In other changes from the proposed rule, community health centers and rural health clinics are eligible to lead ACOs, and providers will be able to learn up front which patients are eligible to receive care in their ACO.

"We are excited to give doctors, hospitals and other providers the flexibility and support they need to work together and focus on making sure patients get the care they need," HHS Secretary Kathleen Sebelius said in a news release. "This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals and other healthcare providers to work together in new ways."

The two initiatives launched Thursday — the Medicare Shared Savings Program and the Advance Payment model — will help providers form ACOs and reflect input provided by stakeholders as well as lessons learned by innovators in care coordination in the private sector.

The Medicare Shared Savings Program will provide incentives for participating healthcare providers who agree to work together and become accountable for coordinating care for patients. Providers who band together through this model and who meet certain quality standards based on certain measures, including patient outcomes and care coordination among the provider team, may share in the savings they achieve for the Medicare program. The higher the quality of care providers deliver, the more shared savings they may keep.

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. The advance payments would be recovered from any future shared savings achieved by the ACO.

"As a physician I understand the complexities of caring for a patient who may have multiple providers," Donald M. Berwick, MD, administrator of the Centers for Medicare & Medicaid Services, said in the news release. "This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive."

Both the Medicare Shared Savings Program and Advance Payment model create incentives for healthcare providers to work together to treat an individual patient across care settings including doctors' offices, hospitals and long-term care facilities.

Unlike a managed care plan, Medicare beneficiaries will not be locked into a restricted panel of providers. Rather, a determination of whether an ACO was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization.

For more information, fact sheets are posted at: www.HealthCare.gov/news/factsheets/2011/10/accountable-care10202011a.html and www.cms.gov/ACO/.

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