On October 20, 2011, the Centers for Medicare and Medicaid Services (CMS) released an advance copy of the final rule for accountable care organizations (ACOs). Additional governmental guidance was issued to address antitrust and tax considerations. The following article summarizes the government's key points in the final rule.

ACOs Represent a Model for Seamless and Coordinated Care. In its announcement of the final rule, the government highlighted that ACOs represent a major step forward for transforming Medicare and Medicaid to help assure high quality and seamless health care for continuous improvement. The government defines “seamless and coordinated care” in reference to what patients want. Patients want time with doctors, care that makes sense, is coordinated. Patients wants their doctors working together so they don't get confused or lost in the system. They want better communication, from reminders for appointments to more information about medical decisions. They want a promise that their own doctor will know if they have an issue and seek care elsewhere.

To obtain this type of seamless and coordinated care, the government recognizes that fundamental change to the way services are reimbursed must occur. Payment for services on a fee-for-service basis led to patients receiving pieces of care versus coordinated care. The government is encouraging coordinated care through various payment reforms, including bundled payments, payments based on episodes of care, among others. With ACOs, the government believes that care and reimbursement can be reorganized so that care (and associated charges) makes sense all of the time.

Options for Participating in Health Care Reform. The government remains focused on attaining the triple aim: better health, better care, and lower cost to all Americans. The government sees ACOs and many other initiatives as designed to attain the triple aim, but recognizes that there are barriers to providers participating in these initiatives. The high cost of infrastructure (and the lack of necessary capital to invest in building this) needed to operate as an ACO led to the announcement of the Advance Payment Model (APM). Under the APM, providers receive payments to offset setup costs that will be recouped later as the providers receive savings. The government sees the APM as another “on ramp” for providers who want to participate in health care reform.

ACOs, and their associated programs and rules, are part of a larger menu of options to reform health care. The government recognizes that ACOs alone will not accomplish the triple aim or health care reform. Additional programs and opportunities are needed and numerous initiatives have been announced to date, including:

We should expect this list to grow and change as service and payment models evolve.

Key Principles in the Final Rule. In developing the final rule, CMS focused on:

Government leaders have vocalized their excitement about the final rule and the opportunities it provides.

The Key Changes. CMS identified the following significant changes to the final rule from what was proposed:

Unlike the relative vagaries of the proposed rule, the final rule sets specific requirements for documents (from organizational documents to contracts between participants and providers), a compliance program, and data use and access. Providers will have some significant contracting work ahead of them to get an ACO off the ground.

What Does the Final Rule Mean for Providers? The final rule while making some changes to increase participation in the SSP clarifies that ACOs are just one part of the government's plan to effectuate health care reform through service and payment model changes. Whether or not ACOs are successful, this final rule is a harbinger of things to come and marks a fundamental change in the way the government views (and pays for) health care. Providers must actively educate themselves on the many reform opportunities with this in mind. Providers should apply for programs that fit with their practice and capabilities because change is coming. Change is inevitable.

This article was originally written by Kim Licata, who is no longer associated with Poyner Spruill LLP.

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