Accountable Care Organizations and Delivery System Reform

Last Updated: 12/28/11 

The Affordable Care Act includes a range of provisions meant to drive health care delivery system reform that will satisfy the “Triple Aim” of improving health, improving patient experience, and reducing per capita costs. Our comprehensive summary and timeline describe the many delivery system-related provisions that may present challenges and opportunities for you and your organization as implementation progresses.

From incentives to reduce unnecessary hospital admissions and readmissions, to fostering patient-centered care and medical homes, to moving to a performance-based system of paying for services, to development and use of health information technology, Ropes & Gray will be tracking the latest developments. 

Accountable Care Organizations 

The Affordable Care Act (“ACA”) embraced Accountable Care Organizations (“ACOs”) as a delivery system model that promotes coordination and integration. Viewed broadly, an ACO is an organizational structure for provider collaboration, care coordination and financial risk-sharing. To implement the ACO concept, CMS created the Medicare Shared Savings Program and the Center for Medicare and Medicaid Innovation (“CMMI”) launched the Pioneer ACO Model.

Medicare Shared Savings Program

Section 3022 of the ACA directed the Department of Health and Human Services (“HHS”) to establish by January 1, 2012 a “shared savings” program within the Medicare fee-for-service reimbursement system that promotes accountability for patients, coordination of care under Medicare Part A and Part B and investment in infrastructure and care redesign. On October 20, 2011, the Centers for Medicare and Medicaid Services (“CMS”) issued final regulations to implement this Shared Savings Program. Also on that date, other Federal agencies issued final documents that address legal issues affecting ACOs participating in the Shared Savings Program. The Federal Trade Commission and Department of Justice issued a final policy statement on antitrust enforcement regarding ACOs participating in the Shared Savings Program. The HHS Office of Inspector General and CMS jointly issued an interim final rule establishing waivers of the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law for activities conducted in connection with the Shared Savings Program. The Internal Revenue Service also posted a Fact Sheet with Questions and Answers regarding tax-exempt organizations’ participation in the Shared Savings Program. The Shared Savings Program begins April 1, 2012, and a second start date of July 1, 2012 is available. The last day to submit a Notice of Intent to apply for participation in the Shared Savings Program for the April start date is January 6, 2012 and for the July start date is February 17, 2012.

Pioneer ACO Model

The Pioneer ACO Model is distinct from the Shared Savings Program. Designed for health care organizations and providers who have experience in care coordination and risk-sharing, the Pioneer ACO Model is one of the programs developed by the CMMI to “test innovative payment and service delivery models.” The Pioneer ACO Model entails a shared savings and shared losses payment arrangement with higher levels of potential reward and risk than in the Shared Savings Program. ACOs that earn savings over the first two years will be eligible to move in the third year to a population-based payment model under which the ACO will receive a prospective per-beneficiary per-month payment. Pioneer ACOs are required to develop outcomes-based payment arrangements with payers other than Medicare by the end of the second year. On December 19, CMMI announced the selection of 32 organizations for participation in the Pioneer ACO model. The first performance period for Pioneer ACOs begins on January 1, 2012.

Information about the Pioneer ACO Model is available at 
http://www.innovations.cms.gov/initiatives/aco/pioneer

As your organization considers pursuing an ACO, Ropes & Gray is here to help you with strategic and legal advice from an experienced team of attorneys with relevant backgrounds in all aspects of ACO formation.

ROPES & GRAY ANALYSIS  

• Medicare Accountable Care Organizations: CMS Announces Final Rule (Analysis)
  (November 10, 2011)
   
• CMS Struggles to Find an Accountable Care Organization Model That Works (Analysis)
  (July 11, 2011)
   
• Commenters Disappointed in Long-Awaited Shared Savings Rule (Analysis)
  (July 2011)
   
• CMS Announces ACO Initiatives Including New Model Options for Establishing ACOs (Analysis)
  (May 2011)
   
• ACOs And Antitrust Enforcement: Familiar Rules Raise New Concerns (Analysis)
  (May 2011)
   
• Measuring and Paying for Quality Under the Proposed ACO Rule and Lessons Learned from a Past Demonstration
  (May 4, 2011)
   
• Proposed ACO Rule: A Giant Step Toward Reform or a Leap of Faith for Providers?
  (April 26, 2011)
   
• CMS Proposed ACO Rule and Related Agency Issuances
  (April 8, 2011)
   
• ACOs and Medicaid: Challenges and Opportunities
  (March 23, 2011)
   
• The Times They Are A-Changing: ACOs and Payment Reform
  (March 9, 2011)
   
• ACOs-The Antitrust Perspective
  (January 27, 2011)
   
• Flow of Funds and Credit Risk Issues for ACOs
  (January 13, 2011)
   
• ACO Governance-Decision-Making and Accountability for ACO Functions
  (December 15, 2010)
   
• ACO Strategy and Organizational Structure
  (November 16, 2010)
   
• Presentation: Meeting the Challenges of Building ACOs
   
• Handout: Is your Organization Ready for Accountable Care?
   
• Webinar: The Role of Accountable Care Organizations in the New World of Federal and State Health Care Reform
  (May 5, 2010)
   
• Health Reform Educational Webinar: Innovation and Funding Opportunities (prepared by Ropes & Gray for the National Association of Public Hospitals and Health Systems)
  (June 3, 2010)
   
• Article: Legal Impediments to Implementing Value Based Purchasing in Healthcare (Dan Roble, Partner, Ropes & Gray, American Journal of Law & Medicine, 2009)

IMPLEMENTATION DEVELOPMENTS

• Medicare - Request for Public Comment on Final Waivers in Connection with the Shared Savings Program
  (November 2, 2011)
   
• Final Policy Statement: Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (October 20, 2011)
   
• Interim Final Rule: Medicare Program; Final Waivers in Connection with the Shared Savings Program
  (October 20, 2011)
   
• Final Rule: Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations
  (October 20, 2011)
   

• Proposed Rule: Medicare Program; Availability of Medicare Data for Performance Measurement
  (June 2011)

• Request for Information: Medicare and Medicaid Programs; Opportunities for Alignment Under Medicaid and Medicare
  (May 16, 2011)

• Proposed Rule for Medicare Shared Savings Program: Accountable Care Organizations 
  (April 7, 2011)

• Notice with Comment Period on Waiver Designs in Connection with the Medicare Shared Savings Program and the Innovation Center 
  (April 7, 2011)

• Proposed Antitrust Policy Statement Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program 
  (March 31, 2011)

• Notice 2011-20: Application of Internal Revenue Code to Health Care Organizations Participating in the Medicare Shared Savings Program 
  (March 31, 2011)

• CMS Proposed Accountable Care Organization Quality Measures
  (March 31, 2011)
   
• Request for Information Regarding Accountable Care Organizations and Medicare Shared Saving Program
  (November 15, 2010)
    
• National Committee for Quality Assurance 2011 Draft Accountable Care Organizations Criteria
  (October 20, 2010)
     
• Workshop Regarding Accountable Care Organizations and Implications Regarding Antitrust, Physician Self-Referral, Anti-Kickback and Civil Monetary Penalty Laws
  (October 5, 2010) 
   
       - FTC ACO Workshop Website, including transcripts 
   
       - HHS OIG Workshop Website, including recording and transcripts
   
• MedPac Presentation, Medicare Shared Savings Program for ACOs
  (October 7, 2010)
   
• Medicare “Acountable Care Organizations” Preliminary Questions & Answers
   
• Affordable Care Act Title III – Improving the Quality and Efficiency of Health Care
  (March 23, 2010)

 Other Health Care Delivery System Reforms

• Notice of Public Meeting on Program to Cut Hospital Readmissions
  (November 1, 2010)
   
• Health Information Technology
   
  Ropes & Gray currently advises on compliance with the Health Information Technology for Economic and Clinical Act (the HITECH Act), a major component of the American Recovery and Reinvestment Act of 2009, as well as qualification for grants and Medicare and Medicaid incentive payments under the Act.  For more information about our extensive experience in all areas germane to financing, developing, commercializing, procuring, licensing, deploying, and managing Health IT, click here.
   
• CMS Medicare Demonstration Projects

Stay tuned for details on implementation of other critical programs.