CMS Releases Final ACO Regulations

Posted by Chris Raphaely on December 21, 2018
CMS

This morning CMS released a final rule regarding its most popular program for accountable care organizations (ACOs), the Medicare Shared Savings Programs. The final rule is based on the proposed rule for the program that was published in August.  The final rule adopts the major structural overhaul contained in the proposed rule, the reduction of the program to two tracks, Basic and Enhanced, the 1 year limitation for most established (ACOs) to remain in an “upside only” risk model and the 2 year limitation for most new ACOs to remain in an “upside only” risk model. The final rule increased the percentage of savings that will be shared with an ACO in an “upside only” model from 25% as proposed to 40%.  The rule also gives approved ACOs the ability to operate patient incentive programs which include cash payments up to $20 from certain ACO professionals and federally qualified health centers for qualifying primary care services,  provides some ACOs with more flexibility with respect to reimbursement for telehealth services, and includes numerous other detailed changes to the program’s operations.

It remains to be seen whether the final rule, with some of its more ACO-friendly revisions, will still cause the exodus from the program by existing ACO participants that some had predicted upon the proposed rule’s release.  ACOs which desire to apply under the new structure with a July 1, 2019 start date, including the roughly 80 ACOs whose 3 year terms would have terminated on December 31, 2018 but for the 6 month extension that was offered by CMS, will have to digest this dense new rule and analyze its effects very quickly.  The deadline to submit a non-binding notice of intent to apply is January 18, 2019 and applications are due on February 22, 2019 for those ACOs.

Chris Raphaely

Chris joined Cozen O’Connor’s Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Prior to joining the firm, Chris served as deputy general counsel to Jefferson Health System and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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