ACO Proposed Rule Review – Part One

IIA—Operational definition of ACO for Shared Savings Program


  • Accountable Care Organization (ACO) means a legal entity that is recognized and authorized under applicable State law, as identified by a Taxpayer Identification Number (TIN), and comprised of an eligible group of ACO participants that work together to manage and coordinate care for Medicare FFS beneficiaries and have established a mechanism for shared governance that provides all ACO participants with an appropriate proportionate control over the ACO’s decision making process.
  • ACO participant means a Medicare-enrolled provider of service and/or a supplier.
  •  ACO provider/supplier means a provider of services and/or a supplier that bills for items and services it furnishes to Medicare beneficiaries under a Medicare billing number assigned to the TIN of an ACO participant in accordance with applicable Medicare rules and regulations.

IIB—Eligibility requirements for ACO participation

  • Eligible entities include:
    1. ACO professionals in group practice arrangements.
    2. Networks of individual practices of ACO professionals.
    3. Partnerships or joint venture arrangements between hospitals and ACO professionals.
    4. Hospitals employing ACO professionals.
    5. Critical Access Hospitals billing under “Method II” (CAH (1) receives 101% of the reasonable cost payment for its facility costs; and (2) 115% of the amount otherwise paid under the MPFA for professional services under Medicare—note that the physicians reassign his or her right to bill the Medicare program for those services to the CAH).
    6. NOTE: CMS is proposing to provide an incentive for including RHCs and FQHCs as ACO participants by allowing ACOs that include such entities to receive a higher percentage of any shared savings under the program.


  • CMS is specifically requesting feedback on:
    1. The kinds of providers and suppliers that should or should not be included as potential ACO participants;
    2. The potential benefits or concerns regarding including or not including certain provider or supplier types;
    3. The administrative measures that would be needed to effectively implement and monitor particular partnerships;
    4. Other ways in which CMS could employ the discretion provided to the Secretary to allow the independent participation of providers and suppliers not specifically mentioned in the statute, for example, through an ACO formed by a group of FQHCs and RHCs; and
    5. Any operational issues associated with the proposal.

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