On Monday, CMS released draft regulations that revise and expand the use of accountable care contracts under the Medicare Shared Savings Program.
The Shared Savings Program rewards hospitals and medical groups that meet quality targets and slow spending on healthcare.
The new proposed rule would alter the Medicare Shared Savings Program.
Out with the old…
The 2011 rules require accountable care organizations (ACOs) to either:
- Face penalties after the first three years, or to
- Volunteer to assume downside financial risk earlier on, in exchange for bigger bonuses if they do well.
In with the new…
The new proposed rule acknowledges that the penalties after three years might be too much for organizations that lack the ability to achieve the quality targets. Under the revised structure, Medicare would no longer require organizations to face penalties after the third year.
But is it all good news for ACOs?
While the new proposed rule takes into account the challenges that face ACOs, it also has a risk of penalties for all ACOs after six years in the program.
CMS has also proposed reduced potential bonuses after year three, to make the riskier track more appealing to ACOs.
CMS has also proposed a third track that uses different methods to identify which patients are included in the ACO. This track would allow ACOs to keep up to 75% of what they save, but they would also be responsible for up to 75% of their losses. CMS capped bonuses at 20% of ACOs’ benchmarks and losses at 15%.
The Medicare Shared Savings Program is one of the most apparent efforts under the law to deal with the nation’s healthcare bill.
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