CMS Issued a Proposed Rule on the Medicare Shared Savings Program, Created by the Affordable Care Act

Section 3022 of the Affordable Care Act requires CMS to establish a shared savings program to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service beneficiaries and reduce unnecessary costs. The Shared Savings Program is designed to improve beneficiary outcomes and increase value of care by: • Promoting accountability for the care of Medicare fee-for-service beneficiaries • Requiring coordinated care for all services provided under Medicare Fee-For-Service • Encouraging investment in infrastructure and redesigned care processes Eligible providers, hospitals and suppliers may participate in the Shared Savings Program by creating or joining an Accountable Care Organization, also called an ACO. An ACO is a recognized legal entity under State law and comprised of a group of ACO participants (providers of services and suppliers) that have established a mechanism for shared governance and work together to coordinate care for Medicare fee-for-service beneficiaries. ACOs enter into a 3-year agreement with CMS to be accountable for the quality, cost, and overall care of traditional fee-for-service Medicare beneficiaries who may be assigned to it. Under the proposed rule, Medicare would continue to pay individual providers and suppliers for specific items and services as it currently does under the fee-for-service payment systems. The proposed rule would require CMS to develop ACO specific level of savings which need to be achieved by each ACO if the ACO is to receive shared savings, as well as a level of losses realized by an ACO if it is held liable for losses. Additionally, an ACO would be accountable for meeting or exceeding the quality performance standards to be eligible to receive any shared savings.