The following installment was extracted from the Federal Register volume in which the proposed regulations appear:  http://www.gpo.gov/fdsys/pkg/FR-2011-04-07/pdf/FR-2011-04-07.pdf, on  FR pages 19542-44; or PDF page 284-86.  

• Leadership and Management Structure

1. The ACO’s operations would be managed by an executive[,] officer, manager, or general partner, whose appointment and removal are under control of the organization’s governing body and whose leadership team has demonstrated the ability to influence or direct clinical practice to improve efficiency processes and outcomes.
2. Clinical management and oversight would be managed by a senior-level medical director who is a board-certified physician, licensed in the state in which the ACO operates, and physically present in that State.
3. ACO participants and ACO providers/suppliers would have a meaningful commitment (e.g., meaningful financial investment or human investment such that the potential loss or recoupment of the investment is likely to motivate the participant) to make the clinical integration program succeed.
4. The ACO would have a physician-directed quality assurance and process improvement committee that would oversee an ongoing quality assurance and improvement program.  The quality assurance program would establish internal performance standards for quality of care and services, cost effectiveness, and process and outcome improvements, and hold ACO provider/suppliers accountable for meeting the performance standards. The program would also have processes and procedures in place to identify and correct poor compliance with such standards and to promote continuous quality improvement.
5. The ACO would develop and implement evidence-based medical practice or clinical guidelines and processes for delivering care consistent with the goals of better care for individuals, better health for populations, lower growth in expenditures.  The guidelines and care delivery processes would cover diagnoses with significant potential for the ACO to achieve quality and cost improvements, taking into account the circumstances of the individual beneficiary, and could be accomplished, for example, through an integrated electronic health record with clinical decision support.  ACO participants and ACO providers/suppliers would have to agree to comply with these guidelines and processes and to be subject to performance evaluations and potential remedial actions.
6. The ACO would have an infrastructure, such as information technology, that enable the ACO to collect and evaluate data and provide feedback to the ACO provider/suppliers across the entire organization, including providing information to influence care at the point of care via, for example, shared clinical decision support, feedback from patient experience of c are surveys or other internal or external quality and utilization assessments.
7. As part of the application process, the ACO would submit all of the following:

• ACO documents (e.g., participation agreements, employment contracts, and operating policies) that describe the ACO participants’ and ACO providers/suppliers’ rights and obligations in the ACO, the shared saving that will encourage ACO participants  and ACO providers/suppliers to adhere to the quality assurance and improvement program and the evidenced-based clinical guidelines;
• Documents that describe the scope and scale of the quality assurance and clinical integration program, including documents that describe all relevant clinical integration program systems and processes, such as the internal performance standards and the processes for monitoring and evaluating performance;
• Supporting materials documenting the ACO’s organization and management structure, including an organizational chart, a list of committees (including names of committee members) and their structures, and job descriptions for senior administrative and clinical leaders; and
• Evidence that the ACO has a board-certified physician as its medical director who is licensed in the State in which the ACO resides and that a principal CMS liaison is identified in its leadership structure.
• Additionally, upon request, the ACO would also be required to provide copies of the following:
  • Documents effectuating the ACO’s formation and operation, including charters, by-laws, articles of incorporation, and partnership, joint venture, management, or asset purchase agreements;
  • Descriptions of the remedial processes that will apply when ACO participants and ACO providers/suppliers fail to comply with the ACO’s internal procedures and performance standards, including corrective action plans and the circumstances under which expulsion could occur.
  • CMS requests comments on whether it should allow consideration of ACOs with innovative leadership and management structures, that do not meet the above requirements, to have an opportunity to describe an alternative mechanism for how their leadership and management structure would conduct the activities noted previously in order to achieve the same goals.
  • CMS also requests comments on the proposed leadership and management structure and whether the compliance burden associated with these requirements will discourage participation, hinder innovative organization structures, or whether there are other or alternative leadership and management requirements that would enable these organizations in meeting the three-part aim (i.e., better care for individuals, better health for populations, lower growth in expenditures).

1. Accountability for Beneficiaries—An ACO executive who has the authority to bind the ACO must certify to the best of his or her knowledge, information, and belief that the ACO participants are willing to become accountable for, and to report to CMS on the quality, cost, and overall care of the Medicare FFS beneficiaries assigned to the ACO.  The certification would be included as part of the ACO’s application and 3-year participation agreement.