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HHS Final Rule for ACOs – Increased Incentives, Increased Provider Participation

October 21, 2011

If you’ve been following our blog and industry commentary on a regular basis, you know that the topic of ACOs is a considerable interest to DiagnosisOne, based on its focus on the core concepts of evidence-based medicine, clinical decision support, continuous quality improvement and accountability, as well as the sizeable impact ACOs are expected to have on health care. The Obama administration estimates that Accountable Care Organizations could save the government up to $940 million from 2012 through 2015.

This week, The U.S. Department of Health and Human Services issued final rules today on Medicare Accountable Care Organizations (ACOs). Totaling a formidable 694 pages, the document includes key guidance for ACOs, which are intended to transform health care to be more patient-centered, cost-efficient, coordinated and outcomes-focused. Based on our early analysis of the changes included in the final rules, they key changes we’ve identified so far include:

Greater Incentives and Quicker Access to the Incentive payments – This change will likely deliver the largest boost to encourage provider participation.  Previously, ACO members would only receive shared savings after they had reached 2% savings.  This would mean a longer time to realize a return on IT and infrastructure investments.  The final regulations allow for providers to realize shared savings immediately.

Reduction in the Quality Measures Required for ACO entry – To help drive greater participation, quality measures that ACOs will have to meet to qualify for performance bonuses have been reduced to 33 from 65. In the long run, these measures will have the greatest impact on cost reduction and quality improvement.  Despite the reduction, the 33 remaining measures are the most critical, most relevant, and most expensive areas.

Prospective Assignment of Patients – One objection to ACO regulations had been that patients would be assigned to the ACO retrospectively.  In that scenario, clinicians wouldn’t know for potentially months if they would be getting shared savings on a patient.  The final regulations allow for patients to be
assigned prospectively, so they will know in advance who their included beneficiaries are.  This again will encourage greater participation.

We will continue to provide additional guidance and commentary on the significance of the ACO rules over the coming weeks, and look forward to delivering continued innovation to our hospitalpayor and EMR clients on new methods to help them meet the challenge.

As the ACO model continues to gain momentum in the market, we will be there to give providers the capabilities they need to ensure that each care encounter is as informed as possible, and each health system leader has the information required to design effective health improvement strategies.
Armed with these capabilities, they will be uniquely positioned to reap the financial windfalls associated with consistently providing evidence-driven, informed care.

by Mansoor Khan, Sc.D.

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