Accountable Care Organizations Overview Part II

February 25, 2011, 12:12 PM

As mentioned in the previous post, this overview of Accountable Care Organizations (ACOs) is intended to lay the foundation for a more comprehensive discussion in future posts over the next several weeks. The previous post set forth the organizations that may become an ACO and the types of requirements an ACO must meet. This post will address how an ACO will qualify for shared savings and discuss the standards for quality performance.

How does an ACO qualify for shared savings?

Participating ACOs that meet specified quality performance standards for each 12-month period will be eligible to receive a share/percentage (to be determined by the Secretary of Health & Human Services (HHS)) of any savings if the actual per capita expenditures of their assigned Medicare beneficiaries are a sufficient percentage below their specified benchmark amount.

The benchmark for each ACO will be based on the most recent available three (3) years of per-beneficiary expenditures for Parts A and B services for Medicare fee-for-service beneficiaries assigned to the ACO (for a discussion of assigned, see previous post). This benchmark will be adjusted for beneficiary characteristics and other factors deemed appropriate by the Secretary of HHS, and updated by the projected absolute amount of growth in national per capita expenditures for Part A and B.

What are the standards for quality performance?

The specifics for the standards of quality performance will be determined by the Secretary of HHS and, thus, have yet to be issued. However, the standards will include measures in categories such as clinical processes and outcomes of care, patient experience, and utilization of services. We will provide the specifics upon their issuance by the Secretary of the HHS.

In sum, ACOs will be instrumental to the reform of the health care delivery system under the PPACA and deserve a more comprehensive discussion of the structure and processes. Our future posts will provide a full discussion of ACOs and keep you abreast of the final rules once issued by the Secretary of the HHS. --Christopher L. McLean