NEJM: Berwick weighs in on ACO NPRM
The Department of Health and Human Services (HHS) took a major step toward establishing accountable care organizations (ACOs) by issuing a notice of proposed rule-making that will define how physicians, hospitals and others can adopt this new organizations form, wrote Donald M. Berwick, MD, MPP, administrator of the Centers for Medicare and Medicaid Services (CMS), in a perspective paper published March 31 in the New England Journal of Medicine.
“The issuing of the proposed rule follows months of obtaining informal and formal input from throughout the healthcare delivery system, but at this point the rule is only a proposal,” Berwick stated. “[CMS] will carefully review the comments we receive in response to the proposed rule before issuing a final rule later this year.”
The establishment of the Medicare Shared Savings Program for ACOs under the Patient Protection & Affordable Care Act (PPACA) offers one of the first delivery-reform initiatives under the act, wrote Berwick, adding that the proposed rule’s unwavering focus on patients is crucial. “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.”
Institutions and healthcare providers interested in forming an ACO will have structural flexibility, according to Berwick. However, the proposed rule stipulates that an ACO will be governed by a body that primarily comprises the healthcare providers in that ACO but also incorporates the voices of the community and the Medicare patients it serves.
“We expect that the transition to ACOs will unlock many opportunities and challenges; broad representation in ACO governance will ensure that these opportunities and challenges are met by an engaged set of critical stakeholders,” Berwick continued.
The financial opportunity for an ACO to achieve shared savings will vary according to its initial tolerance for risk, Berwick wrote, mentioning that two different models are proposed. First, ACOs earlier in their evolution can elect to assume a smaller share of upside gains but no risk of loss for 2 years and then transition in year 3 to accepting risk. “In the second model, organizations that are willing to take on both upside gains and downside risk can qualify for a higher proportion of shared savings from the start.”
The newly chartered Center for Medicare and Medicaid Innovation will concurrently launch testing of innovative models for a nationwide technical support platform for ACOs, to complement the numerous ongoing efforts in which the private sector is already engaged.
“Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close,” Berwick concluded. “CMS believes that with enhanced cooperation among beneficiaries, hospitals, physicians and other healthcare providers, ACOs will be an important new tool for giving Medicare beneficiaries the affordable, high-quality care they want, need and deserve.”
“The issuing of the proposed rule follows months of obtaining informal and formal input from throughout the healthcare delivery system, but at this point the rule is only a proposal,” Berwick stated. “[CMS] will carefully review the comments we receive in response to the proposed rule before issuing a final rule later this year.”
The establishment of the Medicare Shared Savings Program for ACOs under the Patient Protection & Affordable Care Act (PPACA) offers one of the first delivery-reform initiatives under the act, wrote Berwick, adding that the proposed rule’s unwavering focus on patients is crucial. “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.”
Institutions and healthcare providers interested in forming an ACO will have structural flexibility, according to Berwick. However, the proposed rule stipulates that an ACO will be governed by a body that primarily comprises the healthcare providers in that ACO but also incorporates the voices of the community and the Medicare patients it serves.
“We expect that the transition to ACOs will unlock many opportunities and challenges; broad representation in ACO governance will ensure that these opportunities and challenges are met by an engaged set of critical stakeholders,” Berwick continued.
The financial opportunity for an ACO to achieve shared savings will vary according to its initial tolerance for risk, Berwick wrote, mentioning that two different models are proposed. First, ACOs earlier in their evolution can elect to assume a smaller share of upside gains but no risk of loss for 2 years and then transition in year 3 to accepting risk. “In the second model, organizations that are willing to take on both upside gains and downside risk can qualify for a higher proportion of shared savings from the start.”
The newly chartered Center for Medicare and Medicaid Innovation will concurrently launch testing of innovative models for a nationwide technical support platform for ACOs, to complement the numerous ongoing efforts in which the private sector is already engaged.
“Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close,” Berwick concluded. “CMS believes that with enhanced cooperation among beneficiaries, hospitals, physicians and other healthcare providers, ACOs will be an important new tool for giving Medicare beneficiaries the affordable, high-quality care they want, need and deserve.”