Accountable Care Organizations and Waivers for Shared Savings Regulations for Medicare Announced

October 26, 2011

 

On October 20, 2011, the Department of Health and Human Services (HHS) issued its final rule on Accountable Care Organizations (ACOs). The Centers for Medicare Services (CMS) and HHS Office of Inspector General (OIG) also jointly issued an Interim Final Rule on Medicare waivers related to the Shared Savings Program.

Accountable Care Organizations (ACOs) Final Rule

Following receipt of 1,300 public comments on the prior proposed rule, the final regulation reflects the following changes from the proposed rule:

• Eliminates the requirement that 50 percent of primary care doctors be meaningful users of Electronic Health Records (EHR), but scores participation with a higher quality weight to emphasize its importance. 
• Fewer quality measures and domains are required.
• Two tracks (carrot-only and carrot-and-stick) are offered for ACOs at different levels of readiness, with Track 2 providing more risk, but higher sharing rates.
• Increased participation of Rural Health Clinics and Federally Qualified Health Centers where specialists provide primary care.
• Multiple start dates in 2012. 

In addition, under the ACO final rule, health care professionals will have new options to coordinate and improve the delivery of health care.

The rule:

1. establishes a new voluntary Medicare Shared Savings Program. A key element of the Patient Protection and Affordable Care Act, the Shared Savings Program has a three-pronged aim: to deliver better care for individuals, improve the health of populations and lower growth in Medicare Parts A and B expenditures.

• Health care professionals who join an ACO and meet measurable quality standards (e.g., patient experience, care coordination and patient safety, preventive health, and caring for at-risk populations) may share in any savings they achieve for the Medicare program. The higher the quality of care delivered and the greater the care coordinated, the more savings they are allowed to keep.

2. introduces a complementary program to assist with testing the Advance Payment model, which will offer additional support to rural and doctor-owned health care professionals in the Shared Savings Program. Payments will be advanced to help them build infrastructure (e.g., staff or information technology) to create an ACO. Payments will later be recouped from any savings they achieve.

It also includes an attribution rule, explaining how the population is defined to be aligned with the ACO.

Both the Medicare Shared Savings Program and Advance Payment model create incentives for health care professionals to work together to treat an individual patient across care settings, including doctors’ offices, hospitals, and long-term care facilities.

Cigna’s Perspective

Many are wondering what this means for delivery system enthusiasm for the ACO concept.

We feel that while CMS made an effort to address many of the concerns, it is too early to tell the reaction. We will be monitoring that closely, especially over the next several weeks.

We’ve also been asked to compare and contrast our CAC with the final rule. Below is a synopsis.

• The initiatives are aligned in overall intent: reward health care professionals for achieving the 'triple aim:" better quality, better health care experience, better cost.
• The Cigna CAC initiative goes beyond financial incentive alignment and includes Cigna as an active, value added partner: we provide information to the practices and connect the practices with our more than 3,000 health coaches.
• The Cigna CAC initiative does not require a formal legal organization including the principal providers of care to the population of interest. Rather, we work with primary care physician and multispecialty groups as well as integrated delivery systems.
• We focus on the physicians who hold the power of the order pen — even when working with integrated delivery systems, our focus has been on the physician group for good reason: there is more impact from avoiding a readmission, which requires medical group outpatient care coordination, than there is from a minor reduction in length of stay.
• We have less regulation; we simply require that the groups either have National Committee for Quality Assurance (NCQA) Patient Centered Medical Home designation or are on track to receive it or its equivalent.
• We currently have 10 active initiatives and anticipate approximately 30 by mid-2012.

Learn more about our approach by reading our CAC White paper. Visit healthcare.gov to read the final rule Fact Sheet, and the Federal Register to read both papers.

Medicare Waivers Related to the Shared Savings Program Interim Final Rule

The agencies announced that if an ACO uses the same governance, leadership structure, and clinical and administrative processes to qualify for and participate in the Shared Savings Program, they will assess whether its activities are legal under antitrust laws using the same “rule of reason” approach that is applied in assessing conduct in the commercial market. Under the “rule of reason” approach, instead determining whether there is a per se violation of anti-trust law, the pro-competitive business effects are weighed against the anti-competitive consequences to determine whether antitrust laws have been violated.

In addition, the Antitrust Policy Statement outlines an accelerated process that ACOs can use to obtain further guidance about their antitrust concerns.  For more details, visit the Federal Trade Commission  and the Justice Department websites.

There is also a 60-day comment period.

Additional Resources

Interim Final Rule with Comment Period in connection with the Shared Savings Program waivers.

Antitrust Policy Statement