The Centers for Medicare and Medicaid Services (CMS) announced on December 3 that it will release proposed regulations in January 2011 under provisions of the Affordable Care Act (ACA) on Medicare payments to accountable care organizations (ACOs). CMS’s December 3 announcement comes on the heels of the White House’s December 1 release of the report on the national debt which strongly urges CMS to accelerate use of ACOs and many other Medicare and Medicaid innovations that are authorized under the ACA, such as the Medicare provisions on ACOs, Medicare provisions on patient-centered medical homes (PCMHs), Medicaid health home state plan options, and Medicare/Medicaid waiver and demonstration projects. The Medicare Payment Advisory Commission (MedPAC) released recommendations to CMS on November 22 that CMS consider a “two-sided” risk-based capitation model for ACOs under which each ACO would “share savings” resulting from effective care coordination and management while bearing an appropriate degree of financial risk for certain excess costs. CMS has said that it wants to enable a broad range of organizations to participate as ACOs, including small organizations that may be unwilling or unable to bear significant financial risk (unlike managed care organizations that usually can spread statistically random variations in service utilization over a larger enrollment base), but CMS is eliciting recommendations from a wide range of physician groups and other organizations on that issue as well as many others (such as ACO enrollment procedures, quality standards, and performance/ outcome measures) that will drive the pace, scale, and impact of ACOs under the federal health care reform law.
       
The December 1 report on the national debt, drafted by the White House’s National Commission on Fiscal Responsibility and Reform, also urges that CMS be required to fast-track state Medicaid waivers that offer demonstrable promise in improving care and achieving savings, specifically citing Rhode Island’s “Global Consumer Choice Demonstration”, which includes a capped federal allotment for Medicaid over five years; Vermont’s all-payer advanced primary care “Blueprint for Health”; and “Community Care of North Carolina”, a medical home initiative that has increased access to primary care while decreasing emergency room use and controlling state costs.   Noting that health care represents the single largest fiscal challenge that the United States faces over the long-run, the Commission also recommends reductions in areas such as Medicare payments to hospitals for direct and indirect graduate medical education (GME) expenditures, Medicare reimbursement of bad debts, Medicaid federal financial participation on provider-related taxes, and Medicaid FFP on administrative costs. The Commission also proposes enrollment of Medicare/Medicaid dually eligible individuals in Medicaid managed care plans, and changes to, or repeal of, the Community Living Assistance Services and Supports (CLASS) Act, which it deems fiscally unsound in its current form over the long-run.        

About Tom Entrikin

A former policy specialist with the U.S. Health Care Financing Administration (now Centers for Medicare & Medicaid Services (CMS)), Tom Entrikin has vast experience providing technical assistance to states on Medicaid eligibility, coverage, and reimbursement; provider certification and enrollment; program integrity; recovery of third party liabilities; Medicaid Management Information System (MMIS) performance specifications and operations; interagency agreements; contracts with managed care organizations; and Medicaid waiver programs.

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