The CMS final rule for ACOs reduces the number of required measures by half, making the program more appealing to providers.

Ed Gaines, JD, CCP

CMS released the final rule for accountable care organizations (ACOs) in October 2011, and early indications suggest CMS has listened to the industry and incorporated significant changes to make the program more appealing. The final rule included more generous shared savings incentives, omitted 32 of the 65 original quality measures, and gave ACO candidates more time to get started. The rule no longer required that 50% of participating physicians be approved under meaningful use requirements for electronic health record use and new ACOs can participate without absorbing risk in the earlier years. Beneficiary assignment can now be done prospectively, instead of retrospectively, and ACOs will be able to contact them, which they could not do before. However, beneficiaries will be able to opt out of the program as well as seek care outside of the ACO.

The final rule does not represent a “slam dunk” by any means, but it appears to have the industry’s attention. Industry responses to the final rule have suggested that it has advanced the goals toward reengineered health care models by reducing the number of required measures by half, and many organizations believe the ACO concept is permanent, whether there is involvement with Medicare or not.

Table 1 shows an illustration of the differences in the original proposed rule versus the final rule for organizations seeking participation in 2012.

Pioneers as Engineers

As follow-up to the final rule, the Pioneer ACO Model was designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements.

The payment models being tested in the first 2 years of the Pioneer ACO Model are a shared savings payment policy with generally higher levels of shared savings and risk for Pioneer ACOs than levels currently proposed in the Medicare Shared Savings Program. In year three of the program, participating ACOs that have shown a specified level of savings over the first 2 years will be eligible to move a substantial portion of their payments to a population-based model. These models of payments also will be flexible to accommodate the specific organizational and market conditions in which Pioneer ACOs work.

The Pioneer ACO Model also includes strong patient protections to ensure that patients have access to and receive high quality care. To accomplish this goal, Pioneer ACOs will be expected to improve the health and experience of care for individuals, improve the health of populations, and reduce the rate of growth in health care spending. Participating ACOs will be held financially accountable for the care provided to their aligned beneficiaries. In addition, CMS will publicly report the performance of Pioneer ACOs on quality metrics, including patient experience ratings, on its Web site.

Selected organizations (32 total) were chosen for their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA) document available at These organizations, also listed on the CMS innovations Web site, were selected through an open and competitive process from a large applicant pool that included many qualified organizations. It would be wise for physician groups to check the following list of participating ACO entities to see if any are in their respective areas.

In conclusion, physician groups should keep ACOs on their watch list, being mindful that the CMS ACO is probably not the only collaborative care activity in their surrounding marketplace. Commercial carriers are already proceeding down this path regardless of CMS’s ACO program success or failure. Either way, groups must make sure they are at the table for any ACO discussions in their area.

Ed Gaines, JD, CCP, is chief compliance officer with Medical Management Professionals Inc (MMP) in its Greensboro, NC, office.