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Accountable Care Organizations Regulations Passed This Week

Posted In Health Care Law

The final rule for accountable care organizations (“ACO”s) released by the Obama Administration this week addresses many of the criticisms received by the proposed rule, which was published this spring.  ACOs have been touted as one of the more promising initiatives of the Affordable Care Act because they aim to reduce the costs of caring for Medicare beneficiaries while improving quality of care by allowing provider partnerships to coordinate care, share medical records, and minimize duplicative tests and medical errors.

In general, the final rule allows more provider flexibility.  Under the new rule, ACOs may choose a track in which they share in any savings produced for Medicare but are not penalized if they increase spending or if their costs exceed government targets.   Providers who agree to assume more risks, will receive a greater share of Medicare savings.  The final rule also reduces the quality measures from the proposed 65 measures to 33, which address patient experience, care coordination and patient safety, preventive health care and care for at-risk populations.  In addition, the final rule removes the requirement regarding adoption of electronic health records and makes government anti-trust reviews voluntary, rather than required.

Much of the changes can be described as efforts to increase participation by removing deterrents and adding incentives.  CMS actuaries estimate that somewhere between 50 and 270 providers will form ACOs over the program’s initial three and a half years and save the Medicare program about $470 million dollars over the next four years.  Because the document is almost 700 pages, public reactions have been vague and cautious but the murmurs suggest providers are generally pleased with the loosened rule.

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