During a Thursday morning press call, Health and Human Services Secretary Kathleen Sebelius and Centers for Medicare and Medicaid Services Administrator Donald Berwick unveiled the long-awaited federal rule on accountable care organizations. A fact sheet from the CMS Office of Media Affairs detailing ACO specifics explains that “ACOs create incentives for health care providers to work together to treat an individual patient across care settings – including doctor’s offices, hospitals, and long-term care facilities. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary.”

Kaiser Health News: “The Obama administration today released proposed rules to help hospitals and doctors form a new type of health care delivery system called accountable care organizations, and officials said they estimated the ACOs could save Medicare up to $960 million over three years. ACOs, being established in the Medicare program under the new health law, have been billed by top federal health officials as a way to help providers work more closely together and lower costs. But critics worry ACOs could give too much power to hospitals and doctors and increase costs. Jon Leibowitz, chairman of the Federal Trade Commission, said in a conference call with reporters that under the new rules the FTC would evaluate potential ACOs within 90 days to determine if they would violate anti-trust laws” (Galewitz, 3/31).

Bloomberg: “Hospitals, insurers and groups of doctors will be able to form networks with the aim of cutting health-care costs by pooling services under regulations the Obama administration released. The U.S. Department of Health and Human Services issued rules today for so-called accountable care organizations, a centerpiece of the health-care law that raised antitrust concerns. The program may save the government as much as $960 million in the next three years after any performance incentives are paid to providers” (Wayne, 3/31).

The Hill’s Healthwatch: “The proposed rule will enable medical providers to share in Medicare savings if they collaborate to limit duplicative tests, needless procedures and other inefficiencies caused by Medicare’s fragmented payment system for medical care. … Provider groups who cover at least 5,000 beneficiaries will be eligible to start an ACO. The regulation is only a proposed rule, and officials said they’d be holding listening sessions over the next few months to make any changes that are needed” (Pecquet, 3/31).

Modern Healthcare: “Officials… emphasized that Medicare patient participation in these new entities will be voluntary. … Among the key factors that will determine the success of ACOs is the amount of new protection that participating providers are given from federal antitrust laws. Administration officials expect regulations will address that concern for providers in Medicare ACOs. However, it remains unclear whether such protections will extend to non-Medicare patients included in ACOs” (3/31).

The Associated Press: “Proposed rules released Thursday explain how the networks will operate in Medicare. Unlike some managed care plans, patients will not be locked into the networks. Health and Human Services Secretary Kathleen Sebelius estimates a potential savings to Medicare of as much as $960 million over three years” (Alonso-Zaldivar, 3/31).

The New England Journal of Medicine published a column from CMS chief Berwick: “The creation of ACOs is one of the first delivery-reform initiatives that will be implemented under the ACA. Its purpose is to foster change in patient care so as to accelerate progress toward a three-part aim: better care for individuals, better health for populations, and slower growth in costs through improvements in care. Under the law, an ACO will assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to it on the basis of their patterns of use of primary care. If an ACO succeeds in both delivering high-quality care and reducing the cost of that care to a level below what would otherwise have been expected, it will share in the Medicare savings it achieves” (3/31).

View the Proposed Rule: http://www.ofr.gov/OFRUpload/OFRData/2011-07880_PI.pdf