Rhapsody Health Solutions Team

Final ACO Rule Issued to Mostly Sighs of Relief & Support

October 21, 2011

In a press announcement yesterday (October 20, 2011), the Department of Health and Human Services (HHS) issued the final rules for Accountable Care Organizations (ACOs), created by the Affordable Care Act. HHS Secretary Kathleen Sebelius stated:

“Today we have taken another step to improve health care for people with Medicare. 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.”
In the release, two initiatives were launched that help the formation of ACOs. The release outlined these two initiatives as:
  • The Medicare Shared Savings Program will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients. Providers who band together through this model and who 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 shared savings the providers may keep.
  • The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems. The advanced payments would be recovered from any future shared savings achieved by the Accountable Care Organization.
American Hospital Association (AHA) was quick to support the adjusted final rules, stating:
“In response to the concerns of the AHA and its hospital members, CMS made significant changes to the financial model, provided more flexibility in the assignment of beneficiaries and took a second look at the quality framework. We believe today’s menu of ACO options allows America’s hospitals to create new models of accountable care organizations on which the transformation of health care delivery is so dependent.”
In a
Healthcare IT News article
“Final rule eases ACO regulations, lifts EHR requirements” – the following changes were outlined:
  • In the proposed rule ACO requirements were to be aligned with EHR requirements, by stipulating that “50 percent of primary care physicians must be defined as meaningful users by start of second performance year.” The final rule has eased this burden by making it “no longer a condition of participation,” and instead has “retained EHR as a quality measure but weighted higher than any other measure for quality-scoring purposes.”
  • The final rule requires 33 measures in four domains, instead of 65 measures in five domains required by the proposed rule.
  • The final rule makes the one-sided model truly one-sided. It still offers two tracks for “ACOS at different levels of readiness, with one providing higher sharing rates for ACOS willing to also share in losses.”
  • The final rule expands participation to Rural Health Clinics and Federally Qualified Health Centers and organizations where specialists provide primary care.
  • The final rule provides a more a flexible starting date in 2012.
Although providers seem to be satisfied with the new regulations, employers and insurers were less than pleased. The American Benefits Council, which represents employers, stated:
“The final rule includes a clear recognition that not all ACOs will benefit consumers and reinforces that existing antitrust rules will be vigorously enforced. But words alone will not be sufficient to ensure that consumers and purchasers are protected from unjustified price increases, lower quality care or restricted access to health care providers and services.”
(Council President James Klein)
The next phase of new regulations and changes to our US healthcare system are moving forward, and it essential to keep current in order to adjust workflow and health IT initiatives to meet the new operating guidelines.
Additional resources to read:

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