WASHINGTON – The Department of Health and Human Services (HHS) has issued its final rules on Medicare Accountable Care Organizations, which bolster the menu of options for providers looking to better coordinate care for patients and aim at making it easier for providers to deliver high quality care and use healthcare dollars more wisely.

The new rules establish a new voluntary Medicare Shared Savings Program and a complementary program to help test the Advance Payment model. The Advance Payment model will provide additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who also would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.  The advanced payments would be recovered from any future shared savings achieved by the Accountable Care Organization.

The Medicare Shared Savings Program will provide incentives for participating health care providers who agree to work together and become accountable for coordinating care for patients.  Providers who band together through this model and who meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program.  The higher the quality of care providers deliver, the more shared savings the providers may keep. Federal savings from this initiative could be up to $940 million over four years, said officials.

Key modifications to the rule include:

• In the proposed rule ACO requirements were to be aligned with EHR requirements, by stipulating that “50 percent of primary care physicians must be defined as meaningful users by start of second performance year.” The final rule has eased this burden by making it “no longer a condition of participation,” and instead has “retained EHR as a quality measure but weighted higher than any other measure for quality-scoring purposes.”
• The final rule requires 33 measures in four domains, instead of 65 measures in five domains required by the proposed rule.
• The final rule makes the one-sided model truly one-sided. It still offers two tracks for “ACOS at different levels of readiness, with one providing higher sharing rates for ACOS willing to also share in losses.”
• The final rule expands participation to Rural Health Clinics and Federally Qualified Health Centers and organizations where specialists provide primary care.
• The final rule provides a more a flexible starting date in 2012.

Officials said that both the Medicare Shared Savings Program and Advance Payment model create incentives for healthcare providers to work together to treat an individual patient across care settings – including doctors’ offices, hospitals, and long-term care facilities.

 “Today we have taken another step to improve healthcare for people with Medicare,” said HHS Secretary Kathleen Sebelius.  “We are excited to give doctors, hospitals and other providers the flexibility and support they need to work together and focus on making sure patients get the care they need.”

 “This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other healthcare providers to work together in new ways,” Sebelius added.

“As a physician I understand the complexities of caring for a patient who may have multiple providers,” said Donald M. Berwick, MD, administrator of the Centers for Medicare & Medicaid Services.  “This opportunity to coordinate care among providers could greatly improve the quality of care Medicare beneficiaries receive.”

 “We listened very carefully to the more than 1,300 comments we received on the proposed rule released this spring, and this final rule includes a number of improvements suggested by those comments that will strengthen the program,” Berwick said.  “For example, the final rule will increase the incentives and streamline the Shared Savings Program, extending the benefits of the new program to a broader range of beneficiaries.”

The Shared Savings Program final rule is posted here.

 The Advanced Payment solicitation is posted here.