CMS Releases Proposed Rule for Creation of Medicare Accountable Care Organizations

A framework for the establishment of accountable care organizations (ACOs) is finally coming into view one year after passage of the healthcare reform law that called for the creation of coordinated provider networks. The U.S. Department of Health and Human Services today released the first draft of its proposed regulations governing the shared savings program for Medicare ACOs, which is scheduled to debut in January 2012.

The 429-page draft explains how ACOs will create incentives for doctors, hospitals, long-term care facilities and other providers to better coordinate their care of individual patients, cutting costs and improving efficiency in the process.

"An ACO will be rewarded for providing better care and investing in the health and lives of patients," said Centers for Medicare and Medicaid Services Administrator Donald Berwick, MD, in a press release. "ACOs are not just a new way to pay for care but a new model for the organization and delivery of care."

Specifically, groups of Medicare providers that join forces to establish ACOs and coordinate their care of original Medicare beneficiaries (not those with Medicare Advantage plans) will be eligible for shared savings when they show they are meeting quality standards in 5 areas: