May 25, 2011

CMS Releases Exceptions to ACO Rules for Rural Areas

The Centers for Medicare & Medicaid Services (CMS) has released a fact sheet titled “Medicare Shared Savings Program and Rural Providers” highlighting exceptions to the proposed regulations governing accountable care organizations (ACOs). On March 31, 2011, CMS released its proposed rules for ACOs. According to CMS, ACOs are supposed to help doctors, hospitals and health care providers provide better coordinated care for Medicare patients.

In its fact sheet, CMS states that based on its recognition of “the unique needs and challenges of rural communities and the importance of rural providers in assuring access to health care,” it has provided details about the exceptions to the proposed ACO regulations applicable to small ACOs in rural communities. These exceptions are specifically applicable to critical access hospitals (CAHs), federally qualified health centers (FQHCs) and rural health clinics (RHCs).

Here are some of the highlights from CMS’s fact sheet:

  • ACOs with less than 10,000 assigned beneficiaries would be eligible for exemption from the required 2% savings threshold.
  • In recognition of the greater uncertainty regarding expenditures in smaller ACOs, they would be able to use a lower confidence interval to set the minimum savings rate.
  • Critical access hospitals (CAHs) that elect to bill for outpatient services under the optional method (Method II) may form their own ACOs, provided that the CAH meets eligibility requirements.
  • The proposed regulations provide an incentive, in the form of an increase in the sharing rate, for the inclusion of FQHCs and RHCs in ACOs.

This post was contributed by Kurt E. Bratten.