The Centers for Medicare and Medicaid Services (CMS) has released its long-anticipated proposed rule for “Medicare Shared Savings Program” or accountable care organizations. Three-year demonstrations of these accountable care organizations, focused on at least 5,000 Medicare beneficiaries in a local service area, were authorized by the Patient Protection and Affordable Care Act and are scheduled to begin as early as January 2012.  [Updated: below is the 126-page version of the proposed rule published in the Federal Register on April 7, 2011.]

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While not changing underlying Medicare fee-for-service or managed care payments, these demonstrations would allow hospitals, physicians, Federally Qualified Health Centers, and other Medicare providers to set benchmarks for quality improvement for their defined cohort of 5,000 beneficiaries.  If those quality improvement goals are achieved, with savings (primarily from reduced emergency room visits, unplanned hospitalizations and hospital readmissions), then all the participating providers will “share” in the savings achieved.

Quality improvements will be focused on:

  • Patient/caregiver experience of care
  • Care coordination
  • Patient safety
  • Preventive health
  • At-risk populations/frail elderly health

The proposed rule answers many of the key questions about how these accountable care organizations are to organized but leaves other critical questions unanswered.  In addition, since the rule from CMS is only a proposed rule, stakeholders seeking to create or become accountable care organizations still do not have final or definitive guidance that they can rely upon.   Public comments on the proposed rule are due on June 6, 2011.

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