Agencies Issue Final Rules on ACOs

October 20, 2011

Centers for Medicare and Medicaid Services (CMS) released a final rule on implementation of the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs). Related agencies also released separate notices regarding similar legal issues affecting ACOs:

  1. CMS and the Office of the Inspector General (OIG) issued an interim final rule addressing waivers for application of Stark, Federal Anti-Kickback, and gainsharing and civil monetary penalty laws for certain arrangements by ACOs.
  1. Federal Trade Commission (FTC) and Department of Justice (DOJ) issued an updated policy statement that discusses how antitrust laws will be applied and enforced for ACOs.
  1. The IRS issued a fact sheet tax exempt status for ACOs.

The CMS final rule includes a number of key differences from the proposed rule that appear to be addressing some of the chief complaints with CMS’s approach to the MSSP:

  1. No requirement to assume risk for shared losses. CMS eliminated “two-sided” risk from Track 1.
  2. No retrospective assignment of beneficiaries. CMS adopted a “preliminary prospective-assignment” method that identifies beneficiaries assigned to an ACO quarterly, with an annual reconciliation based on patients actually served by the ACO.
  3. Assignment to specialists. CMS allows beneficiaries to be assigned to a specialist when the beneficiary has not received any primary care services from a primary care physician. The beneficiary is assigned to the ACO professional having the plurality of allowed charges for primary care services.
  4. Significant reduction in the number of quality measures. CMS adopted 33 measures in four domains, down from 65 measures in five domains in the proposed rule.
  5. First dollar savings for all. CMS eliminated the minimum savings rate so Track 1 and Track 2 ACOs will be able to share in all savings up to the maximum savings rate.
  6. No EHR meaningful use requirement. CMS will no longer require as a condition of participation that 50% of primary care physicians be meaningful users of an electronic health record (EHR). Meaningful use is, however, incorporated into the MSSP as a quality measure.
  7. FQHC and RHCs eligible to participate in ACOs. CMS expanded the list of eligible entities to include federally qualified health centers (FQHCs) and rural health clinics (RHCs). FQHCs and RHCs can either form their own ACO or become a participant in other ACOs.

In subsequent articles over the coming weeks, we will provide more in-depth discussion of the CMS final rule and other agency guidance on the MSSP.

For additional background on legal issues affecting ACOs, please see our prior articles.

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