HHS Releases Final ACO Rule

The Department of Health & Human Services (HHS) today released the final rule for accountable care organizations (ACO).

The new rule includes a number of changes designed to make the Medicare Shared Savings Program more palatable for health care providers who had a largely negative response to the draft rule released last March. The changes include the following:

  • Allow providers to choose to participate without any downside financial risk during the initial contract period, rather than requiring all participants to take downside risk during the third year of the contract period
  • Provide up front financial support to physician-owned ACOs to support investments in building ACO capabilities, to be repaid through gain sharing rewards in subsequent years
  • Reduce the up front investment needed by eliminating the requirement for meaningful use of electronic health records
  • Reduce the number of quality measures from 65 to 33
  • Allow providers to choose from a number of available start dates throughout 2012
  • Allow community health centers and rural health clinics to serve as ACOs
  • Prospective identification of the Medicare beneficiaries for whom the ACO will be held accountable, rather than deriving such care relationships after the accountability period
  • Eliminates the mandatory anti-trust review for newly-formed ACOs
  • Puts the burden on the federal government, rather than nascent ACOs, to gather data regarding local market share
The  text of the rule is available here, and the associated final waiver rules are available here.

In my opinion, the elimination of the requirement to accept downside risk is likely to substantially increase the willingness of providers to participate in the program, while simultaneously reducing the likelihood that participation will lead to meaningful transformation of the care process within those participants.  But, given the strong opposition to the draft rule, CMS had little choice but to dilute the requirements to at least get some players to take the field.

 

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