Accountable Care Organizations - The Feds Offer Proposals/Seek Public Comments on Medicare Shared Savings Program

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Healthcare providers and policymakers have long been intrigued by the notion of shifting from the current volume of services reimbursement system to one based on patient outcomes, measurable quality controls and aligned financial incentives for collaborating providers. Many providers have taken initial steps to move in that direction. Efforts to date have been hampered by scarce guidance on knotty questions like:

- How to incentivize providers to transition from “silo” rewards and responsibilities to enhanced cooperation and coordination;

- How to afford the organizational, infrastructure and operational initiatives required to implement a shared approach to managing costs, measuring quality, and rewarding success;

- How to navigate safely through self-referral prohibitions, antikickback restrictions, civil money penalty risks, antitrust constraints, tax exemption challenges and unrelated business income tax risks.

The New York Times quips that until now ACOs “were like unicorns, creatures that flourished in the imagination but proved persistently elusive in the natural world.”

A single section of the March 2010 Affordable Care Act (ACA) caused renewed hope for more clarity in this area. On March 31, 2011, a coordinated federal agency response to this legislation has shed new light, and sought public comment, on how these issues might be resolved in connection with the Medicare program, set to “go live” on January 1, 2012. Although proposals are limited at this point to Medicare, the agencies recognize that whatever final rules result will have a profound effect on other public and private reimbursement arrangements seeking to implement shared savings programs among collaborating providers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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