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Subject: CMS provides proposed details of Accountable Care Organizations including requirements for administration by ACO governing body, two-track optison for Shared Savings Program, quality measures alignment with other programs, minimum required commitment, Minimum Savings Rate, Maximum Sharing Rate, and goals of program. The plan will be revised based on your comments submitted during the 60 day comment period and go into effect January 1, 2012.
What's an ACO?
According to the proposed rule, ACOs are, "teams of doctors, hospitals, and other healcare providers working together to coordinate and improve care for the beneficiaries they serve."
Under the proposed rule, ACO health care quality improvements and cost savings performance is incentivized based on self-reported improvements under certain "quality domains" (with some CMS oversight and possible site visits and beneficiary surveys) Besides meeting minimum improvement levels (the "Minimum Savings Rate") The potential incentive from (or "repayment" to) Medicare depends on the level of accountability the ACO is willing to bear and several other factors (size, location, service area, etc).
What's the goal of all this?
CMS states, "the goal of an ACO is to deliver seamless, high quality care for Medicare beneficiaries, instead of the fragmented care that has so often been part of fee-for-service healthcare." CMS also lists three top level goals:
Additionally, CMS wants ACOs to provide (and document) exemplary practices in evidence-based medicine and beneficiary care.
What do we have to do to qualify as an ACO?
To qualify for incentives, ACO have to make a Minimum Commitment, including:
You also must agree to comply with proposed reporting plan requirements (the full text of the rule includes an example plan).
Two "Tracks"
Track 1: the "One-sided" risk plan allows for a lower shared savings reward with no risk of payments to Medicare for poor performance in the first year, then full shared program participation in the following two years.
Track 2: The "Two-sided" risk plan allows for a higher shared savings reward with full program participation for all three years.
Important Concepts:
Shared Savings. The idea is that once your ACO has met the minimum savings rate requirement, a portion of your documented savings is paid back to you by Medicare (or you are liable to pay Medicare for poor performance).
Minimum Savings Rate. Intended to account for normal variations in healthcare costs, the minimum savings rate is a percentage above your established benchmark percentage that your ACO must exceed to qualify for shared savings. The actual rate varies based on which program track your ACO chooses: CMS has proposed a flat 2% for the "two-sided" risk model track; presumably, the one-sided risk plan rate will be higher.
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Benchmarks. Initial benchmarks for cost and quality are based on current costs and quality level. Benchmarks are updated yearly over the program term.
Maximum Sharing Rate. Quality measures in the ACO program are aligned with program initiatives of other quality incentive programs, including the PQRS (which may be rolled into the ACO program) and EHR programs.
What about the patient's right to privacy under HIPPA?
To be eligible, all of an ACO's beneficiaries are required to participate under the program (the ACO is required to inform their beneficiaries of this, that the ACO members may receive addition compensation or pay a penalty based on their performance, and that their claim data may be shared among ACO member companies) However, beneficiaries may "opt-out" by using a healthcare provider that's not participating in an ACO program or to "opt-out" of data sharing that violates any rules under HIPAA.
How is ACO performance measured?
Beyond being required to exceed benchmarks by the Minimum Savings Rate, ACO's will receive five scores within each proposed "quality domain" (a total of 25 scores) which are then aggregated into a percentage. That percentage is then applied to the maximum share rate (either 50 or 60%) your ACO is eligible for. The five quality domains (Patient Experience and Care, Care Coordination, Patient Saftey, Preventive Health, and At-Risk Population/Frail Elderly Health) each have a number of "quality measures" (65 total). These quality measures may change in the second and third year of the program.
Is it worth it?
Qualifying ACO could receive back from Medicare in the amounts of up to 60% of documented savings. Effective ACO programs could qualify for significant incentive rewards, especially in the first year of the program.
What if I like (or don't like) the idea and think something should be changed?
You may submit comments and opinions by email to http://www.regulations.gov. (Follow the "Submit a comment" instructions.)
For more information and guidance on this and other issues that affect your bottom line, contact . . .
PBN Business Development, 800.288.4901,
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