Posted on October 31, 2011 by AMDR President Dan Vukelich:

After much anticipation, on October 20, the Centers for Medicare & Medicaid Services (CMS) released its final rules for Accountable Care Organizations (ACOs).  At 696 pages (or 267 pages longer than even the proposed rule), it will take some time for all the details to emerge.  But, in short, as Dr. Donald M. Berwick, CMS Administrator wrote in the New England Journal of Medicine on October 26, ACOs have three specific goals: “better care for individuals, better health for populations and lower cost growth through improvements in care.” Specifically, Dr. Berwick said that

“ACOs are voluntary groups of physicians, hospitals, and other health care providers that are willing to assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to them on the basis of patients’ use of primary care services.  If an ACO succeeds in both delivering high-quality care or improving care and reducing the cost of that care below what would otherwise have been expected, it will share in the savings it achieves for Medicare.”

At first glance, this simple concept seems…well, rather simple. So why are hospitals already struggling to strike a balance in the delivery of high-quality care at reduced rates? One cause can be attributed to the fact that most hospitals over the years have enjoyed the luxury of expendable resources, most of which have fallen under the category of “single-use” devices and products. But in today’s environment, hospitals are being forced to evaluate all aspects of their patient care models, including their supply chain practices.

One solution, currently employed by over 3,000 hospitals across the U.S., is the practice of implementing a medical device reprocessing program, which for years has allowed hospitals and surgery centers to optimize allocations of constrained resources.  By employing the services of an FDA-regulated, third party reprocessor, hospitals across the country are able to offer their doctors and clinicians the medical devices they are accustomed to using, at half the cost – and significantly reduce the amount of medical waste they generate (which, incidentally, also saves hospitals money).

With the publication of these final ACO rules, the Association of Medical Device Reprocessors (AMDR) believes reprocessed devices will play an even more instrumental role moving forward.  Yes, many hospitals in the country are already reprocessing on some level – but that’s just the tip of the iceberg.  It is AMDR’s understanding that pursuant to the “shared-savings” (financial incentives) provisions of the ACO rules, doctors could also expect to be rewarded for the savings generated by their affiliated hospitals, which an initial analysis of the rules by Modern Healthcare revealed “CMS also increased the amount of bonuses that providers may earn…once providers clear a savings target, the CMS agreed to share savings earned from the outset.” When you combine that with the fact that today’s third-party reprocessors save America’s hospitals hundreds of millions of dollars per year, – a number that AMDR believes could skyrocket to $2-3 billion per year if reprocessing programs were fully maximized – it can only translate into positive results for the ACOs that choose to utilize reprocessed medical devices in its supply chain.

Additionally, AMDR submitted comments in response to CMS’ proposed ACO rules, which we encourage you to check out HERE.

Still a bit skeptical, or perhaps overwhelmed?  You’re not alone.  But be advised, the world of healthcare is changing and it will require providers to be more accountable for quality and costs.  HealthLeaders reported on October 24 that ACOs may still be a “tough sell” to many hospitals.  Many institutions simply aren’t far enough along with integrating ACO or ACO-like infrastructures to their clinical programs.  But David Spahlinger, MD, an internist and senior associate dean at the University of Michigan, told HealthLeaders that, “My first selling point is there is a non-risk option for you to gain some experience without significant downside….  Yes, you might have to make some significant investments.  But the world is heading in this direction and we are going to be more accountable for the quality and the cost of the care we deliver.”

To see what others are saying about the release of these new ACO rules, check out AMDR’s post on  And check back often.  The AMDR/Squire Sanders-sponsored forum will be providing more details and on-going analysis of ACOs  For the latest in reprocessing news, check AMDR at

Click Here for Original Posting on

Be sure to check out and for all the latest news surrounding third party reprocessing!