After an hour of examining the accountable care organization proposed rule during a Web seminar that Health Data Management hosted on April 5, the last question was probably the best: "Why would anyone do this?"

"Well, that's the question I think will be asked in many board rooms," answered Bruce Merlin Fried, a presenter and partner at SNR Denton, a Washington-based law firm.

Co-presenter and attorney Robert Slavkin of Orlando-based Akerman Senterfitt LLP noted that providers increasingly are looking at ways to improve outcomes while cutting costs because it's the right thing to do and clearly the direction that government reimbursement is heading toward. Fried buttressed that belief by noting the establishment of ACOs isn't just a Medicare undertaking, but also a clear trend emerging among commercial insurers.

Other observations from Fried and Slavkin include:

* There's a lot to worry about in the rule, but the Centers for Medicare and Medicaid Services virtually begs for industry comment on a wide variety of issues, so don't freak out. "These are proposed rules and the government is really asking, strikingly, for everyone's opinions," Slavkin said.

* A final rule likely won't be seen before Sept. 1, Fried predicted.

* Clarification is needed in such areas as the types of providers eligible to participate in a Medicare Shared Savings Program ACO, and what "sufficient" numbers of primary care physicians to care for a 5,000-member ACO means.

* Organizations forming a Shared Savings ACO must enter into a data usage agreement with CMS, which will provide Medicare claims and drug utilization data on beneficiaries in the ACO. The data will support disease management, care coordination and risk stratification activities. Medicare beneficiaries may decline to permit their Medicare data to be shared with providers and remain in the ACO.

* Privacy and security obligations under HIPAA will continue to apply in Shared Savings ACOs. But the governing ACO entities will need new business associate agreements with participating providers.

* The proposal that at least 50 percent of an ACO's primary care physicians be meaningful EHR users by the start of the second year of the Shared Savings Program is a requirement that most organizations simply can't meet today and should get a lot of public comments. "I'd be astounded if that's not a significant topic of conversation," Fried said.

* Beneficiaries in an organization that has joined a Shared Savings ACO will be notified and can continue to see their physician and be assigned to the ACO. But beneficiaries who do not wish to be in the ACO must find a non-participating physician.

* A primary care physician can be associated with only one ACO.

* Providers participating in Shared Savings can qualify for waivers from regulations covering physician self-referrals, anti-kickback statutes and gainsharing, but the waivers cover only care under Shared Savings.

* To succeed in the Shared Savings Program, small ACOs will have to save 3.9 percent above the savings benchmark and large ACOs will have to save 2 percent above the benchmark.

* Providers considering joining a Shared Savings ACO should be financially able to wait 18 to 24 months before any savings are paid to the ACO. Further, CMS will hold back 25 percent of shared savings to cover if an ACO has a year in which costs are higher then the benchmark.

* While the health reform law mandates Shared Savings start on Jan. 1, 2012, CMS recognizes more time is needed for many organizations to get ready. Consequently, contracting can begin on July 1, in which case the first year would actually be an 18-month year and the three-year commitment would end Dec. 31, 2015.

The Web seminar recording will available be available soon via the Health Data Management Web site. The event was sponsored by RelayHealth and SAP.

--Joseph Goedert


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