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Accountable Care Organizations
Section 3022 of the Affordable Care Act


Read the statutory language applicable to this section

Brief analysis

Federal regulations

Federal agency guidance

Bulletins applicable to this section


Not later than January 1, 2012, the Secretary of HHS is required to establish a shared savings program that promotes accountability for a patient population and coordinates items and services under Medicare parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.

Under the shared savings program groups of providers of services and suppliers meeting certain criteria specified by the Secretary of HHS may work together to manage and coordinate care for Medicare fee-for- service beneficiaries through an Accountable Care Organization. Those ACOs that meet quality performance standards established by the Secretary of HHS will be eligible to receive payments or shared savings.

Eligible Accountable Care Organizations

The following groups of providers of services and suppliers that have established a mechanism for shared governance are eligible to participate as ACOs

  • ACO professionals (physicians and certain defined practitioners) in group practice arrangements

  • Networks of individual practices of ACO professionals
  • Partnerships or joint venture arrangements between hospitals and ACO professionals
  • Hospitals employing ACO professionals
  • Such other groups of providers of services and suppliers as the Secretary of HHS determines appropriate.

Requirements of Accountable Care Organizations

An ACO must meet the following requirements:

  • The ACO must be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it.
  • The ACO must enter into an agreement with the Secretary of HHS to participate in the program for not less than a 3-year period (the โ€˜"agreement period").
  • The ACO must have a formal legal structure that would allow the organization to receive and distribute payments for shared savings to participating providers of services and suppliers.
  • The ACO must include primary care ACO professionals that are sufficient for the number of Medicare fee-for- service beneficiaries assigned to the ACO. At a minimum, the ACO is required to have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the ACO program.
  • The ACO must provide the Secretary of HHS with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements, and the determination of payments for shared savings.
  • The ACO must have in place a leadership and management structure that includes clinical and administrative systems.
  • The ACO must define processes to promote evidence- based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.
  • The ACO must demonstrate to the Secretary of HHS that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans.

Reporting Requirements

The Secretary of HHS is required to determine appropriate measures to assess the quality of care furnished by the ACO, such as measures of clinical processes and outcomes; patient and, where practicable, caregiver experience of care; and utilization (such as rates of hospital admissions for ambulatory care sensitive conditions).

An ACO will be required to submit data in a form and manner specified by the Secretary of HHS on measures the Secretary determines necessary for the ACO to report in order to evaluate the quality of care furnished by the ACO. Such data may include care transitions across health care settings, including hospital discharge planning and post-hospital discharge follow-up by ACO professionals, as the Secretary determines appropriate.

Payments and Treatment of Savings

Under the program ACO participating providers and suppliers payments will continue paid by Medicare in the same manner as they would otherwise be paid except that a participating ACO is eligible to receive payment for shared savings if the ACO meets the quality performance standards established by the Secretary of HHS and the ACO meets the saving requirement described below.

The "savings requirement" requires that for each year of the agreement period, the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries for parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary of HHS below an established applicable benchmark.


Federal Regulations

Final Rule: Accountable Care Organizations
Published in the November 2, 2011 Federal Register, final rule implementing section 3022 which contains provisions relating to Medicare payments to providers of services and suppliers participating in Accountable Care Organizations under the Medicare Shared Savings Program.
Effective Date: January 3, 2012
    Chart Comparing the Proposed Rule with the Changes in the Final Rule


Interim Final Rule: Final Waivers in Connection With the Shared Savings Program
Published in the November 2, 2011 Federal Register, interim final rule with comment period that establishes waivers of the application of the Stark law, the anti-kickback statute, and certain civil monetary penalties law provisions to specified arrangements involving accountable care organizations.
Effective Date: November 2, 2011
Comment Period: Comments must be submitted by January 3, 2012


Federal Agency Guidance

Announcement of a New Application Deadline for the Advance Payment Model
From the November 30, 2011 Federal Register CMS notice announcing a new application deadline for participation in the Advance Payment Model for certain accountable care organizations participating in the Medicare Shared Savings Program scheduled to begin in 2012. (Starts at the bottom of the page)

Guidance Will Help Health Care Providers Form Procompetitive ACOs and Protect Health Care Consumers from Higher Prices and Lower Quality Care
October 20, 2011 news release and link to statement of antitrust enforcement policy regarding Accountable Care Organizations from the Department of Justice and FTC.

Making Good on ACOs' Promise โ€” The Final Rule for the Medicare Shared Savings Program
October 20, 2011 article in the New England Journal of Medicine by Donald M. Berwick, M.D. on finalization of the federal regulations for ACOs.

Notice: Advanced Payment Model
CMS notice announcing the testing of the Advance Payment Model for certain accountable care organizations participating in the Medicare Shared Savings Program scheduled to begin in 2012, and providing information about the model and application process. Published in the November 2, 2011 Federal Register.

CMS Notice to Establish a New System of Records
September 19, 2011 CMS notice in the Federal Register establishing a new system of records to support the Medicare Shared Savings Program and Pioneer ACO Model.

Transcript of the Accountable Care Workshop -- Morning Session
Transcript of the morning session of the October 5, 2010 HHS- sponsored Accountable Care Organizations, and Implications Regarding Antitrust, Physician Self-Referral, Anti-Kickback, and Civil Monetary Penalty Laws workshop.

Transcript of the Accountable Care Workshop -- Afternoon Session
Transcript of the afternoon session of the October 5, 2010 HHS- sponsored Accountable Care Organizations, and Implications Regarding Antitrust, Physician Self-Referral, Anti-Kickback, and Civil Monetary Penalty Laws workshop.

Medicare Accountable Care Organizations
Preliminary questions & answers on Accountable Care Organizations as prepared by the Centers for Medicare & Medicaid.


Bricker & Eckler Bulletins

ACOs Take Two: Major Changes in Final Regulations
CMS recently published the Interim Final Rule on Accountable Care Organizations and the Shared Savings Program with substantial changes intended to reduce previously identified challenges to participation.

Multiple Government Agencies and Departments Make Coordinated Release of Final Medicare ACO Rules
October 2011
Federal agencies issue interim final rules with comment periods and final policy statements regarding the implementation of Medicare Accountable Care Organizations.

On Your Mark, Get Set, ACO โ€“ A Quick Run Through of the Proposed ACO And Medicare Shared Savings Program Rule
April 13, 2011
Bulletin on the Centers for Medicare & Medicaid Services proposed rule to implement the Medicare Shared Savings Program for Accountable Care Organizations.

Shared Savings Programs/Accountable Care Organizations
July 2010
Bulletin on section 3022 of the Patient Protection and Affordable Care Act dealing with accountable care organizations.

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