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Do you have what it takes to be part of an ACO?

Posted by ClearDirections on April 9th, 2011 in Accountable Care Organization, Financial, Hospital Management, Patient Protection and Affordable Care Act | No Comments

Reading the 460+ pages of proposed ACO regulations (42 CFR Part 425 to be exact) has been a daunting task, but a necessary one for those of us who will lead the world of healthcare through this unprecedented sea change to our system. To help you wrap your organization’s strategy around this new concept, we will break down the salient parts of the regs for our readers, bit by bit.

One of the most important features of the new regs is the “three-legged stool” of the Shared Savings Program:
– to provide better care for individuals;
– to encourage better health for the whole population; and
– to lower the growth of healthcare expenditures.

The Shared Savings Program promotes accountability for a patient population’s health, coordinates patient care and encourages providers to invest in infrastructure and redesigned care processes for high quality and efficient service delivery. This Shared Savings Program will be in place by January 1, 2012, according to the proposed regs. Now, the key is how to qualify to participate in the Shared Savings Program.

The new regs outline several requirements to be eligible to be part of an ACO. Providers must be willing to:

1. Become accountable for the quality, cost and overall care of the Medicare FFS beneficiaries assigned to them;

2. Enter into an agreement to participate in the ACO for at least three years;

3. Have a formal legal structure that allows the organization to receive and distribute payments for share savings to the participating providers;

4. Include enough primary care ACO professionals sufficient for the number of beneficiaries assigned to the ACO, and each ACO will have a minimum of at least 5,000 beneficiaries assigned to it;

5. Provide CMS with any information the government deems necessary to support three things: the assignment of Medicare beneficiaries to the ACO, the implementation of quality and other reporting requirements, and the determination of payments for shared savings;

6. Have in place a leadership and management structure that includes clinical and administrative systems;

7. Define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care (i.e., telehealth and remote patient monitoring); and

8. Demonstrate that they meet patient-centeredness criteria specified by CMS (think HCAHPS), such as the use of patient and caregiver assessments or the use of individualized plans.

Just a few things … right? Well, take a day to digest this portion of the regs and we’ll explain later how CMS has proposed very detailed specific formulas to determine how the Shared Savings Program works. Hint … providers won’t receive a portion of ALL of the savings they deliver to Medicare. CMS has proposed a Minimum Savings Rate or MSR that ranges from 2.0% to 3.9% before an ACO can begin sharing in the savings. More to come on this in future posts.

If you enjoyed this material, please share it with other healthcare executives you know, so we can help them get their heads around ACOs quickly and painlessly to position them to compete better in the brave new world of ACOs.

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