ACO Final Rule Changes: What They Mean for Medical Practices

The final Accountable Care Organizations Rule contains many changes welcomed by physicians, medical associations and HIMSS members alike because the ACO model offers a promise to improve care coordination and quality of care while reducing the overall costs. The Centers for Medicare and Medicaid Services released this series of Notices of Proposed Rule Making draft regulations on the ACOs in April 2011 and the Final Rule in October 2011.  Here is a link to CMS information: Accountable Care Organizations under the CMS Medicare Shared Savings Program

Below are a few noted changes in the final rule that are of particular note for physicians and medical practices:

• A governing body made up of at least 75% of its participants, deemed as a legal entity, will manage all ACOs.
• ACO assignment – CMS will employ a stepwise approach as the basic assignment methodology.
  • Beneficiaries will be first assigned to ACOs on the basis of use of primary care services provided by primary care physicians.
  • Those beneficiaries who are not seeing any primary care physician may be assigned to an ACO on the basis of primary care services provided by other physicians. CMS has now allowed consideration of all physician specialties in the assignment process in the final rule
• The final rule allows ACOs a risk and payment structure that should allow participation by all physicians practice regardless of size.
• ACOs will now share in every dollar of cost savings; the rule includes an option that limits financial risk, which is important for many physician practices.
• Physician practices will also benefit from the new advanced payment initiative created through the Centers for Medicare and Medicaid Innovation to provide financial assistance for physician-owned organizations.
  • The initiative would help small practices and rural community hospitals with upfront implementation costs.
  • The program is committing $170 million for ACOs in 2012.
• A new rolling application process will allow more time for practices to prepare for ACO enrollment.
• CMS removed the requirement that 50% of primary care physicians in an ACO must be ‘meaningful users’ of electronic health records. However, CMS continues its strong support for the adoption and use of EHRs as a critical component to successful ACO care coordination by doubling the value of the EHR quality measure.
• The Quality measures from the proposed rule have been reduced from 65 to 33, with a more gradual ramp-up from pay-for-reporting (year one) to pay for performance (phased in over years two and three).
• Greater financial incentives would offer ACOs greater opportunity for capital investment for infrastructure, including information technology requirements to support the ACO.

The ACO final rule Federal Trade Commission and Department of Justice made changes to their antitrust statement on Medicare ACOs. These important changes will significantly lower the administrative burden and cost for potential ACOs to comply with the antitrust rules.

• This should lower the administrative burden and cost for potential ACOs to comply with the antitrust rules.
• Removal of the requirement for mandatory review and clarification that all collaborations among independent providers, including those that existed before March 23, 2010, are covered by the statement. 

In addition, CMS and the Office of the Inspector General will also expand the waivers of certain Medicare laws for ACOs.

Questions from physicians and practice staff should go to aco@cms.hhs.gov to reach CMS.

HIMSS has provided numerous resources and tools for the industry and our members  available on the HIMSS website.  In addition,  HIMSS continues to monitor ACO development, use and its impact on HIMSS’ members.

For more information, please contact me at mgriskewicz@himss.org or via the HIMSS Blog.