Friday, October 21, 2011

Final Rule Addresses ACO Criticism

At their first announcement, the Centers for Medicare and Medicaid Services’ rules for ACOs caused an uproar. Accountable Care Organizations will reward medical providers that meet certain quality of care requirements, but health professionals found the rules to be needlessly complicated, hard to follow, and unrealistic. CMS responded quickly, committing to rework and improve the rule set.

On October 20th, the proposed changes, collectively called the final rule, released to public acclaim. CMS Administrator Dr. Donald Berwick told Kaiser Health News, “We have been able to fine tune and improve the rules for a range of stakeholders, providers and patients.” Across the board, health industry officials are praising CMS for the new rule changes, and it seems that these requirements will finally move toward improving the country’s health care. put together a table outlining the changes CMS made. We have an excerpt below, or you can view the full table here.


Proposed rule

Final rule

Transition to risk in Track 1

ACOs offer two tracks. Track 1 would entail two years of one-sided shared savings; then participants would have to transition in third year to a performance-based risk, two-sided model of savings and losses.

ACOs still offer two tracks. Track 1 now removes two-sided risk.

Prospective vs. retrospective

Retrospective assignment based on primary care service use, with prospective identification of benchmark population

Preliminary prospective-assignment with beneficiaries identified quarterly, with final reconciliation after each performance year

Quality measures

65 measures in 5 domains

33 measures in 4 domains

Shared savings

One-sided risk model: Sharing begins at savings of 2 percent
Two-sided risk model: Sharing on first dollar

Share on first dollar for all ACOs in both models once min. savings rate is achieved


Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at

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