Scrambling to rescue ACO’s

Health care systems such as the Mayo and Cleveland clinics  – which are organized the way policy makers envision accountable care organizations – initially balked at the rules proposed by CMS. Now, the rules have changed.

After receiving a significant amount of feedback about the initial proposed rules for Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP) – along the lines of 1200 comments and hours of testimony in dozens of listening sessions – the Center for Medicare and Medicaid Services (CMS) decided to make many concessions to the wishes of health care providers and potential ACOs.

This may have been a reaction not only to the testimony and official comments, but also to the lack of application for participation by any of the health systems already famous for providing well-coordinated care (the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare).  The final ACO rules were published last month, and comparing the new wording to the original proposal reveals an astonishing number of new incentives for participation.  Dr. Donald Berwick, the former head of CMS, published a commentary in The New England Journal of Medicine last month to educate providers about these ACO incentives.

Part of the improvement in the rules was a result of overall increased ease of participation for providers. To make it clear which Medicare patients for which a particular provider will be responsible, the new rules increase the frequency at which each provider’s benchmark population is prospectively identified (based on who gives each patient most of their primary care) but continues to be fair to providers by only holding them accountable for patients that truly are found – retrospectively – to be part of their patient population at the end of each year.  In addition, CMS decreased the number of quality measures required to be reported from 65 to 33 measures, focusing on those measures that matter most. The changes will decrease the work providers must spend on documentation.

Even more impressively, CMS has agreed to provide an option for participating providers to share in cost savings if they occur through their ACO; yet if there are financial losses, that loss is completely covered by CMS instead of loss-sharing.  ACOs that choose this option will have fewer bonuses from any cost savings that would occur than if they had chosen a combined savings/loss sharing option.  Moreover, CMS initially ruled that those choosing to share only in savings would have to produce more than 2 percent savings to begin sharing in the financial benefits.  However, the new rules now allow shared savings starting with the “first dollar” whether the ACO chooses the shared savings-only or shared savings and losses option.

Commentary

If CMS were my landlord, I would sign a 50-year lease.  In terms of negotiating a contract with potential Accountable Care Organization (ACO) providers, the providers definitely came out on top.  Health care providers basically negotiated the equivalent of the first month’s rent free and a reduction in rent.  Oh, and I might as well say that they only have to clean half of the apartment when they move out.

That being said, the concept of the apartment, or the ACO, is quite daunting to begin with and, based on the lack of participation after the first round of proposed rules, CMS made many necessary major improvements in the rules regarding ACOs to hopefully promote participation to a meaningful level. CMS must get a large enough contingent of ACO participants both to establish a sustainable financial picture for Medicare and improve the quality of care received by Medicare beneficiaries.  One has to ask, though, if CMS can still afford to contract with ACOs under the final rules, assuming then the government would have been more profitable under the previous proposed rules, how much shared-savings is CMS expecting and therefore still holding out on?

Berwick DM. Making good on ACOs’ promise–the final rule for the medicare shared savings program. N Engl J Med. 2011 Nov 10;365(19):1753-6. Epub 2011 Oct 20.

by

Lisa Maurer, MD