Federal News: Medicare accountable care organizations addressed in CMS final rules
The Centers for Medicare and Medicaid Services (CMS) has expanded medical providers options to work in accountable care organizations (ACOs), to better coordinate patient care, and to deliver high quality, more cost-effective care. A final regulation and a notice is scheduled be published in the November 2 Federal Register.
The Patient Protection and Affordable Care Act (ACA) created ACOs, in which provider participation in an ACO is entirely voluntary. In addition, an interim final rule also to be published on November 2 provides waivers in connection with the Shared Savings Program.
ACOs are part of the traditional Medicare fee-for-service program in which beneficiaries may choose to obtain services from any provider. Whether an ACO is responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization. A provider in an ACO may not require a beneficiary to obtain services from another provider or supplier in the same ACO.
The November 2 guidelines implement initiatives for bundled payments for care improvement and for comprehensive primary care that offer alternatives to coordinate and improve health care, as follows:
The Medicare Shared Savings Program will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients. Providers who band together through this model and who meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program. The higher the quality of care providers deliver, the more shared savings the providers may keep.
The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems. The advanced payments would be recovered from any future shared savings achieved by the ACO.
Medicare Shared Savings Program. Studies have shown that better care often costs less, because coordinated care helps to ensure that the patient receives the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors, CMS noted.
The final rule requires each provider in an ACO to notify the beneficiary that the beneficiarys claims data may be shared with the ACO at the ACOs request. This data sharing is intended to make it easier to coordinate the beneficiarys care. The provider must give the beneficiary the opportunity to decline the data sharing arrangements. For Medicare beneficiaries who choose not to decline the data sharing arrangement, the final rule limits data sharing to the purposes of the Shared Savings Program and requires compliance with applicable privacy rules and regulations, including the provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
In the final rule, the list of medical providers and suppliers eligible to participate independently in the Shared Savings Program and to establish ACOs has been expanded to include certain critical access hospitals, federally qualified health centers, and rural health clinics.
Any Medicare enrolled provider or supplier in good standing may participate in an ACO, however they may not be used for purposes of assigning patients to the ACO, the rules asserted.
The ACA also requires each ACO to establish a governing body representing ACO providers of services and suppliers and Medicare beneficiaries. The final rule requires each ACO to be responsible for routine self-assessment, monitoring, and reporting of the care it delivers, and to use the information to continually improve the care delivered to their Medicare beneficiaries.
To be eligible to participate in the Shared Savings Program, an ACO must agree to accept responsibility for at least 5,000 Medicare fee-for-service beneficiaries. The final rule requires a prospective Medicare ACO to complete an application providing the information requested by CMS, including how the ACO plans to deliver high quality care and lower the growth of expenditures for the beneficiaries it serves. If the application is approved, the ACO must sign an agreement with CMS to participate in the Shared Savings Program for a period of at least three years. An ACO will not be automatically accepted into the Shared Savings Program, CMS emphasized.
Monitoring Performance. The final rule outlines CMS plans for monitoring ACOs to ensure their compliance with eligibility and program requirements. The monitoring plan includes analyzing claims and specific financial and quality data as well as the quarterly and annual aggregated reports, performing site visits, and performing beneficiary surveys. Monitoring also may include audits if necessary.
Under the final rule, CMS may terminate the agreement with an ACO under a number of circumstances, including failure to comply with eligibility and program requirements, avoidance of at-risk beneficiaries and failure to meet the quality performance standards.
Medicare will continue to pay individual providers and suppliers for specific items and services as it currently does under the fee-for-service payment systems. As required in the final rule, CMS will develop a benchmark for savings to be achieved by each ACO if the ACO is to receive shared savings or for ACOs that have elected to accept responsibility for losses. The amount of an ACOs shared savings or losses depends on its performance on quality standards.
The final rule establishes quality performance measures and a methodology for linking quality and financial performance, setting a high bar for ACOs on delivering coordinated and patient-centered care. The performance measures emphasize continuous improvement around the three-part aim of better care for individuals, better health for populations, and lower growth in expenditures, CMS explained. ACOs must have in place procedures and processes to promote evidence-based medicine, beneficiary engagement, and coordination of care. Furthermore, ACOs must report quality measures to CMS and give timely feedback to providers for continual improvement of care to beneficiaries. To assure program transparency, the final rule requires ACOs to publicly report certain aspects of their performance and operations and CMS to publicly report certain quality data.
Under the final rule, an ACO that meets the programs quality performance standards will be eligible to receive a share of the savings if its assigned beneficiary expenditures are below its own specific updated expenditure benchmark The final rule also would hold certain ACOs accountable for sharing losses by requiring ACOs to repay Medicare for a portion of losses (expenditures above its updated benchmark). To provide an entry point for organizations with varied levels of experience with and willingness to share losses, the final rule allows an ACO to choose one of two program tracks. The first track allows an ACO to operate on a shared savings only arrangement for the duration of their first agreement. The second track allows ACOs to share in savings and losses for the duration of the agreement, in return for a higher share of any savings it generates.
Under the ACA, the Shared Savings Program must be established no later than Jan. 1, 2012. The final rule establishes the program and states that CMS will start accepting applications from prospective ACOs shortly after Jan. 1, 2012.
Advance Payment Model ACO. The November 2 notice on the Advance Payment ACO Model announces the testing of the Advance Payment Model for certain ACOs participating in the Medicare Shared Savings Program scheduled to begin in 2012, and provides information about the model and application process.
Under the Advance Payment ACO Model, participating ACOs will receive three types of payments:
- an upfront, fixed payment;
- an upfront, variable payment based on the number of the ACOs historically-assigned beneficiaries; and
- a monthly payment of varying amount depending on the size of the ACO and on the number of its historically-assigned beneficiaries.
The Advance Payment Model is designed to provide support to organizations whose ability to achieve the three-part aim would be improved with additional access to capital, including rural and physician-owned organizations. This particular ACO Model is open only to the following two types of ACOs participating in the Shared Savings Program:
- those that do not include any inpatient facilities and have less than $50 million in total annual revenue; and
- those in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals and have less than $80 million in total annual revenue.
Shared Savings Waivers. Also to be published in the November 2 Federal Register is a joint CMS and Department of Health and Human Services (HHS) Office of Inspector General (OIG) interim final rule with comment period addressing waivers of certain fraud and abuse laws in connection with the Shared Savings Program.
This interim final rule establishes waivers of the application of the Physician Self-Referral Law, the Federal anti-kickback statute, and certain civil monetary penalties law provisions to specified arrangements involving ACOs in the Shared Savings Program, including ACOs participating in the Advance Payment Initiative.
The regulations are scheduled to be effective on November 2.
Comments on the interim final rule must be received 60 days after the date of publication of the interim final rule in the Federal Register. Comments, which should include file code CMS-1439-IFC, should be sent electronically to www.regulations.gov. For more information, visit www.ofr.gov