Accountable care organizations (ACOs), a centerpiece of health reform legislation, are intended to deliver high-quality, cost-efficient health services by integrating treatment among providers. On October 20, 2011, the The Department of Health and Human Services published the final ACO rules that reduce by half the quality performance standards proposed in preliminary rules, eliminate penalties for providers that fail to achieve quality and cost targets, enhance bonuses for providers that do achieve them, and relax some electronic health record standards. The first Medicare ACOs agreements will begin April 1, 2012.
Navigant professionals have assessed the final ACO rules and identify these positives:
- It’s difficult to manage health of people you don’t know. The new rules provide that Centers for Medicare and Medicaid Services (CMS) will give ACOs a list of “probable beneficiaries” eligible for care, with quarterly list updates. Beneficiaries cannot “sign up” voluntarily but will be assigned according to whether ACO members are their primary care physician or have provided other professional care.
- Setting up ACOs will be expensive but the rules offer a new “Advance Payments” option to ACOs lacking capital reserves or needing to cover short term losses. Significantly, ACOs will be allowed to share in every dollar of savings once minimum savings are achieved, and there will no longer be requirements to withhold shared savings payments to cover potential future cost increases.
- The reduced quality metrics (from 65 to 33) will have a longer phase-in, with pay for reporting in year one and pay for reporting and performance in years two to three.
Organizations creating ACOs must commit to handling the costs. It is critical to engage ACO physicians in actively managing patient outcomes, in order for healthcare organizations to design, develop and implement solutions that create high-performing healthcare organizations. Now the rules of engagement are set.