The following post was written by Chase Matson (AMDR)  for the Accountable Care Forum blog, appearing October 28, 2011:
 

When we published last week’s blog post, MEDICARE ACO RULES NEAR FINAL HURDLE, we knew it would only be a matter of time before CMS released its final ACO regulations. Sure enough, only two days later, CMS officially published their long-anticipated rules, ending months of speculation surrounding one of the cornerstone provisions of President Obama’s Patient Protection and Affordable Care Act. Here is a sampling of the buzz-worthy articles that best encapsulate these hot new HHS regulations:

“CMS is making several significant changes in its final rule to strengthen the ACO program for providers and beneficiaries alike (see table). Major changes include providing better, and more timely, information to ACOs at the outset of the performance year through preliminary prospective alignment of beneficiaries (while retaining a retrospective reconciliation to ensure that ACOs are measured on the basis of the patients they actually care for during the year); retaining a strong monitoring and quality-measurement mechanism while streamlining the metrics to focus on what matters most, including reducing the total number of quality measures by about half; allowing start-up ACOs to choose a “savings only” track without financial risk during their initial contract period; sharing savings with successful ACOs on a “first dollar” basis when the ACO achieves meaningful savings for the Medicare program and improves care or provides high-quality care; and creating a pathway for full participation of federally qualified health centers and rural health clinics that provide a primary care safety net for Medicare beneficiaries in underserved areas.”

“Today, most hospitals and doctors get paid more by delivering more, not necessarily better, care. ACOs will reward providers for holding down costs and meeting certain quality measures, such as reducing hospital readmissions or emergency room visits. In many ways, ACOs aim to replicate the much touted models of care at the Mayo Clinic in Rochester, Minn., and the Geisinger Health System in Pennsylvania, where hospitals and doctors coordinate their efforts within the same organization.”

  • HealthLeaders Media released an array of initial industry feedback in ACO Final Rule: 10 Healthcare Leaders Sound Off, including one comment by Neil Kirschner, senior associate for regulatory and insurer affairs with the American College of Physicians, that struck a perfect balance of confidence and caution with the final ACO rule:

“CMS went as far as it could to make the ACO as attractive as possible for physician participation. I can’t remember a time when CMS has been so responsive. 
The risk-free track, elimination of the electronic health record requirement, the first dollar payment after the lower cost threshold is reached, “and the change from retrospective to prospective assignment make it easier for ACOs to keep track of how they’re doing and better respond to the needs of their patients.
These changes, will make it more likely providers will consider forming an ACO, and I believe more actually will, but you have to remember that this is not for the faint of heart; There is still a great deal of capital and infrastructure requirement.”

  • Fierce Health Care included the CMS chart comparing proposed vs. final rules inProviders Cheer ACO Final Rule: Reactions to the Revised Cut and included responses from – among many others – the  American Hospital Association, American Medical Association, Association of American Medical Colleges, American Association of Retired Persons, and the following from the Campaign for Better Care:

“We are very pleased that this final rule will require ACOs to adhere to strong patient-centered criteria, use beneficiary experience of care measures to evaluate performance, and ensure full transparency, notification and choice for beneficiaries,” Campaign for Better Care Leader Debra L. Ness said in a statement yesterday. “This new rule is not perfect, but it provides a path away from the broken, dysfunctional health care system we have today toward a system that offers higher quality, better coordinated and more patient-centered care.”

Ann-Marie Lynch, executive vice president of the Advanced Medical Technology Association, said the association was “concerned the rule does not address the very real danger of slowing the development of new treatments and cures. 
“The failure to consider how innovative products play an important role in improving patient care threatens medical progress for current and future patients,” she said. “Without certain design elements, the ACO program may have the effect of limiting treatment options and discouraging physicians from adopting new advancements in care.”

  • And rounding out the list is Modern Healthcare’s optimistic outlook Final ACO Regs Include Bigger Bonuses, which focused on incentives offered under the new rules for ACOs and  affiliated providers:

“As proposed in March, ACOs may choose one of two incentive options under the final rule. However, providers no longer face possible penalties under both options. Previously, providers that failed to achieve quality and savings targets could be at risk for penalties either for one year or three years, depending on the option. The CMS eliminated the possible one-year penalty under the final rules. 
The CMS also increased the amount of bonuses that providers may earn. Now, once providers clear a savings target, the CMS agreed to share savings earned from the outset. Previously, providers were eligible to share savings after the first 2% in cost-reductions.”

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