The final ACO regulations outline the process and required content for ACO applicants to participate in the Shared Savings Program. For the initial applications in 2012, the required term of the agreement will be either (i) April 1, 2012 through December 31, 2015, or (ii) July 1, 2012 through December 31, 2015. Thereafter all agreements will commence on January 1 and have a three year term. An ACO must submit an application on a form required by CMS that includes extensive information, disclosures and certificates. Some (but not all) of the more significant requirements are that the ACO applicant must:
- certify that the ACO, its participants, providers and suppliers have agreed to become accountable for the quality, cost, and overall care of the Medicare beneficiaries assigned to the ACO;
- provide documents sufficient to describe the ACO’s participants and providers rights and obligations to receive shared savings and to adhere to the quality assurance and evidence based clinical guidelines, which, for example, include participation agreements, employment contracts, and operating policies;
- include a description of how the ACO will implement the required patient-centeredness criteria, including the potential remedies and penalties, including expulsion;
- provide materials documenting its organizational structure, including an organization chart, a list of committees with the names of the members, and key job descriptions;
- either include a description or copy of a compliance plan;
- list all ACO participating providers, along with their Medicare enrolled TINs;
- describe (i) how the ACO plans to use shared savings payment, including the criteria for distributing the savings; (ii) how its plan will achieve the specific goals of the Shared Savings Program; and (iii) how the plan will achieve the general aims of better care for individuals, better health for populations, and lower growth in expenditures; and
- include documentation that it is capable of repaying losses or other monies determined to be owed upon the first year reconciliation.
The detailed requirements for the application will make it imperative that ACO applicants comprehensively organize and document the ACO structure before applying. Compliance with the extensive application requirements will require significant financial and other resources.
CMS will evaluate applications and provide a notice of determination to the applicant. If the application is denied, the reasons will be provided. If the application is approved, the ACO must sign the participation agreement, agreeing to comply with all provisions of the regulations. Interestingly, ACOs that sign a three year agreement are still subject, with a few exceptions, to all statutory and regulatory changes that are effective during the term of the agreement. The exceptions are limited to (i) eligibility requirements concerning the structure and governance of ACOs, (ii) calculation of the shared savings, and (iii) beneficiary assignment. An ACO that fails to modify its processes as required by a change in the law or regulations will be placed on a corrective action plan, and if the ACO fails to comply with the corrective action plan it will be terminated. It is likely that there will be material revisions to the ACO regulations to address issues identified as the first ACOs qualify and commence operation. Therefore it will be important for ACOs to be structured in a manner that provides for effective governance and management as the rules change over time.
For more information regarding the ACO application or ACO’s in general, please contact Doug Albright.