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larger variations in expenditures, starting at 3.9 percent for the minimum beneficiary number: 5,000. ACOs with larger populations would have a smaller MSR due to anticipated smaller variations.

  • III.


    • A.

      Operation of Quality Measures

In order to receive any payments for shared savings under the Program, an ACO must meet certain quality measures. Performance measures will be conducted once per year. Shared savings payments will be based in part on quality scores; the higher an ACO’s score, the higher the shared savings payment for which it is eligible. This way, ACOs will not achieve cost savings by compromising patient care. The maximum proportion of shared savings an ACO using a two-sided risk model can receive is 60 percent; the maximum proportion for an ACO using a one-sided risk model is 50 percent. For the first year, the only quality measure an ACO must meet is to accurately report on quality measures. This functions as both a grace period for ACOs and a way for CMS to establish what benchmarks are appropriate for quality measures.

B. Categories of Quality Measures

There are 65 quality measures that CMS proposes ACOs will be evaluated on in the first year of their operation. The measures fall into five general categories: Patient Experience of Care, Care Coordination, Patient Safety, Preventive Health, and At-Risk Population/Frail Elderly Health. These measures will be reported to CMS through surveys, claims submission and data collection. ACOs will be given points for performance on each measure, and each category will have its own score. The weighted score will determine the maximum sharing rate for which the ACO is eligible. Patient survey results and quality measures will be made available to the public by the ACO in a standardized format that will be issued in subregulatory guidance.

Specifications for the proposed quality measures will be available on CMS’ website prior to the start of the Program. Quality measures for the remaining two years of an ACO’s three-year agreement will be proposed in future rulemaking.

  • IV.


    • A.

      Patient Notification and Information

One purported benefit of ACOs is that they will enable information-sharing across all of a beneficiary’s providers, which will lead to better care. Under the proposed rule, if a Medicare beneficiary’s provider participates in an ACO, the provider must notify beneficiaries that it participates in the ACO and offer information about the ACO. Providers must also post signs in their facilities indicating their ACO participation and make available written information about the ACO. While an individual is informed that the provider is participating in an ACO, he or she does not elect to participate and is free to seek services from non-ACO providers. However, the beneficiary may opt out of sharing claims data (see below). ACOs may not use prior authorization, utilization management, or otherwise limit the services their beneficiaries receive.

B. Request for Medicare Claims Data

ACO providers may request claims information about a beneficiary from CMS. The ACO must inform the patient in writing that it may share claims data, and the beneficiary may opt out of having his or

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