Making Good on ACOs' Promise — The Final Rule for the Medicare Shared Savings Program
N Engl J Med 2011; 365:1753-1756November 10, 2011DOI: 10.1056/NEJMp1111671
Comments open through November 16, 2011
During my career as a practicing pediatrician, my patients and I benefited from being part of a well-managed system of care, coordinated and financed to support seamlessness and patient-centeredness. We had an electronic health record — always available and up to the minute — which reminded me when a test or follow-up was due. For children with severe asthma, I worked as part of a team, with a home health nurse to teach skills and anticipate needs, an allergist instantly available as a coach, pharmacists to help plan care and detect errors, and advanced practice nurses to ensure 24/7 access. As a result, my patients stayed out of emergency rooms and hospital beds, remaining at home and in school, where they belonged. Function improved and costs fell.
The dedicated professionals in the U.S. health care system work to deliver the highest-quality health care they can. But as any health care provider will tell you, our system is full of roadblocks, red tape, and frustrations that keep them from practicing the type of medicine that most clinicians envisioned when they chose their noble field.
Physicians, nurses, and other health care professionals want the support required to work with engaged patients to make the clinical decisions most appropriate to their circumstances; to collaborate with colleagues to provide a safe, seamless experience; and to be paid for keeping people well. Instead, the status quo — with inadequate dissemination of usable clinical information, misaligned financial incentives, and in many cases, inertia — is rife with barriers to the coordinated care that patients want, providers want to give, and our unsustainable system so desperately needs.
To be sure, exactly this type of medicine is practiced every day in hundreds of places throughout the country. Innovative entrepreneurs and dedicated clinicians have found ways to break down barriers and redesign care to better help their patients and communities. But bringing the best of our system to every community in the country is the health care challenge of our time.
Eighteen months after President Barack Obama signed the Affordable Care Act, the Department of Health and Human Services (DHHS) has created a broad array of pathways for health care providers to begin — or in many cases, accelerate — their care-improvement journey in partnership with the Medicare and Medicaid programs and in synergy with the private sector. Today, the DHHS is taking its next major step by finalizing the rules for the establishment of accountable care organizations (ACOs) under the Medicare Shared Savings Program created by Section 3022 of the health care reform law.
ACOs are voluntary groups of physicians, hospitals, and other health care providers that are willing to assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to them on the basis of patients' use of primary care services. If an ACO succeeds in both delivering high-quality care or improving care and reducing the cost of that care below what would otherwise have been expected, it will share in the savings it achieves for Medicare.
Under the ACO model, Medicare beneficiaries are still free to seek care from any Medicare provider they wish. Indeed, Medicare beneficiaries should find their care experience enhanced by a program that supports providers in engaging with their patients to deliver on the three-part aim: better care for individuals, better health for populations, and lower cost growth through improvements in care.
The DHHS proposed its initial set of guidelines for ACOs on March 31, 2011, and sought widespread comment on both the direction and the details of this important new program for Medicare. We at the Centers for Medicare and Medicaid Services (CMS) received more than 1200 formal comments from throughout the health care community, supplemented by feedback at dozens of informal listening sessions. The vast majority of the comments we received were supportive of the vision of the Shared Savings Program and optimistic about the potential for ACOs to be a force for change in our broken health care system. However, numerous suggestions were also offered for improvements to the proposed rule that would lead to a larger, more pluralistic set of ACO participants without compromising patient outcomes or choice. In particular, commenters asked CMS to reduce barriers to entry by streamlining governance and reporting burdens on potential ACOs; improve the potential financial return for ACOs willing to make the necessary, and often substantial, investments to improve care; and ensure beneficiary protections.
In response, CMS is making several significant changes in its final rule to strengthen the ACO program for providers and beneficiaries alike (see tableProposed Rule vs. Final Rule for Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program.). Major changes include providing better, and more timely, information to ACOs at the outset of the performance year through preliminary prospective alignment of beneficiaries (while retaining a retrospective reconciliation to ensure that ACOs are measured on the basis of the patients they actually care for during the year); retaining a strong monitoring and quality-measurement mechanism while streamlining the metrics to focus on what matters most, including reducing the total number of quality measures by about half; allowing start-up ACOs to choose a “savings only” track without financial risk during their initial contract period; sharing savings with successful ACOs on a “first dollar” basis when the ACO achieves meaningful savings for the Medicare program and improves care or provides high-quality care; and creating a pathway for full participation of federally qualified health centers and rural health clinics that provide a primary care safety net for Medicare beneficiaries in underserved areas.
Taken together, these changes and numerous others create a more feasible and attractive on-ramp for a diverse set of providers and organizations to participate as ACOs. In addition, the Center for Medicare and Medicaid Innovation is announcing today an advanced payment initiative that will allow small physician practices and rural community hospitals that face particular challenges in forming ACOs to receive up-front access to needed capital.
For established organizations with a track record of providing robust coordinated care, the CMS innovation center is offering a pioneer ACO program designed to encourage and support the next wave of innovation from vanguard organizations that are positioned to help realize the full potential of the ACO model. And for organizations and clinicians not yet prepared to make the transition to ACOs, the DHHS is offering a menu of alternative options — including a comprehensive primary care program, bundled payments for care improvement, and a community-based transitional care program — that all seek to provide the incentives and supports necessary to move the mainstream of U.S. health care toward accountable care.
Whether provided through ACOs or an alternative innovation opportunity, coordinated care is meant to allow providers to break away from the tyranny of the 15-minute visit, instill a renewed sense of collegiality, and return to the type of medicine that patients and families want. For patients, coordinated care means more “quality time” with their physician and care team (a patient's advocate in an increasingly complex medical system) and more collaboration in leading a healthy life. And for Medicare, coordinated care represents the most promising path toward financial sustainability and away from alternatives that shift costs onto patients, providers, and private purchasers.
We believe that today's ACO rule is the next step in our shared commitment to a better, more lasting health care system. We look forward to being a trusted partner in our nation's journey toward patient-centered, coordinated care.
Disclosure forms provided by the author are available with the full text of this article at NEJM.org.
This article (10.1056/NEJMp1111671) was published on October 20, 2011, at NEJM.org.
Dr. Berwick is the administrator of the Centers for Medicare and Medicaid Services, Baltimore.
- Citing Articles (20)
Greg Arling, Wanzhu Tu, Timothy E. Stump, Marc B. Rosenman, Steven R. Counsell, Christopher M. Callahan. (2013) Impact of Dementia on Payments for Long-term and Acute Care in an Elderly Cohort. Medical Care 51:7, 575-581
L. J. Stark. (2013) Introduction to the Special Issue on Adherence in Pediatric Medical Conditions. Journal of Pediatric Psychology
TERYL K. NUCKOLS, JOSÉ J. ESCARCE, STEVEN M. ASCH. (2013) The Effects of Quality of Care on Costs: A Conceptual Framework. Milbank Quarterly 91:2, 316-353
Jessica L. Mellinger, Michael L. Volk. (2013) Multidisciplinary Management of Patients With Cirrhosis: A Need for Care Coordination. Clinical Gastroenterology and Hepatology 11:3, 217-223
Hui Xue, Joachim H. Ix, Weiling Wang, Steven M. Brunelli, Michael Lazarus, Raymond Hakim, Eduardo Lacson. (2013) Hemodialysis Access Usage Patterns in the Incident Dialysis Year and Associated Catheter-Related Complications. American Journal of Kidney Diseases 61:1, 123-130
Nathan R. Selden, Zoher Ghogawala, Robert E. Harbaugh, Zachary N. Litvack, Matthew J. McGirt, Anthony L. Asher. (2013) The future of practice science: challenges and opportunities for neurosurgery. Neurosurgical Focus 34:1, E8
Andrew W. Helfgott. (2012) The patient-centered medical home and accountable care organizations. Current Opinion in Obstetrics and Gynecology 24:6, 458-464
Bruce L. Jacobs, Yun Zhang, Ted A. Skolarus, John T. Wei, James E. Montie, Florian R. Schroeck, Brent K. Hollenbeck. (2012) Managed Care and the Diffusion of Intensity-modulated Radiotherapy for Prostate Cancer. Urology 80:6, 1236-1242
Kevin J. Bozic. (2012) Improving Value in Healthcare. Clinical Orthopaedics and Related Research®
Richard G. Abramson, Paul E. Berger, Michael N. Brant-Zawadzki. (2012) Accountable Care Organizations and Radiology: Threat or Opportunity?. Journal of the American College of Radiology 9:12, 900-906
Lora A. Reineck, Jeremy M. Kahn. (2012) Pay-for-Performance in Pulmonary Medicine. Clinical Pulmonary Medicine 19:5, 206-214
Len M. Nichols. (2012) Accountable Care Organization Pathways: Diverse but Ultimately Parallel. Mayo Clinic Proceedings 87:8, 710-713
David J. Ballard. (2012) The Potential of Medicare Accountable Care Organizations to Transform the American Health Care Marketplace: Rhetoric and Reality. Mayo Clinic Proceedings 87:8, 707-709
Ramin Khorasani. (2012) Capturing the Cognitive Input of Radiologists in the Care Process: Next-Generation Health IT Requirements. Journal of the American College of Radiology 9:6, 393-394
Allen R. Nissenson, Franklin W. Maddux, Ruben L. Velez, Tracy J. Mayne, Jess Parks. (2012) Accountable Care Organizations and ESRD: The Time Has Come. American Journal of Kidney Diseases 59:5, 724-733
Jeffrey L Schnipper, Jeffrey M Rothschild. (2012) Improving medication safety. The Lancet 379:9823, 1278-1280
Fineberg , Harvey V. , . (2012) A Successful and Sustainable Health System — How to Get There from Here. New England Journal of Medicine 366:11, 1020-1027
Free Full Text
Walker , James , McKethan , Aaron , . (2012) Achieving Accountable Care — “It's Not About the Bike”. New England Journal of Medicine 366:2,
Free Full Text
Kimberly M. Lovett, Bryan A. Liang. (2012) Accountable Care Organizations. Pathology Case Reviews 17:4, 157-159
Fisher , Elliott S. , McClellan , Mark B. , Safran , Dana G. , . (2011) Building the Path to Accountable Care. New England Journal of Medicine 365:26, 2445-2447
Free Full Text
- Comments (4)