The Centers for Medicare & Medicaid Services (CMS) has issued its long-anticipated final rule for the Medicare Shared Savings Accountable Care Organization (ACO) Program, as well as its guidelines for applications for an Advance Payment Model under that program.  These will be officially published in the Federal Register on November 2, 2011.

The final rule makes significant modifications to the proposed rule, including: (1) greater flexibility in eligibility to participate in the Shared Savings Program; (2) multiple start dates in 2012; (3) establishment of a longer agreement period for those starting in 2012; (4) greater flexibility in the governance and legal structure of an ACO; (5) simpler and more streamlined quality performance standards; (6) adjustments to the financial model to increase financial incentives to participate;(7) increased sharing caps; (8) no down-side risk and first-dollar sharing in Track 1; (9) removal of the 25 percent withhold of shared savings; (10) greater flexibility in timing for the evaluation of sharing savings (claims run-out reduced to 3 months); (11) greater flexibility in antitrust review; and (12) greater flexibility in timing for repayment of losses; and (13) additional options for participation of FQHCs and RHCs.

The notice of the Advance Payment Model responds to concerns of many stakeholders about the capitalization needed to begin accountable care organizations, without any assurance of shared savings.  Applicants for the Medicare Shared Savings ACO Program may also apply for the advanced payments, which may include three types of payments:  (1) an upfront, fixed payment; (2) an upfront, variable payment; and (3) a monthly payment of varying amount depending on of the number of Medicare beneficiaries historically attributed to the ACO.

More information about the Advance Payment Model is available from the CMS Center for Medicare & Medicaid Innovation website.

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