In October of 2011, CMS released the much-anticipated final rule for the Medicare Shared Savings program. In this rule, Medicare defines an accountable care organization (ACO) as a legal entity recognized under state law made up of certified Medicare providers or suppliers. These providers work together to manage and coordinate care for a specific population of Medicare fee-for-service beneficiaries. ACOs must meet specific performance standards as well as reduce spending below a target amount to be able to receive shared savings.
In this program, ACO members share a goal to improve healthcare delivery and health status of the patients they serve as well as sharing the financial risk for failure to meet financial and quality targets.
The final rule relaxed several of the more problematic provisions of the proposed rule related to quality reporting. Originally, there were 65 measures proposed process, outcome, and patient experience-of-care measures organized across five domains. In the final rule, care coordination and patient safety domains were combined to”better align with other CMS value-based purchasing initiatives and the National Quality Strategy and to emphasize the importance of ambulatory patient safety and care coordination.”
Therefore, the final set of measures includes 33 measures in four domains:
1. Patient/caregiver experience;
2. Care coordination/patient safety;
3. Preventative health; and
4. At-risk population/frail elderly health.
Other measures, such as the Patient Registry Use measure, were removed since it is not a required, “core” measure in the EHR Incentive Program’s meaningful use criteria.
Certain measures for healthcare acquired conditions were also removed because of difficulties using hospital-reported measures based on aggregate, all payer data, as is the case with measures reported to the NHSN, particularly for ACOs that do not include hospitals.
In an effort to reduce the number of quality reporting measures and focus on higher impact measures, several other measures in the at-risk domain were eliminated. Overall, the final measures selected were “ a predominantly ambulatory care focus, consistent with the primary care focus of, and beneficiary assignment methodology used for, the Shared Savings Program. “
The final rule also relaxed the transition to pay for performance. The first year will be pay for reporting, but the second and third years will combine pay for reporting and pay for performance.
- There are a total of 48 points available across the four domains.
- Each domain is weighted equally and constitutes 25 percent of the overall score.
- Achievement above the 30th percentile will result in an award of additional quality points from the base level of one point up to a maximum of 2 points.
One measure, the percent of PCP’s that successfully qualify for an EHR incentive program, is double-weighted. Therefore, the maximum number of potential points is 4 for this measure. The aggregate number of total points scored by an ACO would be used to calculate the amount of shared savings they would receive.
The ACO must achieve a minimum quality standard, set as the 30th percentile of the national Medicare Fee for Service Providers in at least 70 percent of the required measures. This means that an ACO may fail one or more measures in a domain and still be eligible to receive shared savings. However, if the ACO fails to meet at least 70 percent of the measures in a domain, it will be given a warning and an opportunity to re-submit for evaluation the following year. If the ACO underperforms in the second year, its participation in the program would be terminated.
The final rule also addressed the problematic proposal for retroactive assignment of patients/beneficiaries. CMS had proposed to assign patients to the ACO that was responsible for the majority of the patient’s primary care services based on charges. This method was intended to ensure that ACOs provide similar care to all patients and to avoid the administrative burden that prospective enrollment would entail.
However, many providers were uncomfortable with being held accountable for managing a patient population that is not clearly defined. In the final rule, there will be a preliminary prospective-assignment method with beneficiaries identified quarterly with final reconciliation after each performance year based on patients served by the ACO.
A more detailed description of the final ACO program is available from CMS:
Also in December, CMS announced that 32 leading healthcare organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative.
The Pioneer ACO is an accelerated version of the original shared savings ACO program and designed specifically for groups of providers with experience working together to coordinate care for patients. These organizations had complained that the proposed ACO program was too limited in its design.
Selected Pioneer ACOs include physician-led organizations and health systems in 18 states that provide care for about 860,000 Medicare beneficiaries. The first performance period of the Pioneer ACO Model began Jan. 1, 2012.
The CMS Pioneer ACO Model FAQ explains how the Pioneer model differs from the Medicare Shared Savings Program:
- The first two years of the core Pioneer ACO Model are a shared savings payment arrangement with higher levels of savings and risk than in the Shared Savings Program.
- Starting in year three of the initiative, those organizations that have shown a certain minimum amount of savings over the first two years will be eligible to transition away from fee-for-service payment to population-based payment and full risk arrangements that can continue through optional years four and five. Population-based payment is a per-beneficiary per month payment amount intended to replace a significant portion of the ACO’s fee-for-service (FFS) payments with a prospective payments.
- Pioneer ACOs must negotiate similar outcomes-based payment arrangements with other payers by the end of the second year.
- Pioneer ACOs must generally be responsible for the care of at least 15,000 aligned beneficiaries (5,000 for rural ACOs)