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November 28, 2011

Final ACO rule and how it might affect physician practices

Physicians are not required to be meaningful users of electronic medical records (“EMR”) as a condition of participating in an ACO, although EMR is now a quality measure and is weighted higher than others. Essentially, CMS elected not to add an extra requirement to ACO participation, preferring instead to permit participating physicians to discover and decide for themselves how best to manage patient data and other information in order to provide coordinated care for their patients.

Allows prospective assignment of patients to ACO’s on a quarterly basis, rather than using a retrospective method for selecting patients to participate in an ACO, as had been originally proposed. In the Final Rule, prospective assignment of patients is permitted in order that physicians shall know in advance which patients are in an ACO, thereby enabling physicians and patients to partner together in order to better address health problems, both in terms of objectives and how to achieve them. In this regard, it should be noted that, according to the Final Rule, only persons enrolled in the Medicare fee-for-service program may be assigned to an ACO.

Eliminates participant risk in the first of the two (2) ACO shared-savings’ models. The Proposed Rule had required that, after the first two (2) years, an ACO choosing the one-sided model (i.e., shared savings among participants without any sharing of losses) would transition into the two-sided model (i.e., shared savings and losses) during the third year. However, the Final Rule provides for shared savings among the participants in the one-sided model during the entire initial agreement period with no sharing of losses in the third year. The two-sided model, where participants share savings and losses for the entire initial agreement period (the first “year” of the initial agreement for ACO’s starting in 2012 will be to 18 to 21 months) continues to include risk- or loss-sharing for participants, but also offers them larger potential rewards than they would have received under the Proposed Rule.

Reduces from 65 to 33 the number of quality measures ACO-participating physicians must report. The Proposed Rule required providers to report on 65 quality measures in five (5) categories so as to enable CMS to assess the quality of care furnished by ACO’s. In response to the comments it received – the majority of which favored utilizing fewer quality measures in order to reduce reporting burdens and attain more focused and meaningful improvements to the Medicare program – CMS reduced to 33 in four (4) categories the required number of quality measures subject to reporting. These categories are as follows: (i) patient/caregiver experience; (ii) care coordination/patient safety; (iii) preventive health; and (iv) at-risk population that includes subcategories of reporting requirements regarding the following disease states: diabetes, hypertension, ischemic vascular disease, and coronary artery disease.

Ensures that all ACO’s shall receive a share of any first-dollar savings generated to Medicare once a minimum amount of savings is achieved, known as the Minimum Savings Rate (“MSR”). The MSR is on a sliding scale, ranging from 3.9% for ACO’s with 5,000-5,999 beneficiaries to 2% for ACO’s with 60,000 or more beneficiaries.

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