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Medicare launches accountable care program

January 12, 2012

The U.S. Department of Health & Human Services (HHS) is launching a national initiative to encourage an emerging health care delivery and payment model – known as the accountable care organization (ACO) – that rewards health care practitioners and institutions for lower costs while meeting quality benchmarks.

The department officially issued new regulations Nov. 5 for the Medicare Shared Savings Program under which doctors, hospitals, and other health care providers can establish ACOs to provide highly coordinated care for Medicare patients and share in any savings the government health plan realizes.

The ACO concept is centered on making health care practitioners and providers “accountable” for the cost and quality of patient care.  Unlike managed care, where savings accrue to the payer and not the provider, the Shared Savings Program offers financial incentives directly to providers. 

ACOs that form to meet the Medicare objectives might extend their efficiencies to care covered by other payers.

The HHS hopes health care practitioners and institutions will begin organizing ACOs for Medicare patients under the initiative beginning in 2012. 

Information on the potential benefits of ACO care was included in the most recent edition of the HHS’s Medicare and You booklet, which Medicare beneficiaries received this past fall.

The AOA has long advocated for optometrists to be part of ACOs. Congress agreed and made ACOs accountable for all care covered for patients under Medicare Part A and B, including eye care. 

In the regulatory process, the CMS confirmed that any individual or entity, including optometrists, opticians, ophthalmologists, and surgery centers, may join ACOs. 

While optometrists will not be required on ACO provider panels under the regulations, the strong emphasis placed on providing a range of well-coordinated, accessible health care services could effectively encourage utilization of optometrists, the AOA Advocacy Group notes. 

ACOs that wish to deliver high-quality and efficient eye care will be best served in the long run by having optometrists provide primary eye care.

The ACO model builds on pilot projects conducted under the Medicare Physician Group Practice Demonstration and the Medicare Health Care Quality Demonstration projects, both established by the 2003 federal Medicare Prescription Drug, Improvement, and Modernization Act. 

“A National Strategy To Put Accountable Care Into Practice” was proposed last year in the journal Health Affairs, by former U.S. Center for Medicare & Medicaid Services (CMS) Administrator Mark McClellan, M.D.

In the article, Dr. McClellan notes that ACOs are based on three central concepts:

  • Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total, per-capita costs across the full continuum of care for a population of patients;
  • Payments linked to quality improvements that also reduce overall costs; and
  • Reliable and progressively more sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through improvements in care.

The HHS proposed preliminary rules for ACOs earlier this year (see the May edition of AOA News).

The finalized ACO rules, announced last month, include specifics of a new Medicare Shared Saving Program under which the CMS predicts ACO practitioners and payers could share up to $940 million in  the first year of the program.

The final rule streamlined the incentive program and increased the potential bonuses.

The final rule also eliminated a plan to impose penalties on practitioners and institutions that fail to generate savings through an ACO.

An ACO advance payment model, also formally announced last month, will provide physician-owned health care practices and rural providers, who participate in the shared savings program, with additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems, according to the HHS. 

The advanced payments would be recovered from any future shared savings achieved by the accountable care organization.

Health care practitioners who join accountable care organizations will be required to notify their Medicare patients and provide them with information about the ACO. 

However, patients keep their right to choose their doctor and may not be limited to care by ACO participants – another important protection supported by the AOA.

To aid organizations interested in becoming ACOs, the CMS is offering free Accelerated Development Learning Sessions. For more information, visit https://acoregister.rti.org.

The Shared Savings Program final rule can be found at www.HealthCare.gov/law/resources/regulations/index.html. (See “Final Rule on Shared Savings Program: Accountable Care Organizations.”) 

Information on the Advanced Payment Program is posted at http://innovations.cms.gov/areas-of-focus/seamless-and-coordinated-care-models/advance-payment/. Fact sheets on the ACO program are posted at www.HealthCare.gov/news/factsheets/2011/10/accountable-care10202011a.html.

Additional information can be found on the CMS Web site ACO page (www.cms.gov/ACO).

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