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CMS Issues Final ACO Rule to Increase Provider Participation

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CMS Issues Final ACO Rule to Increase Provider Participation

October 21, 2011

On Thursday, the Centers for Medicare and Medicaid Services (CMS)issued a final rule on accountable care organizations (ACOs)that includes major changes aimed at making the voluntary program more appealing to providers. This decision comesafter the proposed rule on the health reform law's key delivery system reform received vocal criticism from hospital and physician groups as being unworkable and too burdensome to pursue without substantial modifications.


Agency officials hope the revisions will draw as many as two times the number of participants earlier expected and say federal savings from ACOs could be up to $940 million over four years.


CMS also scaled back the number of quality measures in the final version. The final rule says ACOs in the first year will have the option to get paid for the reporting of all 33 quality measures, but pay-for-performance requirements will be phased in over the three-year period.


A CMS official said that in the second year, ACOs will have pay-for-reporting-and-performance for 25 of the 33 measures, and in the third year, there will be pay-for-reporting-and-performance for all but one of the measures.


The ACO program will be established by January 1, 2012, with the first round of applications due in early 2012. The first ACO agreements will start on a rolling basis from April 1 through July 1.