CMS Seeking Input on the Establishment of ACOs

About ACOs An Accountable Care Organizations (ACO) consists of groups of providers who agree to work together to manage and coordinate the care of Medicare beneficiaries. They will be jointly accountable for achieving measured quality improvement and reductions in the rate of spending growth. ACOs are required to have primary care physicians caring for at least 5,000 Medicare beneficiaries and have the ability to report data on cost, quality and overall patient care experience for Medicare beneficiaries. Participating groups must agree to enroll for at least three years and demonstrate the legal structure that permits them to receive payments for shared saving from CMS and distribute a portion of those payments to the groups of providers. The shared savings would be generated when the group provides care to beneficiaries for less than a Medicare benchmark cost while also meeting criteria for patient service and quality of care.

While the proposed regulations on ACOs is expected to be released in early 2011, CMS is currently seeking input from all stakeholders on various aspects of ACOs. On October 5, 2010, the Centers for Medicare and Medicaid Services (CMS) and the Federal Trade Commission (FTC) held an event, Workshop Regarding Accountable Care Organizations, and Implications Regarding Antitrust, Physician Self-Referral, Anti-Kickback, and Civil Monetary Penalty (CMP) Laws. Learn more about this workshop, or view agenda and participants » (PDF, 41K)

The first panel reviewed potential ACO structures in different health care markets and how these models may affect the prices and the quality of health care delivered to privately insured consumers, as well as to Medicare and Medicaid beneficiaries.

The second panel discussed antitrust, physician self-referral, anti-kickback, and civil monetary penalty considerations associated with the various ACO models, and whether safe harbors, exceptions, exemptions, or waivers from these laws may be warranted.

Physicians, physician associations, hospitals, health systems, payers, and consumers provided their feedbacks on these topics during the public comment period.

MedPAC meeting
The Medicare Payment Advisory Commission (MedPAC) will send a comment letter to CMS with recommendations on the requirements for ACOs. During the meeting, the Committee reviewed the following:

• MedPac Commissioners believes that patients should be informed that their primary care physician joins an ACO. They discussed whether the defaults option should be "opt-in". No recommendation was made during the meeting
• MedPac Commissioners discussed the potential set of quality metrics that would be considered when measuring the quality of care provided by ACOs. No recommendation was made during the meeting
• The Committee discussed if the 5,000 beneficiary requirement is high enough to measure efficiency and to manage care. No recommendation was made during the meeting
• While the law mandates a "bonus-only" model, the Commissioners also are looking at potential alternative models. They discussed the two-sided risk model. In the two-sided risk model, the providers will share the first dollars of saving with CMS if they are more cost efficient. However, they will also share excessive spending with Medicare if the ACO was not cost efficient during that year. They also discussed the potential establishment of risk corridors (i.e. limit to the excessive spending penalty to avoid large revenue swings for an ACO). No recommendation was made during the meeting. The government agencies will continue to discuss the requirement for ACOs in their future meetings

The Society staff will follow the discussions and update our members as the conversation evolves.