von Briesen Health Law Blog

“The Administration has led an unprecedented, collaborative effort among all of the agencies responsible for developing guidance for ACOs,” said FTC Chairman Jon Leibowitz. “This guidance will help ensure that ACOs meet their goals of improving quality and lowering costs while minimizing the regulatory burden on healthcare providers.”

As the Chairman notes, the agencies responsible for development and oversight of Accountable Care Organizations (“ACOs”) issued on March 31, 2011 guidance regarding qualification and implementation of Medicare Shared Savings Programs. This Update provides summaries of the proposed rules offered by the Centers for Medicare & Medicaid Services (“CMS”)/Department of Health and Human Services Office of Inspector General (“OIG”) and Federal Trade Commission (“FTC”)/Antitrust Division of the Department of Justice (“DOJ”) and the notice issued by the Internal Revenue Service (“IRS”) all of which address ACOs.  The agencies will accept public comments until May 31, 2011.

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On March 31st the Centers for Medicare and Medicaid Services (“CMS”) released its proposed rule to establish the Medicare Shared Savings Program (the “Shared Savings Program”). The rule will be published in the Federal Register in the next few days. CMS will accept comments on the proposed rule for a period of 60 days after publication in the Federal Register, and will respond to comments in a final rule to be issued later this year. At the heart of the Shared Savings Program is the development of Accountable Care Organizations (“ACOs”) to bring together providers and suppliers in an effort to coordinate care for Medicare fee-for-service (“FFS”) beneficiaries. To participate in the Shared Savings Program, ACOs must submit an application, and if approved, enter into a three year agreement with CMS to be accountable for the quality, cost and overall care of at least 5,000 traditional FFS Medicare beneficiaries who may be assigned to it. The Shared Savings Program will begin operating on January 1, 2012.

Proposed Rule Key Concepts and Issues

•      Proposed regulations will be published in the Federal Register on April 7.

•     Participation requires 3 year agreement with early termination forfeiture.

•     Proportionate representation and 75% control of governance required for ACO participants which may include hospitals, physicians and other providers.

•     Involvement of Medicare beneficiaries and community stakeholders required.

•     Detailed and potentially onerous application, operation and reporting requirements.

•     Retrospective and prospective assignment of beneficiaries based on primary care physician.

•     Beneficiaries may opt out of data sharing, but quality of services and coordination of care may not decline.

•     Two track shared savings model to encourage early participation in program.

•     Comments to proposed rule due by Monday, June 6.

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