ACO Final and User Friendly Rule Released. Here Are The Most Important Changes

When CMS came out with the proposed regulations for Accountable Care Organizations (ACOs) in March of 2011, the Disease Management Care Blog shared in much of the provider community consternation over just how unwieldy the Feds were being.  The promise of integrated, coordinated and cost-effective care provided by hospital-physician networks had run into the reality of having to invest millions dollars with a questionable ROI, a complex maze of up and downside risk calculations, reams of burdensome quality measures and overlawyered antitrust regulations.   

Well, CMS listened to 1320 comments and, in response, released a more user-friendly "final rule" today.  While the DMCB is still tracking down and mulling over the myriad details, it found the best review of the modifications in this table appearing online in the New England Journal of Medicine. 

Changes that caught the DMCB's eye:

The 1st of the two "Tracks" will not have any downside risk in the 3rd year.  Two-sided risk remains in Track 2 (ACOs will still need to invest millions in care coordination infrastructure, but at least they won't have to cover CMS's downside risk if they fail to control utilization).

No 25% withhold of the shared savings (This was the amount that the Feds were going to hold in escrow just in case the ACOs' financial performance deteriorated).

Instead of the providers having to hit a 2% savings before getting any money, shared savings kicks in once the "minimum savings rate" is achieved (This is a significant concession by CMS.  The DMCB recalls the MSR is a savings target that is based on statistical significance)

Assignment of beneficiaries will be prospective, not retrospective (Likewise a concession and good news, since the ACOs will know who is in their target population that represents their risk).

Instead of 65 quality measures, there are 33 (see page 324 of the rule linked above) and the first year will involve reporting only, not performance (While managing to 33 measures will still be a challenge, this is a vast improvement)

ACO agreements start on April 1, 2012 and can continue throughout the year (It was pretty obvious that CMS was not going to make the January 1 deadline, but getting an ACO in place in 6 to 12 months will still be an uphill battle for many delivery systems).

Prior clearance by a "reviewing antitrust agency" will not be necessary, but that doesn't mean that ACOs aren't subject to antitrust law; they may want to submit to an expedited antitrust review (Given the stakes, the DMCB suspects all ACO participants will still want to lawyer up on this).

According to this press release, CMS will also make financial support available to physician- owned as well as rural providers.

The DMCB's first reaction is that CMS has done a good job of modifying its unworkable proposed rule.  It will take several days for the DMCB's sources to give it feedback.

Stay tuned!