Making Good on ACOs’ Promise - The Final Rule for the Medicare Shared Savings Program


This opinion piece, authored by Donald Berwick, the administrator of the Centers for Medicare and Medicaid Services (CMS), describes the ‘final rule’ for the Medicare Shared Savings Program. In other words, the rules for the establishment of Accountable Care Organizations (ACOs). ACOs are ‘voluntary groups of physicians, hospitals, and other health care providers that are willing to assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to them on the basis of patients’ use of primary care services.’ It is the intention that these ACOs will be charged with controlling the costs of care for patients thus assigned to them. Savings would then be shared between CMS and the ACO as an incentive to lower cost growth. These rules have undergone a period of public comment and criticism, and are now being released in updated form. Highlights of some of the changes include:

1. The proposed measures to assess quality of care were reduced from 65 measures in 5 domains to 33 measures in 4 domains.

2. Establishment and use of an Electronic Health Record (EHR) is no longer a precondition of participation. EHR use will now be a quality measure, weighted higher than any other measure for quality-scoring purposes.

3. Marketing materials will no longer require CMS approval, although they will apparently have to comply with CMS market guidelines, and use CMS approved language.

4. Savings shared between CMS and ACOs will now begin on a ‘first dollar’ basis once a minimum savings rate has been achieved.

5. Assignment of patients to an ACO can now be prospective, with beneficiaries identified quarterly, reconciled each year, and made on the basis of patients receiving primary care from an ACO.

Dr. Berwick goes on to explain that the ACO structure is an essential part of the Affordable Care Act signed into law by President Barack Obama. By giving responsibility for long-term care and the expense of that care to these ACOs, and then sharing savings from lower costs with the ACOs, it is the intent that these financial incentives will induce greater cost efficiency. At the same time, quality metrics will be used to assess the quality of care delivered.

The Affordable Care Act will dramatically change the nature of health care delivery in this country, as it was intended to do. However, our current ‘system’ directly incentivizes the provision of services and the use of procedures and tests, while it also lacks almost any assessment of quality of care. Although many within the health care system may find the imposition of rules and quality metrics constraining, the fact that this system leaves it to ACOs to determine how to limit costs and improve efficiency, actually leaves decision-making regarding health care delivery in the hands of the providers themselves.

It is clear to even the most casual observer that our current health care system is inefficient in the extreme, costly and growing beyond sustainability, and by many measures produces inferior quality of care. Although a dramatic change, the Affordable Care Act will actually leave most of the current health care system essentially intact, while providing incentives for efficiency and metrics to allow us to assess and improve quality of care.

Keywords: Hospitals, Medical Records Systems, Computerized, Medicaid, Centers for Medicare and Medicaid Services (U.S.), Patient Protection and Affordable Care Act, Electronic Health Records, Drug Approval, United States Food and Drug Administration, Cardiology, Accountable Care Organizations, Medicare, Outcome and Process Assessment (Health Care), United States

< Back to Listings