On October 20, 2011, the U.S. Department of Health and Human Services ("HHS") issued the final regulations implementing the Medicare Shared Savings Program ("MSSP") and its Accountable Care Organization ("ACO") model ("Final Rule"). The Final Rule will be published on November 2, 2011 in the Federal Register.

In response to the massive outpouring of input from stakeholders and other innovators in health care coordination, the Final Rule departs from the proposed regulations in important ways. The Final Rule:

  • removes downside risk from Track 1 ACOs, while keeping two-sided risk for Track 2 ACOs;
  • allows ACOs in both tracks to share on the first dollar of savings once the minimum savings rate has been achieved;
  • makes important changes to the assignment rules, including preliminary prospective assignment with a final reconciliation after each performance year;
  • reduces the number of quality measures from 65 in five domains to 33 in four domains;
  • expands the way Federally Qualified Health Centers ("FQHCs") and Rural Health Clinics may participate in the MSSP; and
  • eliminates the 50% "meaningful use" requirement as a condition of participation.

The Shared Savings Program will be established January 1, 2012, with initial MSSP ACOs being launched as early as April 1, 2012.