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Organization Regulations Final Accountable Care MET WITH FAVOR By Ronald F. Pavlovich, CPA, CAPPM Medicaid Services (CMS) in March of 2011 were met with waves of opposition. CMS responded on October 20, 2011 with final regulations that make the formation of an ACO less complex and participation for physicians less risky than projected under the initial rules. An ACO is a group of physicians, T hospitals and other providers integrated in various legal forms to provide evidence-based medicine, patient engagement, report on quality and cost measures, and coordinate care. The ACO must include primary care physicians with at least 5000 Medicare enrolled patients and maintain a governing body with responsibility for oversight and strategic direction. The ACO would enter into a voluntary three year Shared Savings Program with CMS based on the quality of care and cost savings measurements achieved on an assigned panel of Medicare beneficiaries drawn from the ACO's patient population. In addition to traditional fee for service reimbursement, ACOs would be el igible to receive addit ional Medic a re pa yment s HE INITIAL ACCOUNTABLE Care Organizat ion (ACO) regulat ions issued by the Center for Medicare and based a percentage of measured cost savings. The initial cost benchmark for the ACO is based on a weighted average three year look back period of Medicare spending on the assigned beneficiary panel. In order to share in the savings, the ACO would need to exceed a minimum savings rate (MSR) as compared to the benchmark. The ACO must elect to receive their shared savings under one of two tracks. Track 1 is the purest form of shared savings in that participants only share in savings if the ACO meets their MSR. Previously in track 1, participants were also at risk of repayment for shared losses in year three of the contract. The final rules eliminated the year three shared loss risk for track 1. Track 2 has a greater shared savings upside than track 1, but retains the shared loss risk in all three years of the contract. Under the new regulations, both tracks allow for cost sharing on the first dollar of savings over their MSR that were previously only available in track 2. The final regulations also provide for interim payments during the contract period offering some relief for the costs incurred by ACOs to form and integrate clinically. The number of quality measures in the final regulations was reduced from 65 to 33. Electronic health record (EHR) measures requiring 50% of ACO primary care physicians to be meaningful users was eliminated, but EHR use by the ACO was retained as a quality measure. Lastly, the final regulations provide for several Stark Law waivers that open the door for many providers to join an ACO that would have previously been restricted from participating by Stark anti-kickback and gain sharing statutes. Nevertheless, there are still some risks in starting or joining an ACO even with the friendlier regulations. Projected start-up costs of an ACO are still estimated to be upwards of $1 million. Medicare beneficiaries may opt out of data sharing with their assigned ACO and are not restricted from receiving care outside of their assigned ACO. Cost benchmarks are adjusted during the contract term ultimately making the cost savings a moving target. For more information on the final ACO regulations, visit the CMS website. Ron Pavlovich i s a CPA and a Certif ied Administrator of Physician Practice Management (CAPPM) from the Amer ican Academy of Medical Management. He is a Senior Manager in the Medical Practice Management Group of CBIZ MHM LLC. ■ JANUARY-FEBRUARY 2012 MDNEWS.COM MD NEWS Cleveland-Akron-Canton | 49