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March 31, 2011

Accountable care organization proposed regulations released for public comment

The long-awaited ACO regulations were released by CMS in draft form today, accompanied by a series of conference calls for different constituencies.  Here is a mirrored copy: Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations - Proposed rule.

CMS Administrator Don Berwick introduced the regulations as implementing a vision of spreading the benefits of integrated health care systems through coordinated care, common medical records, patient education and investments in prevention -- in patient-centered organizations where there is shared decisionmaking among patients and providers.  Medicare fee-for-service beneficiaries will continue to be able to see providers of their choosing, and the overall goal is to provide better care, seamless care, coordinated care.  We can catch a glimpse of detail in a commentary piece by Berwick published today in the New England Journal of Medicine:

The financial opportunity for an ACO to achieve shared savings will vary according to its initial tolerance for risk. Two different models are proposed. In the first model, ACOs earlier in their evolution can elect to assume a smaller share of upside gains but no risk of loss for 2 years and then transition in year 3 to accepting risk. In the second model, organizations that are willing to take on both upside gains and downside risk can qualify for a higher proportion of shared savings from the start. The newly chartered Center for Medicare and Medicaid Innovation will concurrently launch aggressive testing of innovative models for a nationwide technical support platform for ACOs, to complement the numerous ongoing efforts in which the private sector is already engaged. The Center for Medicare and Medicaid Innovation is also now exploring ways to test alternative models of ACOs that differ from the models specified in the proposed rule.

For more on today's release, see the Kaiser Health News pieces here and here.

In addition, the Office of Inspector General issued an ACO announcement, highlighting the coordination across multiple agencies related to ACOs:

CMS and HHS Office of Inspector General (OIG) jointly issued a notice with comment period outlining proposals for waivers of certain Federal laws-the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law-in connection with the Shared Savings Program. CMS and OIG are also asking for comments on further waiver design considerations for the Shared Savings Program and for the separate waiver authority for the Center for Medicare and Medicaid Innovation under section 1115A of the Social Security Act.

The Federal Trade Commission and the Department of Justice jointly issued a "Proposed Statement of Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program."

And the Internal Revenue Service (IRS) issued a notice requesting comments regarding the need for guidance on participation by tax-exempt organizations in the Shared Savings Program through ACOs.

We all have a little light reading to do.  I look forward to your comments and questions on these significant proposed regulations.  The CMS and OIG regulations are scheduled to be published in the Federal Register next week, and the comment period will extend through June 6, 2011.  The FTC and the IRS are accepting comments through May 31.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

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