Fact Sheets


For Immediate Release: Thursday, October 20, 2011
Contact: CMS Media Relations




On Oct. 20, 2011, the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services (HHS), finalized new rules under the Affordable Care Act to help doctors, hospitals, and other health care providers better coordinate care for Medicare patients through Accountable Care Organizations (ACOs).  ACOs create incentives for health care providers to work together to treat an individual patient across care settings – including doctor’s offices, hospitals, and long-term care facilities.  The Medicare Shared Savings Program (Shared Savings Program) will reward ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first.  Provider participation in an ACO is purely voluntary.


In developing this final rule, CMS worked closely with agencies across the Federal government to ensure a coordinated and aligned inter- and intra-agency effort to facilitate implementation of the Shared Savings Program.


CMS encourages all interested providers and suppliers to review this final rule and consider participating in the Shared Savings Program.





Section 1899 of the Social Security Act gives the following direction for assigning Medicare fee-for-service beneficiaries to an Accountable Care Organization (ACO) that is participating in the Medicare Shared Savings Program (Shared Savings Program):



·        The ACO must have enough primary care ACO professionals to care for the number of beneficiaries assigned to the ACO.  The ACO must have at least 5,000 beneficiaries in order to be eligible to participate in the Shared Savings Program.



·        The Secretary must determine an appropriate method to assign beneficiaries to an ACO based on their utilization of primary care services furnished by an ACO professional.



In the Shared Savings Program final rule, CMS defines an ACO operationally as a collection of Taxpayer Identification Numbers (TINs) for Medicare enrolled providers and suppliers participating in the ACO that bill Medicare for services rendered to beneficiaries.  Each ACO will be held accountable for beneficiaries that receive primary care services from the physicians that bill under the practice’s TIN. Primary care services are defined as a select set of HCPCS codes identified in section 5501 of the Affordable Care Act, including certain evaluation and management codes and codes associated with the annual wellness visit and Welcome to Medicare visit, and certain revenue center codes for services furnished by Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs). 


Assigning beneficiaries to an ACO based on a plurality of primary care services:


Beneficiaries will be assigned to an ACO, in a two step process, if they receive at least one primary care service from a physician within the ACO:


·        The first step assigns a beneficiary to an ACO if the beneficiary receives the plurality of his or her primary care services from primary care physicians within the ACO. Primary care physicians are defined as those with one of four specialty designations: internal medicine, general practice, family practice, and geriatric medicine.   

·        The second step only considers beneficiaries who have not had a primary care service furnished by any primary care physician.  Under this second step, a beneficiary is assigned to an ACO if the beneficiary receives a plurality of his or her primary care services from physicians and certain non-physician practitioners (nurse practitioners, clinical nurse specialists, and physician assistants) within the ACO. 

A plurality means a greater proportion of primary care services, measured in terms of allowed charges, but can be less than a majority of services.  The plurality approach is consistent with assignment methodologies used in physician pay for performance demonstrations and physician quality reporting programs and ensures that the ACO is held accountable when beneficiaries receive more primary care from that ACO than from any other provider.  For example, in modeling a similar assignment methodology using the Physician Group Practice (PGP)

demonstration, participants were held accountable for beneficiaries who received a plurality of their services from the PGP under a stepwise process that focused on primary care physicians first and then all practitioners regardless of the specialty.  By employing a plurality standard focusing on primary care, a CMS analysis found that between 78 and 88 percent of the patients seen at the PGP during the year were subsequently assigned to that PGP group.  As measured by allowed charges for evaluation and management services, the PGP provided on average over 90 percent of evaluation and management services provided to the assigned beneficiaries.  



Assignment, Reconciliation, and Data Sharing

At the beginning of the performance year, beneficiaries will be preliminarily assigned to ACOs (prospectively) based on the most recent available data.  This list will be updated on a quarterly basis.  However, final assignment, for the purposes of determining an ACO’s quality and financial performance under the program, will be made at the end of the performance year (retrospectively).  


CMS adopted preliminary prospective assignment with final retrospective reconciliation in the final rule in response to many commenters who preferred prospective assignment. At the start of each agreement period, the performance year and quarterly thereafter, CMS, upon the request of the ACO, will provide the ACO with a list of preliminarily assigned beneficiaries.  CMS will also provide the ACO with aggregate beneficiary level data regarding this population. Preliminary prospective assignment will allow ACOs to develop care plans and undertake appropriate quality initiatives on the basis of some knowledge regarding the beneficiaries for whom they will ultimately be held accountable.  However, a final retrospective reconciliation allows CMS to assess an ACO’s performance based on where beneficiaries have chosen to receive services during the performance year.



The Shared Savings Program final rule can be downloaded at: www.ofr.gov/inspection.aspx


It will appear in the Nov. 2, 2011 issue of the Federal Register.  The Shared Savings Program will be established Jan. 1, 2012.


For information about applying to participate in the Shared Savings Program, please see: www.cms.hhs.gov/sharedsavingsprogram/.



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