Medicare Accountable Care Organizations

What are the requirements for Medicare Accountable Care Organizations?

For an organization to qualify as an accountable care organization (ACO) in the Medicare program, its primary care providers must care for at least 5,000 Medicare beneficiaries. The Centers for Medicare and Medicaid Services (CMS) has laid out several rules of conduct for ACOs participating in the MSSP. Some of the rules that affect participating providers most include:

  • Goals: ACOs agree to be held accountable for improving the health and experience of care for individuals, improving the health of populations, and reducing the rate of growth in health care spending – the triple aim.
  • Contract: ACOs contract for three-year terms in the MSSP.
  • Payment to providers: Providers in participating ACOs receive traditional Medicare FFS payments.
  • Shared savings: An ACO that meets the program's standards for quality and patient centeredness will be eligible to receive a share of any savings it achieves; that is, a share of the amount by which its expenditures are below a benchmark expenditure level. Each ACO will determine how those shared savings are distributed to the providers.
  • Program tracks: Each ACO may choose one of two program tracks for the duration of its initial three-year agreement. The first allows the ACO to share in savings with no downside risk; the second offers the possibility of a larger share of savings in return for accepting some risk for losses.
  • Performance metrics: CMS assesses each ACO's performance annually, comparing the population of beneficiaries cared for by primary care physicians in the ACO with a benchmark population against a set of quality metrics. The program currently uses 33 metrics focused on disease states such as diabetes and ischemic vascular disease, patient satisfaction, and use of electronic health records. Initially, participating ACOs must simply report that they can collect quality data, but they eventually will be held accountable for outcomes.
  • Notice to beneficiaries: Participating providers must notify beneficiaries that the providers are participating in an ACO and are therefore eligible for additional payments for improving the quality and coordination of care while reducing overall costs, or may be financially responsible to Medicare for failing to provide efficient, cost-effective care. Beneficiaries are able to choose their providers  from inside or outside the ACO.
  • Data collection: Beneficiaries who see ACO providers can opt out of sharing their data with the ACO.
  • Reporting: ACOs are subject to strict reporting requirements. For example, MSSP ACOs are required to publicly report certain aspects of their performance and operations via the Group Practice Reporting Option (GPRO) web portal. Further, CMS has stated that at least some of these reported measures will be made public as a patient resource, so there is a high expectation for data transparency.

You can read a more extensive summary of the rules on the CMS website. The final rule itself is available in the Federal Register. Although the MSSP is well delineated by the final rule, it pays to keep abreast of developments, for instance by regulary searching online news sources.