Friday, October 28, 2011

CMS Releases Final ACO Regulations-Providers are Happier

For the full rule, click on the following link below. The link is also provided at the end of the article:

Responding to complaints from organized medicine, the Centers for Medicare and Medicaid Services (CMS) published a final version of its regulations for accountable care organizations (ACOs), a cornerstone of healthcare reform, that lowers the bar for physicians to participate in them. Medical societies had called the first draft of regulations, released in March, too complex and financially risky for physicians.

ACOs consist of physicians, hospitals, and other providers in various combinations that attempt to coordinate the care of Medicare patients with the goal of improving its quality while reducing costs. Successful ACOs would share in any savings they produce for Medicare on top of their usual fee-for-service reimbursements.

However, medical societies ranging from the American Medical Association (AMA) to the American Academy of Family Physicians wondered whether any ACO will see those shared savings based on the draft regulations. Under the preliminary plan, ACOs would have had to meet 65 different quality measures, which organized medicine considered too many. They also said it was too much of a stretch that at least 50% of ACO primary care physicians must eventually qualify as meaningful users of electronic health record (EHR) systems. The final ACO regulations released today lowered the number of quality measures to 33 and eliminated the original EHR meaningful use requirement, but retained EHR use as a quality measure.

The changes came as a result of a strong and voluminous outpouring of more than 1,300 comments on the draft regulations that result in significant changes, notably:

-Providers will not be required to share downside risk in order to participate in an ACO and will be able to earn revenue sharing based on ACO savings earlier as opposed to Medicare retaining all the initial savings.

-Quality measures that ACOs will have to meet to qualify for performance bonuses have been reduced to 33 from 65.

-Community health centers and rural health clinics, which were not allowed to form ACOs in the draft proposal, will be allowed to lead ACOs.

-The ACOs will also be told up-front which Medicare beneficiaries are likely to be part of their system as opposed to not knowing which patients were in the ACO until the contract ended.

-The final rule provides a more a flexible starting date in 2012.

The role of community health and rural health centers is important because the new rule addresses another concern, which was that smaller medical practices would lack the capital necessary to invest in technology and other infrastructure needed to create and participate in an ACO. To combat this, CMS announced an Advance Payment Model whereby physician-led practices and rural hospitals participating in the Shared Savings Model could receive upfront payments for ACO participation. This money could then be used for building up the personnel or IT infrastructure needed to effectively participate in an ACO. The upfront payments would be paid back via future incentive earnings. The advance payments are only available to ACOs that do not include inpatient facilities with less than $50 million in revenue, or ACOs 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.

“Today we have taken another step to improve healthcare for people with Medicare,” said HHS Secretary Kathleen Sebelius. “We are excited to give doctors, hospitals and other providers the flexibility and support they need to work together and focus on making sure patients get the care they need. This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other healthcare providers to work together in new ways.”

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald M. Berwick, MD, administrator of the Centers for Medicare & Medicaid Services. “This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive. We listened very carefully to the more than 1,300 comments we received on the proposed rule released this spring, and this final rule includes a number of improvements suggested by those comments that will strengthen the program,” Berwick said. “For example, the final rule will increase the incentives and streamline the Shared Savings Program, extending the benefits of the new program to a broader range of beneficiaries.”

The final ACO regulations did not placate organized medicine entirely. Medical societies said that for the sake of attracting more participants, a typical ACO's cut of Medicare savings should be bigger than what the draft regulations stipulated — 50% under track 1, and 60% under the higher-risk track 2. However, CMS would not budge from those percentages. Nor would it reduce the minimum saving rates established for track-1 and track-2 ACOs. Although they lost on these and other issues, several medical societies today gave a thumb's up response, by and large, to the framework now in place for ACOs.

"We are pleased that the final rule on Medicare ACOs includes many of the important changes recommended by the AMA," said AMA President Peter Carmel, MD, in a press release. “The AMA recommended that the risk and payment structure for potential ACOs should encourage participation by physicians in all practice sizes, and we are very pleased that this rule allows ACOs to share in every dollar of cost savings and includes an option that limits financial risk, which is important for many physician practices.” While the final rule reduced the number of quality measure by about half, Carmel added that “the AMA would have preferred even greater flexibility on which measures practices are required to report.”

Jack Lewin, MD, the chief executive officer of the American College of Cardiology, also praised CMS for listening to the input of organized medicine. "While we do not know for certain how many organizations will form as ACOs in the coming years," Dr. Lewin stated in a press release, "we remain encouraged since these changes make it more feasible for physicians and hospitals to consider participating."

While provider organizations generally hailed the announcement, America’s Health Insurance Plans took a more cautious approach, namely to the removal of the mandatory review of new ACOs for anti-trust violations by the Department of Justice and the Federal Trade Commission.

“Doing away with the mandatory review process raises concerns that provider market power may not be scrutinized sufficiently, potentially increasing healthcare costs for consumers and employers,” said Karen Ignagni, AHIP president and CEO in a prepared statement. “We urge the DOJ and the FTC to take steps to ensure the ACO process is transparent and there is vigorous oversight and enforcement of antitrust laws to protect consumers and employers from higher prices and cost-shifting that could result from increased provider consolidation.”

For the full rule, click on the following link below:

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC