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ACO Incentives for Rural Participants Unconvincing

Alexandra Wilson Pecci, for HealthLeaders Media, June 1, 2011

Recent clarification from the Centers for Medicare & Medicaid Services about how rural providers may participate in ACOs has done little to change Gary Tiller's mind about them.

"I just don't think there's any way we're going to play," says Tiller, CEO of  Ninnescah Valley Health Systems in Kingman, Kansas.

That's even with all the exceptions detailed by CMS, which include allowing ACOs with fewer than 10,000 assigned beneficiaries to be exempt from the 2% savings threshold. In addition, CMS is also proposing a sliding-scale confidence interval based on the number of assigned beneficiaries.

In the new fact sheet, "Medicare Shared Savings Program and Rural Providers," CMS says that it "recognizes the unique needs and challenges of rural communities and the importance of rural providers in assuring access to health care."


Webcast: Alternative ACO Strategies: June 7, 2011, 1:00–2:30 pm (ET) Register today.


The clarifications relate to four specific provisions designed to increase rural participation in the Medicare Shared Savings Program: that ACOs in rural communities would be eligible for an exemption from the 2% net savings threshold; that a lower confidence interval would be used to set the minimum savings rate for ACOs; that certain critical access hospitals would be eligible entities to form their own ACO; and that there would be incentives for including federally qualified health centers and rural health clinics in the ACO.

But even with these provisions, Jim Wathen, CEO of Southern Coos Hospital and Health Center in Bandon, Oregon, doesn't sound swayed.   

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