The financial success-or failure-of organizations getting into the Medicare Shared Savings program is weighted heavily on the quality scores contained in the final accountable care organization rule.

That's the word from Mark Hamelburg, a senior counsel at law firm SNR Denton, during a Health Data Management Web seminar on Oct. 27 about the final ACO rule, released last week by the Centers for Medicare and Medicaid Services. Hamelburg and Bruce Merlin Fried, a partner at SNR Denton, walked through myriad provisions of the rule.

In a series of detailed slides, Hamelburg laid out the math for formulas to assess potential value of ACO payment options 1 and 2, and determining quality scores. He then showed scenarios of an ACO with a quality score of 0.8125 receiving savings of $859,574.87 in option 1, compared with ACO with a quality score of 0.5 getting $528,969.15. In payment option 2, the higher scoring ACO would receive $1,031,489.84 while the lower scoring ACO gets $634,762.98.

But if an ACO under payment option 2 suffers losses, the real difference in quality scores shows up. The higher scoring ACO would lose $1,084,386.76, only about $52,897 more than its projected savings.  The loss for the ACO with the lower quality scores would be $1,269,525.90, which would be double its projected savings.

There is flexibility under the final rule to reduce losses if they should occur, Hamelburg noted. CMS, in the proposed rule, would have locked in risk scores based on a benchmark population of Medicare FFS beneficiaries for three years prior to the ACO. Now under the final rule, if the actual beneficiary population of the ACO is sicker, there's some room for changing the risk scores.

The Web seminar, "It's Final: What You Need to Know About the ACO Rule," soon will be archived and available at


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