CMS Issues Rule Describing Standards ACOs Must Meet

The federal Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule governing the nature and function of "accountable care organizations (ACOs)," including performance measures that the organizations would be required to meet.

ACOs are a model for coordinated delivery of medical care within a reformed health care system and were designated for a demonstration project in the Patient Protection and Affordable Care Act signed by President Obama last year. The project is known as the Medicare Shared Savings Program.

Generally, ACOs are coalitions of physicians and hospitals responsible for coordinating medical care for populations of patients across the continuum of care; they agree to be accountable for improving the health and experience of care for individuals, as well as the health of populations, while reducing the growth rate in health care spending.

Under the Shared Savings Program, participating ACOs that meet performance measures would share in those savings, while those that fall short could be liable for financial penalties. According to the proposed rule issued by CMS, a physician participating in an ACO would be required to notify a beneficiary that he or she is participating in an ACO and that the physician will be eligible for additional Medicare payments for improving the quality of care the beneficiary receives while reducing overall costs or may be financially responsible to Medicare for failing to provide efficient, cost-effective care. The beneficiary may then choose to receive services from the provider or seek care from another provider that is not part of the ACO.

The CMS Web site has a page devoted to the Shared Savings Program, <www.cms.gov/sharedsavingsprogram>.

In the proposed rule, CMS outlined 65 performance measures for establishing the standard ACOs must meet under the Shared Savings Program. The 65 measures span five quality domains: patient experience of care, care coordination, patient safety, preventive health, and at-risk population/frail elderly health. Included in the preventive-health domain is a measure for depression screening.

The health reform law specifies that an ACO may include the following types of groups of providers and suppliers of Medicare-covered services:

The lengthy proposed rule, published in the Federal Register on April 7, spells out numerous regulations governing the makeup and operation of ACOs. For instance, to participate in the Shared Savings Program, an ACO would have to complete an application providing information on how the ACO plans to deliver high-quality care at lower costs for the beneficiaries it serves. The ACO must agree to accept responsibility for at least 5,000 beneficiaries. If the application is approved, the ACO must sign an agreement with CMS to participate in the Shared Savings Program for three years. An ACO will not be automatically accepted into the Shared Savings Program.

ACOs that meet the program's quality-performance standards would be eligible to receive a share of the savings they generate below a specific expenditure benchmark set by CMS for each ACO. But ACOs could also be required to repay Medicare for a portion of their expenditures that exceed the benchmark.