CMS Issues ACO Final Rule
November 4, 2011 – The long-awaited Final Rule for Medicare accountable care organizations (ACOs) (Section 3022 of the Accountable Care Act (ACA)) was published on October 20, 2011, establishing CMS’ definition of Medicare’s ACO and Shared Savings Program (SSP). CMS Administrator, Dr. Donald Berwick, stated that the proposed rule, issued on March 31, 2011, generated a “mountain” of comments (over 1,300) with hospitals and physician groups largely rejecting draft proposals as too risky and too demanding. High profile physician groups that tested an early model of accountable care declared the draft rules unworkable in a letter that said none would participate without significant changes.
In response to the highly critical comments, CMS revamped several important requirements of the program which have received praise from medical and hospital associations both for listening to the medical community andseven lessening financial risks for providers.
The following are seven (7) of the proposed rules that were revised in Final Rule and are effective January 3, 2012.
1. Change in Start Date and Longer Initial First Year Agreement Periods
PROPOSED RULE: Allowed for a once-a-year start date for the SSP, at the beginning of each calendar year, with the initial agreement period of 3 years. The initial start date was slated for January 1, 2012.
FINAL RULE: Allows more flexibility by allowing multiple start dates in 2012 and a longer first year period:
- Start date of April 1, 2012– agreement period of 3 performance years with the first performance year of the agreement consisting of 21 months OR
- Start date of July , 20121 – agreement period of 3 performance years with the first performance year of the agreement consisting of 18 months
- An ACOs first “performance year” could be 18 or 21 months as described above, but quality data will be collected on a calendar year reporting period basis. For these two performance years, data will be collected from January 1 – December 31, 2013.
2. ACO Participation Models
ACOs may still choose one of the two incentive options issued in the proposed rule, Track 1 (one-sided) or Track 2 (two-sided), with the following changes:
- Track 1 – Originally a shared-savings model for the first 2 years that would become responsible for losses in the third year. CHANGE: Shared-savings model for all 3 years of the first agreement period. There would be no penalties for any losses in the third year.
- Track 2 – The model remains the same, with ACOs facing penalties all 3 years if they perform over costs. This model reaps higher shared savings than Track 1.
- Finalized proposal to require all ACOs to participate in the two-sided model in agreement periods subsequent to the initial agreement period.
3. Shared Savings
PROPOSED RULE: In the proposed rule both the one-sided and two-sided models had to create a savings of at least 2 percent of their MSR (minimum savings rate) before receiving any shared savings.
FINAL RULE: The 2 percent net share has been eliminated, allowing all ACOs that achieve savings in excess of their MSR to share savings on a first dollar basis.
4. Withhold of Shared Savings For Offset of Future Losses
PROPOSED RULE: The ACO will be subject to a 25 percent withhold of shared savings in order to offset any future losses under the two-sided model and if an ACO terminates its agreement before the three-year requirement, CMS will retain any portion of shared savings withheld.
FINAL RULE: CMS rescinded both the 25 percent withhold to offset any losses and the provision to retain any portion of share savings withheld if the ACO terminates its agreement.
5. Assignment of Beneficiaries to an ACO:
PROPOSED RULE: Patients would be retroactively assigned to an ACO based on primary care utilization during a performance year
FINAL RULE: Medicare Beneficiaries will no longer be assigned to ACOs retrospectively but will be assigned in a preliminary manner at the beginning of a performance year based on the most recent data available. Assignment will be updated quarterly based on the most recent 12 months of data. Final assignment will be determined after the end of each performance year based on data from that year.
- Beneficiaries will first be assigned to ACOs on the basis of utilization of primary care services by “primary care” physicians (internal medicine, general practices, family practice, and geriatric medicine)
- Beneficiaries who are not seeing primary care physicians may be assigned to anACOon the basis of primary care services provided by another physician.
- Beneficiaries will only be assigned to oneACO.
6. EHR Meaningful Use Requirement
PROPOSED RULE: At least 50 percent of Primary-care Providers in ACOs must have earned EHR meaningful use designation by the second year of the initial agreement period.
FINAL RULE: The 50 percent EHR requirement has been eliminated and instead, CMS will retain one EHR reporting measure that rewards and encourages greater EHR use, which is the percent of primary care providers who successfully qualify for an EHR Incentive Program payment. This measure is weighted higher than other measures for quality-scoring purposes.
For now CMS will use survey, claims and administrative data based measures and the GPRO web interface as a means of ACO quality data reporting for certain measures. As providers adopt and gain more experience with EHR technology, CMS will reconsider using certified EHR technology as an additional reporting mechanism.
7. Quality Reporting Measures
PROPOSED RULE: ACOs had to report 65 quality measures under 5 domains
FINAL RULE: Quality measures were reduced from 65 to 33, or 23 scored measures when accounting for the patient experience survey modules scored as 1 measure and the ”all or nothing” diabetes and CAD measures scored as 1 measure each. The 5 domains have been reduced to 4 domains, with the elimination of the hospital safety domain.
- Patient experience
- Care coordination and patient safety
- Preventive Health
- Caring for at-risk populations
This measure set will be the starting point for ACO measurement, as CMS plans to modify measures in future reporting cycles to reflect changes in practice and quality of care improvement and continue aligning with other quality programs.
You may access this final rule through CMS’ website by clicking below:
Tags: Healthcare Reform
