Accountable care organizations (ACOs) have been described as having three fundamental characteristics:^a 

• They are able to deliver and manage the continuum of care across a range of settings, particularly ambulatory and inpatient settings
• They can plan budgets and resource needs prospectively
• They have a large enough patient population to support “comprehensive, valid, and reliable performance measurement” (which the Centers for Medicare & Medicaid Services [CMS] has set at 5,000 Medicare beneficiaries for its demonstration program)

These characteristics are reminiscent of the capabilities needed to manage “at-risk” payment arrangements in the 1990s era of managed care. The primary difference is that while “at-risk” payment in the 1990s was driven by commercial payer organizations, this time around it is a mandate from CMS.

The proposed ACO regulations issued March 31, 2011, aim to give more structure to the initial proposal around ACOs and give more specific guidance around issues such as participation eligibility, governance requirements, the savings options (ACOs must pick one of two options), assignment of beneficiaries, quality measures/performance, marketing, the role of HIT, quality and reporting requirements, start and antikickback waivers for ACOs, and IRS guidance regarding ACOs.

Continued on hfma.org