Providers cheer ACO final rule: Reactions to the revised cut

After delivering severe criticisms when the Centers for Medicare & Medicaid Services (CMS) issued its proposed rules in the spring, professional medical groups--for the most part--now are applauding the final rule, an easier-to-swallow version of the accountable care organization (ACO) program.

After reviewing more than 1,300 comments, CMS made the following revisions, according to documents:


Proposed rule

Final rule

Transition to risk in Track 1

ACOs offer two tracks. Track 1 would entail two years of one-sided shared savings; then participants would have to transition in third year to a performance-based risk, two-sided model of savings and losses.

ACOs still offer two tracks. Track 1 now removes two-sided risk.

Prospective vs. retrospective

Retrospective assignment based on primary care service use, with prospective identification of benchmark population

Preliminary prospective-assignment with beneficiaries identified quarterly, with final reconciliation after each performance year

Quality measures

65 measures in 5 domains

33 measures in 4 domains

Shared savings

One-sided risk model: Sharing begins at savings of 2 percent
Two-sided risk model: Sharing on first dollar

Share on first dollar for all ACOs in both models once min. savings rate is achieved

Beneficiary claims data

Claims data shared only for patients seen by ACO PCP during performance year; beneficiaries can decline at point of care

ACO can now contact beneficiaries from quarterly lists to notify them of data sharing; beneficiaries can decline

Eligible entities

Federally qualified health centers and rural health clinics not specifically included  

Federally qualified health centers and rural health clinics included

Start date

Performance years based on calendar years

Performance "years" spaced out


Reports provided at beginning of each performance year

Additional reports provided quarterly

Electronic health records (EHR)

50 percent of PCPs must be Meaningful Users

EHR no longer a condition for participation; EHR still quality measure

Assignment process

One-step assignment process

Two-step assignment process with modified basis of plurality of allowed charges

Marketing guidelines

All marketing materials must be approved by CMS

CMS to provide approved language

With the notably relaxed changes, the final rule is being hailed by some healthcare organizations.

American Hospital Association:
"Today's rules represent the direction in which the hospital field is moving--toward better coordinated patient care across care settings," AHA President and CEO Rich Umbdenstock said in a statement yesterday. "We commend CMS for listening to the concerns of America's hospitals. The hospital field is actively working on ways to improve care delivery and the final accountable care organization rule provides hospitals a better path to do so."

American Medical Association:
"We are pleased that the final rule ... includes many of the important changes recommended by the AMA to allow all interested physicians to lead and participate in these new models of care," said Dr. Peter W. Carmel, the Association's president, in an American Medical News article. "The AMA has stressed throughout this rule-making process that, if well-implemented, the ACO model offers promise to improve care coordination and quality while reducing costs. This final rule requires a full, in-depth review to ensure it maximizes those potential benefits for Medicare patients and physicians."

Association of American Medical Colleges:
"The AAMC is pleased that the ACO final rule excludes indirect medical education payments from the methodology used to assess shared savings under the program. By not including these policy payments in the historical cost analysis, medical schools and teaching hospitals--institutions that often treat the sickest and most vulnerable patients--have a better opportunity to participate in the ACO initiative," President and CEO Dr. Darrell G. Kirch said in a statement yesterday.

"The programs announced today can benefit people in Medicare by encouraging providers to work together to better coordinate patient care, which can lead to fewer hospital readmissions and lower Medicare costs. AARP believes today's announcement is a good first step and we welcome the chance to further review these programs," AARP Legislative Policy Director David Certner said in a statement yesterday.

Campaign for Better Care:
"We are very pleased that this final rule will require ACOs to adhere to strong patient-centered criteria, use beneficiary experience of care measures to evaluate performance, and ensure full transparency, notification and choice for beneficiaries," Campaign for Better Care Leader Debra L. Ness said in a statement yesterday. "This new rule is not perfect, but it provides a path away from the broken, dysfunctional health care system we have today toward a system that offers higher quality, better coordinated and more patient-centered care." She added, "In the end, we see this rule as a reasonable compromise. The Department was enormously responsive to the comments that were filed and in particular, to concerns raised by providers."

For more information:
- see a chart (.pdf) of the proposed and final rule
- read the AHA statement (.pdf)
- here's the amednews article
- here's the AARP statement
- read the AAMC press release
- here's the Campaign for Better Care statement

Related Articles:
HHS releases final ACO rule with 'significant changes'
CMS finally issues ACO final rule: Any takers?