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 CMS Unveils Final ACO Rule, Makes Changes To Entice More Interest

The Centers for Medicare & Medicaid Services (CMS) on Thursday released its final rule establishing the Accountable Care Organization (ACO) program, declaring the finished product stronger than a draft version from March that attracted scorn from stakeholders put off by its costs and administrative rules.

“The final rule strikes a better balance,” said Jonathan Blum, CMS deputy director and director of the Center for Medicare, referring to modifications made to ease bottom-line concerns of stakeholders with new financial incentives while at the same time maintaining quality improvement models.

The major changes from the draft include CMS reducing by half the number of quality measures from 65 to 33; the elimination of the electronic health records requirement; and the introduction of a payment model that allows ACOs to share on the first dollar once a minimum savings rate has been established.

The Medicare Shared Savings Program (MSSP), or ACO program, is expected to save $940 million over three years. CMS estimates 50 to 270 organizations will take part in the first reporting period of the program.

CMS also changed the way it would assign Medicare beneficiaries to ACOs, offering a preliminary prospective assignment method where beneficiaries would be identified on a quarterly basis. The draft rule proposed retrospective assignment of beneficiaries based on utilization of primary care services, with prospective identification of a benchmark population.

Eligibility provisions were also altered from the draft. The final rule allows federally qualified health centers and rural health clinics to both form and participate in an ACO. CMS also said it listened to the concerns of rural providers and physician-owned entities by extending additional financial support or “advance payments” to help these organizations receive upfront funding that would be recouped as these ACOs implement savings.

"Today we have taken another step to improve health care for people with Medicare," said Health and Human Services 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 health care providers to work together in new ways.” 

Long term care providers were examining the final rule and welcomed the initiative.
"The American Health Care Association [AHCA] supports initiatives that create incentives for quality care and help contain health care costs. We certainly want to ensure skilled nursing and post-acute facilities are part of the cost-saving model," said Gov. Mark Parkinson, president and chief exective officer of AHCA.
"We'll be examining the details of the final ACO rule in the coming days and weeks to ensure our sector can play an important role moving forward."

CMS said MSSP 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.

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

To aid organizations interested in becoming ACOs, CMS is offering a number of learning opportunities for providers, including the third Accelerated Development Learning Session on Nov. 17-18 in Baltimore. For more information, visit


The Shared Savings Program final rule is posted at:  
The Advanced Payment solicitation is posted at:
For more information, fact sheets are posted at: and
Federal Register Rules 

Medicare Shared Savings Program: Accountable Care Organizations (CMS-1345-F):  

Medicare Shared Savings Program Final Waiver (CMS-1439-IFC): 

Advanced Payment Model Initiative (CMS-5505-N):
OIG Medicare Program: Final Waivers in Connection With the Shared Savings Program: hjujh

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