The accountable care organization proposed rule shows the Centers for Medicare and Medicaid Services really listened to industry concerns as it wrote the provisions, contends Paul Keckley, executive director at Deloitte Center for Health Solutions, a research arm of consultancy Deloitte LLP.

"They heard that not everyone was ready to be in an integrated group," Keckley says.  For instance, the rule addresses concerns with ACOs running afoul of federal fraud, abuse and referral laws. The rule also recognizes the varying level of readiness of organizations to participate in the Shared Savings Program by setting up two ways to participate.

Under the One-Sided Model, a group of providers will receive 50 percent of savings if the group achieves certain thresholds of efficiency and quality, but there's no downside risk during the first two years of the three-year program. It's basically a pay-for-reporting program for the first two years to share savings as long as those thresholds are met, Keckley says. Under the Two-Sided Model, a group of providers assumes risk and can receive 60 percent of savings if the targets are hit. But if targets aren't hit and providers spend more money than they should, they'll have to pay back funds to Medicare. And the targets are high--providers have to score in the 95th percentile or above for each of 65 quality measures.

Advanced use of information technology will be necessary for ACOs to succeed, according to Keckley. Extensive connectivity between providers, between providers and patients, and care management and patient coaching are all major components of the ACO model.

Consequently, integration of clinical and administrative data at the points of service will require investments in dashboard technology, and closer relationships with patients will require investments in technologies supporting online consultations, personal health records and remote monitoring of vital signs and other patient health status measures. "Organizations accelerating their meaningful use activities will be the best candidates," Keckley says.

Most important, ACOs can't be viewed in a vacuum, Keckley advises, as the industry will change if the model takes off. "This is really about integration and consolidation." That means more physicians will be coming under a hospital's control as employees, or hospitals and physician groups will merge their assets into not-for-profit entities.

For now, however, the goals and scope of Shared Savings Program are relatively modest--it's targets are up to 5 million Medicare enrollees and expected total savings of $980 million over three years (of which providers in total could get up to $510 million) so it's not going to be the dominate way to manage Medicaid beneficiaries, he notes.

--Joseph Goedert


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