The Medicare Shared Savings Program (aka. ACOs) final rules were released on 10/20/2011 with much fanfare.  All 696 pages of them!  And for the sake of completeness, IRS (Notice 2011-20, 7 pages), OIG (42 CFR Chapter IV, 83 pages) and FTC/DOJ (Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, 18 pages) companion regulations/rules came out on the same day.  Since the proposed rules on 3/31/2011, the federal agencies have incorporated many changes based upon the industry outcry. “Prescriptive” was the word often used to describe the approach to this aspect of healthcare reform.

Here are some highlights of the changes from proposed to final rule:

1. Remove two-sided risk from Track 1. Two tracks would still be offered for ACOs at different levels of readiness, with one providing higher sharing rates for ACOs willing to also share in losses. (Risk Sharing)
2. A preliminary prospective-assignment method with beneficiaries identified quarterly; final reconciliation after each performance year based on patients served by the ACO. (Patient Assignment)
3. 33 measures in four domains. (Note: Claims-based measures not finalized to be used for ACO-monitoring purposes). Longer phase-in measures over course of agreement: first year, pay for reporting; second year and third year, pay for reporting and performance. (Quality Reviews)
4. Share on first dollar for all ACOs in both models once minimum savings rate has been achieved. (Shared Savings)
5. Program established by January 1, 2012; first round of applications are due in early 2012. First ACO agreements start 4/1/2012 and 7/1/2012. ACOs will have agreements with a first performance “year” of 18 or 21 months.  ACOs starting 4/1/2012 and 7/1/2012 have option for an interim payment if they report CY 2012 quality measures. ACO must report quality measures for CY 2013 to qualify for first-performance year shared savings. (Start Date)

ACOs, the shift from volume to value, are no longer “mythical creatures”.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.