Oct 21, 2011

Administration Unveils Final Rules For ACOs

Posted by: Neal Stehly

The Administration's release of final rules for accountable care organizations received widespread print media coverage. Overall, the reaction to the rules was positive, as Politico notes, although the Washington Post says that insurer and employer groups expressed certain concerns. The Washington Post (10/21, Aizenman) reports, "The Obama administration on Thursday substantially revised the rules of a program under the 2010 health-care law aimed at encouraging doctors and hospitals to coordinate care. The final regulations grant medical providers far more flexibility than a draft proposal released in March." These rules for accountable care organizations (ACOs) were "greeted with jubilation by groups representing doctors and hospitals," although "insurers and employers complained that the administration's concessions increased the likelihood that providers will consolidate, reducing competition and driving up prices."

        The Wall Street Journal (10/21, Radnofsky, Subscription Publication) says that healthcare facilities that decide to participate in ACOs will face less financial risk as a result of the new rules. They will not be responsible for paying for some losses if prices increase, instead of decrease. But, providers which accept the risk will be entitled to a greater share of savings.

        The Los Angeles Times (10/21, Levey) reports, "The rules will reward healthcare providers who form partnerships to reduce the cost of caring for Americans on Medicare while also boosting quality, two goals of the sweeping overhaul the president signed last year." ACOs "have been held up by many experts as one of the most promising remedies for the poor outcomes and high costs that bedevil the American healthcare system." CMS Administrator Donald Berwick said that the partnerships "can represent a very big step forward in helping to transform Medicare, Medicaid and the Children's Health Insurance Programs so they can help assure high quality, seamless and less costly healthcare."

        The AP (10/21) reports that under the rules, "health care providers will be able to start forming accountable care organizations in 2012 to coordinate care, share records, and cut down on duplicative tests and medical errors." They "will have to make a three-year commitment to care for a group of at least 5,000 Medicare patients if they form...ACOs."

        Bloomberg News (10/21, Eisenberg, Wayne) reports, "The final rules make government antitrust reviews voluntary, a change from the original agreement between the Justice Department and the Federal Trade Commission issued in March." Notably, "investor-owned hospital systems, represented by the Federation of American Hospitals, had criticized requiring antitrust reviews before companies could participate, saying it would be 'a significant deterrent' to participation."

        CQ (10/21, Norman, Subscription Publication) reports, "Reaction to the final rule for accountable care organizations...was cautiously optimistic. But health care providers warned that they were continuing to study the fine print of the 696-page document, and no one was ready to declare the revised regulation a home run."

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