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HHS Unveils Proposed New Rules for Accountable Care Organizations

By Christopher Adams, MS, Program Manager

The Patient Protection and Affordable Care Act of 2010 directed the Secretary of Health & Human Services (HHS) to establish the Medicare Shared Savings Program by January 1, 20121. Under this new program, eligible providers will be permitted to coalesce as Accountable Care Organizations (ACOs) in an effort to provide more efficient and higher quality health care to Medicare fee-for-service beneficiaries under Medicare Parts A and B. If an ACO subsequently reaches certain quality performance benchmarks, they will then be eligible to receive supplemental remuneration from the federal government.

While the loose framework for this new program was prescribed in the statute, the heavy lifting was left to HHS via the regulatory process. In late March 2011, HHS formally unveiled the proposed rule for ACOs and subsequently provided for a 60-day public comment period2. The proposal, which is voluminous in its scope, was released in conjunction with related guidance from other federal agencies. For instance, the Federal Trade Commission and the Department of Justice issued a proposed policy statement that details how the agencies will enforce anti-trust law as it relates to ACOs3. The Internal Revenue Service (IRS) also solicited public feedback on whether additional guidance is needed for those tax-exempt organizations that choose to participate in the Medicare Shared Savings Program4. Nevertheless, much of the initial focus has been on the initial proposal from HHS and its planned construct for ACOs.

While comprehensive summaries of the proposed HHS rule abound, the macro-level intent is to codify value-based purchasing, which HHS describes as "a concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high quality, efficient clinical care5." While the notion of paying for value is not new, the advent of ACOs is. By bringing together a diverse group of providers under one legal umbrella and providing tangible financial incentives to them, it is hoped that some of the inefficiencies that currently plague our health care delivery system will begin to dissipate. Of course, whether or not ACOs are the appropriate vehicle to achieve that goal is currently open for debate.

As the key stakeholders in the health care delivery system begin to digest the scope of HHS's regulatory approach, the only thing that is certain is that the initial proposal will evolve prior to being published in its final form. Nevertheless, its release into the public domain has ignited an important national discussion about which mechanisms and incentives should be employed to enhance care and reduce costs in the oncology space and beyond. That alone has value.

1 U.S. Government Printing Office, Public Law 111-148. (Accessed May 18, 2011).
2 U.S. Department of Health & Human Services, News Release: Affordable Care Act to improve quality of care for people with Medicare. (Accessed May 18, 2011).
3 U.S. Federal Trade Commission, FTC, DOJ Seek Public Comment on Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations. (Accessed May 19, 2011).
4 U.S. Internal Revenue Service, Notice 2011-20. (Accessed May 19, 2011).

5 U.S. Department of Health & Human Services, 42 CFR Part 425: Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. (Accessed May 20, 2011).

 

 

 

 

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