Much-anticipated federal ACO rules released

The Obama administration, on Thursday, released its much-anticipated rules for the establishment of accountable care organizations within the Medicare program (Source: “Obama administration offers rules for delivering care to older Americans,” Washington Post, March 31, 2011).

The rules for controversial manage care program call for doctors and hospitals to save money by coordinating treatment for their patients, and is seen as the first significant change to the delivery of care under the Affordable Care Act.

While Obama administration officials predicted that ACOs will save Medicare between $510 million and $960 million during the first three years after they take effect in January, critics, including insurers, warn that the arrangements could backfire by fostering large, powerful organizations of doctors or hospitals that could command higher prices by suppressing competition.

“Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close,” CMS Director Donald Berwick wrote in an essay pubished by the New England Journal of Medicine. “Too many Medicare beneficiaries — like many other patients — have suffered at the hands of wasteful, ineffective, and poorly coordinated systems of care, with consequent costs that are proving unsustainable.”