Accountable Care Organizations wishing to participate in the Medicare Shared Savings Program would have to engage in a detailed analysis of their shares in defined markets and, when those shares exceed 50 percent, would be required to obtain approval from the federal antitrust enforcement agencies before the Centers for Medicare & Medicaid Services would qualify them for participation in the Shared Savings Program, under a proposal announced by the antitrust enforcement agencies on March 31, 2011.

The proposal, contained in a Policy Statement issued by the Department of Justice and the Federal Trade Commission the same day that CMS issued its proposed regulations on ACOs, departs in several significant ways from traditional antitrust analysis of provider joint ventures. While the antitrust agencies signal a willingness to relax the standards by which providers forming an ACO could establish “clinical integration,” the agencies impose significant burdens on all ACOs seeking CMS qualification to establish that they do not create market power.

The Policy Statement would create a “safety zone” for ACOs with shares under 30 percent. These ACOs would apply directly to CMS to qualify under the Shared Savings Program without seeking approval from the antitrust agencies first.

ACOs with shares falling between 30 percent and 50 percent would not have to seek a review from the antitrust agencies before applying to CMS, though they could do so if they wanted to forestall the possibility of subsequent enforcement action by those agencies. ACOs in this middle zone that chose to skip a review by the antitrust agencies would be provided with advice on how to operate so as to minimize the possibility of a later antitrust enforcement action.

Although the Policy Statement is expressly intended to provide criteria for participation in the Shared Savings Program, the agencies recognize many ACOs will provide services for commercially insured patients as well. If adopted, the Policy Statement will provide a framework under which the agencies will analyze CMS-qualified ACOs when they provide services in the commercial market.