Trudy Whitehead, Clinical/Technical Editor
Accountable care organizations (ACO) will be happy to learn that changes in the final rule on the Medicare Shared Savings Program for ACOs were crafted to encourage participation and give ACOs time to acclimate themselves to the program before having to take on too much risk.
The final rule was published in the Federal Register November 2, 2011, with an effective date of January 3, 2012.
Under the Shared Savings Program, participating ACOs can share up- and down-side risk with Medicare, meaning they can share in any savings as well as any losses they generate for the program. The greater the risk, the greater the potential reward—ACOs accepting responsibility for losses as well as savings stand to share up to 60 percent of any savings they realize, as opposed to 50 percent for those accepting only up-side risk.
In the final rule, the Centers for Medicare and Medicaid Services lists 13 notable modifications from the proposed rule published last spring. We will discuss just the first few (to access the complete final rule with detailed explanations of all 13 changes above, go here).
- Multiple start dates in 2012
- Longer agreement period for those starting the program in 2012
- Offering of a risk option with no down-side risk for the first contract period as well as first-dollar sharing
- More streamlined quality performance standards
- More flexibility in timing repayment of losses
- More flexibility in the governance and legal structure of ACOs
- Greater flexibility in the eligibility requirements for participation
- Increase in the financial incentives to participate
- Higher caps on the amount ACOs can share in savings and losses
- Removal of a 25 percent withholding of shared savings
- Greater flexibility in timing the evaluation of shared savings
- More flexibility in antitrust review
- Additional options for federally qualified health centers and rural health clinics that want to participate
CMS has set two starting periods for program participation in 2012. ACOs could submit applications for the first starting date (April 1) from December 2011 through January 20, 2012. For the second starting date (July 1), ACOs can submit applications from March 1 through March 30, 2012.
Because the starting dates fall toward the middle of the year, CMS has decided that the length of the first-year of participation will actually be 21 months for those with an April 1 start date and 18 months for those starting in July. The first three years of the program will end for everyone in December of 2015. This longer initial participation period provides what CMS describes as an “on ramp” to the program that allows participants time to get their footing and solve any problems with their operations.
To further encourage participation, CMS has eliminated the requirement that ACOs choosing to share only in savings, not in losses, can do so only for the first two years of the initial three-year participation period. ACOs can now avoid down-side risk all three years. Plus, they now can share in any savings they generate, starting with the first dollar. The proposed rule set a minimum percentage of savings ACOs had to meet before the sharing formula kicked in.
Commenters to the proposed rule complained about the large number of quality measures—65 in total—for which ACOs would be responsible. Those measures have been reduced to 33 to lessen the burden on participants. Further lightening the load is CMS’s elimination of the requirement that physicians in qualifying ACOs be “meaningful” users of electronic health records (EHR).
Applications for participation in the Medicare Shared Savings Program can be found here. |