CMS Issues Guidance On ACOs

At this juncture, healthcare providers, to a greater or lesser extent, have begun to acquire at least a basic understanding of the recent federal health reform legislation, commonly known as the Patient Protection and Affordable Care Act (PPACA). At the same time, many in the provider community are looking beyond the contours of the PPACA, in its current iteration, and are developing strategies to prepare for its future implications. One of the approaches eliciting significant interest, especially among aggregations of physicians such as physician organizations (or POs ), is establishing or participating in a Medicare Accountable Care Organization (ACO), as such term is used in PPACA, due to the potential financial benefits for which ACOs likely will be eligible.

By way of a general overview, under PPACA, ACOs comprise groups of healthcare providers who will enter a written agreement with Medicare to be accountable for a certain number of Medicare fee-for-service beneficiaries (at least 5,000) in exchange for certain Medicare payment incentives under the ACO Shared Savings Program. Such financial benefits will be based upon the achievement of certain defined quality and efficiency benchmarks. PPACA mandates that the Secretary of the Department of Health and Human Services establish the Medicare Shared Savings Program (the Program) for ACOs no later than January 1, 2012. Thus, although the specific elements of the Program have not been promulgated, proactive POs, as well as other provider entities (such as physician-hospital organizations), can begin to structure their operational frameworks in a manner reasonably calculated to enable them to take advantage of participation in Program.

As a signal that progress on the ACO front can be expected, just ahead of the Memorial Day Holiday weekend, the Centers for Medicare & Medicaid Services published constructive guidance regarding ACOs and the related financial incentives that will be available. Such CMS guidance can be found in these Preliminary Questions & Answers.

Please contact Carey Kalmowitz, Esq., Abby Pendleton, Esq., Adrienne Dresevic, Esq. or Esq. with any questions regarding ACOs or the related anticipated Medicare financial incentives. Carey, Abby, Adrienne and Kate can be contacted at (248) 996-8510 or (212) 734-0128.

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