On October 20, 2011, the Centers for Medicare & Medicaid Services (“CMS”) released its final rule (“Final Rule”) implementing the voluntary Medicare Shared Savings Program (“Program”)1 for accountable care organizations (“ACOs”). The Program was established by Section 3022 of the Patient Protection and Affordable Care Act. The Final Rule was released in conjunction with revised antitrust guidance from the Federal Trade Commission (“FTC”) and the Department of Justice (”DOJ”), as well as with the establishment by CMS and the Department of Health and Human Services’ Office of Inspector General (“OIG”) of several waivers from various fraud and abuse laws. As part of this interagency effort to facilitate participation in the Program, the Internal Revenue Service (“IRS”) also issued a fact sheet regarding nonprofit organizations’ participation in ACOs.
For purposes of background, the Program encourages the formation and operation of ACOs by promising to share Medicare’s savings from the Program with those ACOs that meet: (1) eligibility requirements, and (2) quality performance and Medicare cost savings targets (as set forth in the Final Rule). As compared to the March 2011 proposed rule (the “Proposed Rule”) and other agency statements at the time, the burdens of the Program’s requirements have been reduced, the savings incentives appear to be more attractive, and the clearance obstacles appear to be fewer. At the same time, providers still must evaluate the merits of the Program relative to other opportunities for value-based contracting within CMS and the Center for Medicare and Medicaid Innovation (“CMMI”), as well as with commercial payers.
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