PPACA Sec. 3022

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

 
*** See Sec. 10307 Modification at bottom of this Page
 
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following new section:

‘‘SHARED SAVINGS PROGRAM

‘‘SEC. 1899. (a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—Not later than January 1, 2012, the Secretary shall establish a shared savings program (in this

section referred to as the ‘program’) that promotes accountability for a patient population and coordinates items and services

under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and

efficient service delivery. Under such program—

‘‘(A) groups of providers of services and suppliers meeting criteria specified by the Secretary may work

together to manage and coordinate care for Medicare feefor- service beneficiaries through an accountable care

organization (referred to in this section as an ‘ACO’); and

‘‘(B) ACOs that meet quality performance standards established by the Secretary are eligible to receive payments

for shared savings under subsection (d)(2).

‘‘(b) ELIGIBLE ACOS.—

‘‘(1) IN GENERAL.—Subject to the succeeding provisions of this subsection, as determined appropriate by the Secretary,

the following groups of providers of services and suppliers which have established a mechanism for shared governance are

eligible to participate as ACOs under the program under this section:

‘‘(A) ACO professionals in group practice arrangements.

‘‘(B) Networks of individual practices of ACO professionals.

‘‘(C) Partnerships or joint venture arrangements between hospitals and ACO professionals.

‘‘(D) Hospitals employing ACO professionals.

‘‘(E) Such other groups of providers of services and suppliers as the Secretary determines appropriate.

‘‘(2) REQUIREMENTS.—An ACO shall meet the following requirements:

‘‘(A) The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare

fee-for-service beneficiaries assigned to it.

‘‘(B) The ACO shall enter into an agreement with the Secretary to participate in the program for not less than

a 3-year period (referred to in this section as the ‘agreement period’).

‘‘(C) The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments

for shared savings under subsection (d)(2) to participating providers of services and suppliers.

‘‘(D) The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare feefor-

service beneficiaries assigned to the ACO under subsection (c). At a minimum, the ACO shall have at least

5,000 such beneficiaries assigned to it under subsection (c) in order to be eligible to participate in the ACO program.

‘‘(E) The ACO shall provide the Secretary with such information regarding ACO professionals participating in

the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to

an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination

of payments for shared savings under subsection (d)(2).

‘‘(F) The ACO shall have in place a leadership and management structure that includes clinical and administrative

systems.

‘‘(G) The ACO shall define processes to promote evidence- based medicine and patient engagement, report on

quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring,

and other such enabling technologies.

‘‘(H) The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary,

such as the use of patient and caregiver assessments or the use of individualized care plans.

‘‘(3) QUALITY AND OTHER REPORTING REQUIREMENTS.—

‘‘(A) IN GENERAL.—The Secretary shall determine appropriate measures to assess the quality of care furnished

by the ACO, such as measures of—

‘‘(i) clinical processes and outcomes;

‘‘(ii) patient and, where practicable, caregiver experience of care; and

‘‘(iii) utilization (such as rates of hospital admissions for ambulatory care sensitive conditions).

‘‘(B) REPORTING REQUIREMENTS.—An ACO shall submit data in a form and manner specified by the Secretary

on measures the Secretary determines necessary for the ACO to report in order to evaluate the quality of care

furnished by the ACO. Such data may include care transitions across health care settings, including hospital discharge

planning and post-hospital discharge follow-up by ACO professionals, as the Secretary determines appropriate.

‘‘(C) QUALITY PERFORMANCE STANDARDS.—The Secretary shall establish quality performance standards to

assess the quality of care furnished by ACOs. The Secretary shall seek to improve the quality of care furnished by

ACOs over time by specifying higher standards, new measures, or both for purposes of assessing such quality of

care.

‘‘(D) OTHER REPORTING REQUIREMENTS.—The Secretary may, as the Secretary determines appropriate, incorporate

reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI) under section

1848, including such requirements and such payments related to electronic prescribing, electronic health records,

and other similar initiatives under section 1848, and may use alternative criteria than would otherwise apply under

such section for determining whether to make such payments. The incentive payments described in the preceding

sentence shall not be taken into consideration when calculating any payments otherwise made under subsection (d).

‘‘(4) NO DUPLICATION IN PARTICIPATION IN SHARED SAVINGS PROGRAMS.—A provider of services or supplier that participates in any of the following shall not be eligible to participate in an ACO under this section:

‘‘(A) A model tested or expanded under section 1115A that involves shared savings under this title, or any other

program or demonstration project that involves such shared savings.

‘‘(B) The independence at home medical practice pilot program under section 1866E.

‘‘(c) ASSIGNMENT OF MEDICARE FEE-FOR-SERVICE BENEFICIARIES TO ACOS.—The Secretary shall determine an appropriate method to assign Medicare fee-for-service beneficiaries to an ACO based on their utilization of primary care services provided under this title by an ACO professional described in subsection (h)(1)(A).

‘‘(d) PAYMENTS AND TREATMENT OF SAVINGS.—

‘‘(1) PAYMENTS.—

‘‘(A) IN GENERAL.—Under the program, subject to paragraph (3), payments shall continue to be made to providers

of services and suppliers participating in an ACO under the original Medicare fee-for-service program under parts

A and B in the same manner as they would otherwise be made except that a participating ACO is eligible to

receive payment for shared savings under paragraph (2) if—

‘‘(i) the ACO meets quality performance standards established by the Secretary under subsection (b)(3); and

‘‘(ii) the ACO meets the requirement under subparagraph (B)(i).

‘‘(B) SAVINGS REQUIREMENT AND BENCHMARK.—

‘‘(i) DETERMINING SAVINGS.—In each year of the agreement period, an ACO shall be eligible to receive

payment for shared savings under paragraph (2) only if the estimated average per capita Medicare expenditures

under the ACO for Medicare fee-for-service beneficiaries for parts A and B services, adjusted for beneficiary

characteristics, is at least the percent specified by the Secretary below the applicable benchmark under clause (ii). The Secretary shall determine the appropriate percent described in the preceding sentence to account for normal variation in expenditures under this title, based upon the number of Medicare feefor- service beneficiaries assigned to an ACO.

‘‘(ii) ESTABLISH AND UPDATE BENCHMARK.—The Secretary shall estimate a benchmark for each agreement

period for each ACO using the most recent available 3 years of per-beneficiary expenditures for parts

A and B services for Medicare fee-for-service beneficiaries assigned to the ACO. Such benchmark shall

be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate

and updated by the projected absolute amount of growth in national per capita expenditures for parts

A and B services under the original Medicare feefor- service program, as estimated by the Secretary.

Such benchmark shall be reset at the start of each agreement period.

‘‘(2) PAYMENTS FOR SHARED SAVINGS.—Subject to performance with respect to the quality performance standards established by the Secretary under subsection (b)(3), if an ACO meets the requirements under paragraph (1), a percent (as

determined appropriate by the Secretary) of the difference between such estimated average per capita Medicare expenditures

in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by the program under this title. The Secretary shall establish limits on the total amount of shared savings that may be paid to an ACO under this paragraph.

‘‘(3) MONITORING AVOIDANCE OF AT-RISK PATIENTS.—If the Secretary determines that an ACO has taken steps to avoid

patients at risk in order to reduce the likelihood of increasing costs to the ACO the Secretary may impose an appropriate

sanction on the ACO, including termination from the program.

‘‘(4) TERMINATION.—The Secretary may terminate an agreement with an ACO if it does not meet the quality performance

standards established by the Secretary under subsection (b)(3).

‘‘(e) ADMINISTRATION.—Chapter 35 of title 44, United States Code, shall not apply to the program.

‘‘(f) WAIVER AUTHORITY.—The Secretary may waive such requirements of sections 1128A and 1128B and title XVIII of this

Act as may be necessary to carry out the provisions of this section.

‘‘(g) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise

of—

‘‘(1) the specification of criteria under subsection (a)(1)(B);

‘‘(2) the assessment of the quality of care furnished by an ACO and the establishment of performance standards under

subsection (b)(3);

‘‘(3) the assignment of Medicare fee-for-service beneficiaries

to an ACO under subsection (c);

‘‘(4) the determination of whether an ACO is eligible for shared savings under subsection (d)(2) and the amount of such

shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for

Medicare fee-for-service beneficiaries assigned to the ACO and the average benchmark for the ACO under subsection (d)(1)(B);

‘‘(5) the percent of shared savings specified by the Secretary under subsection (d)(2) and any limit on the total amount

of shared savings established by the Secretary under such subsection; and

‘‘(6) the termination of an ACO under subsection (d)(4).

‘‘(h) DEFINITIONS.—In this section:

‘‘(1) ACO PROFESSIONAL.—The term ‘ACO professional’ means—

‘‘(A) a physician (as defined in section 1861(r)(1)); and

‘‘(B) a practitioner described in section 1842(b)(18)(C)(i).

‘‘(2) HOSPITAL.—The term ‘hospital’ means a subsection (d) hospital (as defined in section 1886(d)(1)(B)).

‘‘(3) MEDICARE FEE-FOR-SERVICE BENEFICIARY.—The term ‘Medicare fee-for-service beneficiary’ means an individual who

is enrolled in the original Medicare fee-for-service program under parts A and B and is not enrolled in an MA plan under part C, an eligible organization under section 1876, or a PACE program under section 1894.’’.

 
 

Sec. 3022 as modified by Sec. 10307. Medicare Shared Savings Program.

 

In April 2005, CMS initiated the Physician Group Practice (PGP) demonstration, which offers 10 large practices the

opportunity to earn performance payments for improving the quality and cost-efficiency of health care delivered to Medicare fee-for-service beneficiaries. Accountable care organizations (ACOs) would go beyond the PGP model, which is based on physician groups, to include additional providers.

 

The provision allows groups of providers who voluntarily meet certain statutory criteria,

including quality measurements, to be recognized as ACOs and be eligible to share in the costsavings

they achieve for the Medicare program. Beginning no later than Jan. 1, 2012, this shared

savings program will enable eligible ACOs to qualify for an annual incentive bonus if they

achieve a threshold savings amount, established by the Secretary, for total per beneficiary

spending under Medicare Parts A and B for those beneficiaries assigned to the ACO. An eligible

ACO is defined as a group of providers and suppliers who have an established mechanism for

joint decision making, and are required to participate in the shared savings program for a

minimum of three years, among other requirements. An ACO includes practitioners (physicians,

regardless of specialty; nurse practitioners; physician assistants; and clinical nurse specialists) in

group practice arrangements; networks of practices; and partnerships or joint-venture

arrangements between hospitals and practitioners, among others.

 

In each year of the three-year agreement period, an ACO will be eligible for a shared savings

payment only if the estimated average per capita Medicare expenditures for Parts A and B

services, adjusted for beneficiary characteristics is at least the specified percentage below the

applicable benchmark. This appropriate percentage is to account for the normal variation in

expenditures based on the number of beneficiaries assigned to the ACO. The ACO’s benchmark

for each agreement period is to be based on the most recent available three years of per

beneficiary Part A and B spending for its assigned beneficiaries. This benchmark will be adjusted

for beneficiary characteristics and updated by the projected absolute growth in national per

capital expenditures for Part A and B FFS Medicare services, as estimated by the Secretary. The

benchmark will be reset at the start of each agreement period. Subject to attaining quality

performance standards, an ACO will receive a percentage of the difference between the estimated

average per capita Medicare expenditures in a year, adjusted for beneficiary characteristics, under

the ACO and the ACO’s benchmark. The remainder of the difference will be retained by the

program. The Secretary is to establish limits on the total amount of shared savings that may be

paid to an ACO.

 

 

The Secretary may use a partial capitation model or other payment models. Under the partial

capitation model, a qualifying ACO would be at financial risk for some, but not all, of the Part A

and B items and services. The Secretary may limit participation in this model in highly integrated

systems capable of bearing risk. Also, spending under this model cannot result in greater spending

than would otherwise be expended if the model were not implemented.

 

To earn the incentive payment, the organization is to submit data pertaining to quality and fulfill

certain quality requirements related to clinical processes and outcomes, patient and caregiver

experience of care, and utilization measures. The Secretary has the authority to adjust the savings

thresholds to account for the varying sizes of participating ACOs. If the Secretary determines that

an ACO has taken steps to avoid at-risk patients in order to reduce the likelihood of increasing

costs, the Secretary is authorized to impose an appropriate sanction, including terminating

agreements with participating ACOs. The CBO score is -$0.5 billion for FY2010-FY2014 and

-$4.9 billion for FY2010-FY2019.

 
 
Comments