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CMS Proposed Regulations

March 31, 2011 | No Comments
Posted by Beth Christian

This morning, the Centers for Medicare and Medicaid Services (“CMS”) issued a long-awaited proposed rule governing accountable care organizations (“ACO’s”).  The proposed rule outlines the requirements for both establishing an ACO and for participation in the shared savings program authorized by the Accountable Care Act. The regulations set forth requirements for (among other things) eligibility; beneficiary participation and protection; leadership, management and governance; processes; marketing; program integrity and compliance; data sharing; quality and other reporting requirements; shared savings determinations; payment models; and monitoring.  The proposed regulations also include a discussion of waivers of civil monetary penalty, antikickback and physician self-referral laws; IRS guidance regarding tax-exempt organizations; and an antitrust policy statement, which have been addressed in notices published by the applicable federal agencies and discussed in a companion blog post which we are also publishing today. 

ACOs participating in the shared savings program will have an option between participating in two tracks: Under Track 1, shared savings would be reconciled annually for the first 2 years of a 3-year agreement term using a one-sided shared savings approach, with ACOs not being responsible for any portion of the losses above an expenditure target in years one and two.  However, for the third year of the 3-year agreement, an ACO would be required to agree to share any losses that may be generated as well as savings, which would convert them to a two-sided shared savings approach.  ACOs that enter the shared savings program under Track 1 would be automatically transitioned to the two-sided model in the third year of their agreement period. Under Track 2, more experienced ACOs that are ready to share in losses with greater opportunity for reward may elect to immediately enter the two-sided model.  An ACO participating in Track 2 would be under the two-sided model for all three years of its agreement period, so it would share in any savings as well as any losses immediately.  Under this model, the ACO would be eligible for higher sharing rates than would be available under the one-sided model. 

The full text of the regulations can be found here:


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