Clearly the more recent dominant story in healthcare is the publication, on March 31, 2010, by the Centers for Medicare and Medicaid Services (“CMS”) of the Proposed Accountable Care Regulations (the “Proposed ACO Regs”). The release is voluminous and extremely detailed. Below is a skeletal outline of the basic provisions of the Proposed ACO Regs:
1. The Proposed ACO Regulations describe the expected mechanics of a Shared Savings Plan (“SSP”) with respect to Medicare beneficiaries, to be implemented through ACOs.
2. To participate in the SSP, an ACO must be approved by, and execute a contract with, CMS. The application will be extremely detailed, with many exhibits and charts to be submitted. Not all applicants will be accepted.
3. The SSP begins January 1, 2012. Contracts with CMS will be for a minimum of three years. Applicants may only begin participating on January 1 of a year.
4. Physician groups and hospitals are eligible to participate, but primary care physicians (PCPs) must be part of any ACO.
5. An ACO must serve at least 5,000 Medicare beneficiaries; all such beneficiaries run through the ACO’s PCPs.
6. The SSP reflects a triple aim of CMS, to be achieved through the ACOs: (1) Better care for individuals; (2) Better health for populations; and (3) Lower growth for expenditures.
7. ACO providers will bill normally, and receive standard fee for service to patients.
8. The ability for the ACO to receive a bonus depends upon there being a net Medicare cost savings, and the ACO achieving success in satisfying a large number of quality metrics (currently 65).
9. The ACO can adopt either a “one-sided” or “two-sided” risk model, as it elects and CMS approves. If one-sided the ACO has no risk of loss until year three of its CMS contract; if two-sided the ACO is subject to the risk of loss all three years.
10. ACOs that accept risk immediately have an opportunity to collect a larger bonus than one that does not.
11. ACOs must have written documents that describe, to the satisfaction of CMS, how they will divide bonus payments among its stakeholders or, where appropriate, pay for losses.
12. There are new anti-trust guidelines imposed on ACOs. Those who have a market share of less than 30% fall within a safety zone. Those whose market share is above 50% must obtain FTC approval before contracting with CMS. Those whose market share is between 30% and 50% are subject to a modified review.
