​The Centers for Medicare & Medicaid Services (CMS) in October released a final rule for establishing Accountable Care Organizations (ACOs), replacing key parts of its much-scorned ACO draft rule proposal with more financial enticements and a reduction in the number of quality measures in the plan. 

 “The final rule strikes a better balance,” said Jonathan Blum, CMS deputy director and director of the Center for Medicare, referring to modifications made to ease bottom-line concerns of stakeholders with new financial incentives, while at the same time maintaining quality improvement models.
The major changes from the draft include CMS reducing by half the number of quality measures from 65 to 33, the elimination of the electronic health records requirement, and the introduction of a payment model that allows ACOs to share on the first dollar once a minimum savings rate has been established.

The Medicare Shared Savings Program (MSSP), or ACO program, is expected to save $940 million over three years. CMS estimates 50 to 270 organizations will take part in the first reporting period of the program.

Mark Lutes, a partner in the Washington, D.C., law office of Epstein Becker Green, thinks CMS made a positive move with the final rule, listening to the concerns of most stakeholders on the unwieldy nature of the draft plan.

“I certainly think it is a step in the right direction. There are now a number of intriguing possibilities for provider groups to contemplate,” Lutes says.

In addition to the changes listed above, CMS also changed the way it would assign Medicare beneficiaries to ACOs, offering a preliminary prospective assignment method where beneficiaries would be identified on a quarterly basis. The draft rule proposed retrospective assignment of beneficiaries based on utilization of primary care services, with prospective identification of a benchmark population.

Eligibility provisions were also altered from the draft. The final rule allows federally qualified health centers and rural health clinics to both form and participate in an ACO. CMS also said it listened to the concerns of rural providers and physician-owned entities by extending “advance payments” to help these organizations receive up-front funding that would be recouped as these ACOs implement savings.

“Today we have taken another step to improve health care for people with Medicare,” said Health and Human Services Secretary Kathleen Sebelius. “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.

“This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other health care providers to work together in new ways.”

CMS said MSSP will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients. Providers that band together through this model and that meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program. The higher the quality of care providers deliver, the more savings the providers may keep.

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald Berwick, MD, CMS administrator.

“This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive.”

The CMS rule implements Section 3022 of the Affordable Care Act relating to Medicare payments to providers of service and suppliers participating in ACOs. Under these provisions, providers of suppliers and suppliers of services can continue to receive traditional Medicare fee-for-service payments under Parts A and B and be eligible for additional payments based on meeting specified quality and savings requirements.

ACOs are designed to act as networks to increase efficiency by bringing more doctors and hospitals onto one team with incentives from insurers to keep people healthy and costs down.

Post-acute care facilities would be eligible to take part in new ACOs as soon as quality measures for care are finalized.

The Shared Savings Program is at www.ofr.gov/inspection.aspx. The Advanced Payment solicitation is at:http://innovations.cms.gov/areas-of-focus/seamless-and-coordinated-care-models/advance-payment/.