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HHS Releases Long-Awaited ACO Rule

Yesterday, the Department of Health & Human Services issued this proposed regulation for Accountable Care Organizations (ACOs), part of the ACA’s Medicare Shared Savings Program.

An ACO generally is a group of health care professionals (ideally, in concert with a health plan) that receive and distribute payments, provide care coordination, invest in infrastructure, redesign care processes, and reward high quality and efficient services. For more on ACOs, read this recent ITUP report.

According to the rules announced yesterday, groups of care providers can qualify as ACOs when they provide primary care for at least 5,000 patients, and in order to achieve savings, they must meet 65 quality standards that focus on patients’ care, coordination, patient safety, preventive health emphasis, and success in treating the most sick patients.

Several providers and plans in California have already merged or formed joint ventures and alliances in anticipation of the ACO rule, including a group out of San Diego.

While this rule — and this first generation of ACOs — will focus on seniors, there is a growing sentiment that the ACO structure, with emphasis on coordination and shared savings, will have a place in the health care system beyond Medicare.

Will that be the case? Will groups in California be identified as ACOs for the purposes of the ACA’s Shared Savings Program? Time will tell…