Medicare ACOs Move Closer to Commercial Model Under Final Rule

Margaret Dick Tocknell, for HealthLeaders Media , October 21, 2011

The Department of Health and Human Services is making Medicare accountable care organizations look more like commercial ACOs in effort to gain the interest of providers. A sweeping set of revisions to the final rules governing Medicare ACOs was announced by the Centers for Medicare & Medicaid Services Thursday.

Prospective assignment, advanced payment, and accelerated shared savings are among the commercial ACO features that will now be available in Medicare ACOs, explains Michael Nugent, managing director of managed care practice for Navigant Consulting. Nugent said he had already fielded calls on Thursday from providers who want to take a second look at ACOs.

Retrospective assignment as presented in April in the proposed ACO rules was a stumbling block for provider participation. Providers said they couldn't manage risk if they didn't know who their patients were. The final rules use prospective assignment, which will allow hospitals and physicians to know upfront the Medicare beneficiaries assigned to their ACO. This is the approach commercial plans have always taken.

Advanced payment will be used to help the Medicare ACOs cover capital reserves, short-term losses, and other expenses. Blue Shield of California recently provided about $20 million to 18 California hospitals, health systems, clinics and physician groups to help the health information systems that ACOs need to share clinical information.

Commercial payers use accelerated shared savings to help offset the reduced utilization experienced by providers in ACOs. Initially the Medicare program was expected  retain the early savings; under the final rules Medicare ACOs will have quicker access to their shared savings dollars.

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