Finance

Medicare ACO Final Rules Released

November 2, 2011:

In today's Federal Register CMS published a final rule to support the creation of Medicare Accountable Care Organizations (ACOs) and an interim final rule that outlines its proposed waivers of shared savings arrangements as they relate to federal anti-kickback laws. An overview by Lawrence Goldberg, senior advisor for healthcare legislative and regulatory matters, Grant Thornton, is also available.

While much of the regulation is still controversial, the final rule positively responds to industry concerns about ACO management and administration in several ways.

• Patients will assigned to ACOs based on historical claims activity rather than after the fact, and ACOs will get quarterly updates on beneficiary activity so they have a better understanding of which patients will be included in their counts of costs and savings. Beneficiaries, however, retain complete provider freedom of choice.
• CMS changed several aspects of shared saving proposals, allowing all ACOs to share in “first-dollar” savings, removing the automatic 25 percent withhold of any bonus payment, removing IME and DSH payments from benchmark savings targets and spending estimates, and removing the risk of program losses in the third year of a contract with a track-one ACO.
• CMS will moderate requirements for electronic health record (EHR) meaningful use, ACO marketing guidelines and governance, and it reduced the required reportable quality measures by more than half.
• CMS will also allow limited up-front payments to some, relatively smaller organizations to assist with the high cost of creating an ACO.

Finally, in the related interim final rule, CMS and the Office of Inspector General proposed waivers from the Anti-Kickback Statute, the Physician Self-Referral (so-called Stark) Law and the Civil Monetary Penalty Law.

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