Providers are debating the pros and cons before signing up for the federal program, the Medicare Shared Savings Program, now that the final version of the accountable care organization (ACO) rule is out.

Although physician groups generally hailed the Centers for Medicare & Medicaid Services (CMS)' ACO final rule, published last month, as a more relaxed version of the initial proposal in the spring, some providers still are hesitant to apply, given the associated financial risk with Shared Savings. Some hospitals and other providers argue that they could lose out in either the one-sided or two-sided models.

CMS estimates 50 to 270 ACOs will sign up to participate, generating a net savings of $940 million during the first four years through Shared Savings.

Naysayers, however, say that CMS may have overestimated the interest in ACOs. Nearly half (49 percent) of physician specialists and primary care physicians said they feel "not at all prepared" to accept greater financial risk for managing patient care, according to report by health technology company Optum Institute for Sustainable Health this month.

Out of the nearly 700 pages of the final rule, there are some strict rules that may preclude interested parties from becoming an ACO.

"CMS will not automatically accept an applicant to become an ACO in the [Shared Savings Program]," health law firm Hooper, Lundy & Bookman, PC, noted in a white paper this week.

The ACO must be composed of eligible group participants that CMS defines as professionals in group practice, networks of individual practices of professionals, partnership or joint venture arrangements between hospitals and professionals, hospitals employing professionals, critical access hospitals that engage in global billing, rural health clinics, and federally qualified health centers. ACOs also must have enough "ACO professionals"--physicians or practitioners--to serve at least 5,000 Medicare fee-for-service beneficiaries.

The application process doesn't guarantee savings or even entry into the program, for that matter, the white paper notes. Organizations that invest in becoming an ACO might come to naught if CMS refuses to admit the ACO into the Shared Savings Program. CMS will have (and presumably will exercise) discretion over which ACOs it permits to participate, the white paper states.

"The final regulations make substantial changes to the proposed ACO regulations, which were widely viewed as having set the bar too high for providers hoping to form or join in the formation of an ACO," Charles Oppenheim, head of the Hooper, Lundy & Bookman ACO Task Force, said in a press release.

For more information:
- read the press release
- check out the white paper (.pdf)

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