HHS Releases ACO Final Regulations

Responding to concerns about the initial Accountable Care Organization (ACO) rules, the U.S. Department of Health and Human Services (HHS) has made several concessions. Under the final ACO regulations:

• Providers will be able to participate in an ACO and share in savings with Medicare without risk of losing money. And, ACOs will be able to start sharing in the savings earlier rather than letting Medicare retain it all initially.
• ACOs will have to meet fewer quality measures — 33 versus the original 65 — to qualify for performance bonuses.
• Rather than waiting until their contract ends, ACOs will be told when they form which Medicare beneficiaries are likely to be a part of their system.
• Community health centers and rural health clinics, which were initially left out of the proposal, will be allowed to lead ACOs.
• And, the timetable for the launch of the ACOs was relaxed, allowing groups to apply throughout 2012.

ACOs are a key provision in the health law to slow rising healthcare costs while delivering high-quality care to Medicare beneficiaries. They are designed to change the incentives that influence how doctors and hospitals operate by rewarding providers for holding down costs and meeting certain quality measures, such as reducing hospital readmissions or emergency room visits.