Final ACO rule relaxes requirements for doctors, hospitals

The Obama administration today released much-awaited final rules on Medicare accountable care organizations that make it easier for doctors and hospitals to participate.

Kaiser Health News: The rule cuts "in half the number of performance measurements, removing the electronic health records requirement and eliminating financial risks for some groups. The Centers for Medicare and Medicaid Services also relaxed the timetable for the launch of the ACOs with groups allowed to apply throughout 2012. To entice providers, CMS said it will make $170 million available starting next year to physician-owned and rural providers to start ACOs" (Gold and Galewitz, 10/20).

Los Angeles Times: "Working to salvage a much-touted initiative in the new healthcare law aimed at controlling costs, the Obama administration issued revised regulations Thursday to encourage doctors, clinics and hospitals to take greater responsibility for improving patients' care. The rules will reward healthcare providers who form partnerships to reduce the cost of caring for Americans on Medicare while also boosting quality, two goals of the sweeping overhaul the president signed last year" (Levey, 10/20).

National Journal: "The Health and Human Services Department has made significant concessions on its controversial rules governing accountable care organizations – the new hospital structures meant to help improve the U.S. health care system" (McCarthy, 10/20).

The Hill: "The Obama administration estimates that Accountable Care Organizations could save the government up to $940 million from 2012 through 2015 ($470 million is more likely). ... Preliminary ACO regulations issued in April received a torrent of criticism from health systems who said the rules were too burdensome and contained too few incentives. The final rule released Thursday claims to 'have made significant modifications to reduce burden and cost for participating ACOs'" (Pecquet, 10/20).

Bloomberg: "The delayed rule marks a victory for hospitals, clinics and large doctors' practices that have lobbied to alter draft regulations they viewed as too burdensome and financially risky" (Eisenberg and Wayne, 10/20).

Politico Pro: "The final rule, CMS Administrator Don Berwick said, 'not only continues to protect beneficiaries and help the trust fund, I think it will also make the program more attractive to more [provider] participants'" (Feder, 10/20). 

Modern Healthcare: "The Patient Protection and Affordable Care Act calls for Medicare to offer accountable-care agreements starting in 2012. The agency released draft rules in March for three-year agreements that providers sharply criticized as too risky and burdensome. More than 1,200 comments were submitted, according to CMS" (Evans, 10/20).

Read HHS information about the final rule here. Also, the New England Journal of Medicine released a commentary by Centers for Medicare and Medicaid Services Chief Donald Berwick on the ACO rule.

From the KHN library...  

KHN's earlier coverage of the proposed rule: New ACO Rules Outline Gains And Risks For Doctors, Hospitals (Rau, Galewitz and Vaida, 3/31).

Other KHN coverage: FAQ On ACOs: Accountable Care Organizations, Explained (Gold, updated 3/31).