The reviews are in, and most healthcare provider groups are finding little to their liking in the proposed rules for the Centers for Medicare & Medicaid Services’ (CMS) voluntary Accountable Care Organization (ACO) program. Organizations like SHM have publically supported the concept of an ACO, but details in the 128 pages of proposed rules released March 31 apparently were not what they had in mind. The problem, as many provider groups detailed in a flurry of letters sent before the June 6 deadline for comments, is too much stick and not enough carrot.
The Patient Protection and Affordable Care Act of 2010, which authorized the program, stipulates that any Medicare savings deriving from ACOs must be divided between CMS and participating organizations. Organizations can choose between two financial models: One track allows participants to retain 60% of overall savings but also requires them to assume financial risk from the start; a second track delays any risk until the third year and offers 50% savings. In exchange, ACOs must achieve an average savings of 2% per patient, as well as meet or beat thresholds for 65 measures of quality.
Critics contend that the recommended rules are so onerous and bureaucratic that the program is likely to attract few takers. In its comment letter, SHM expressed an opinion shared by many: “Although the ACO concept holds much promise, the proposed rule as written presents many barriers to successful ACO development and operations. Establishing an ACO will require an enormous upfront investment from participating providers, but the proposed rule does not allow for enough flexibility to ensure a reasonable return on investment.” (Read SHM’s response letter at www.hospital medicine.org/advocacy.)
The American College of Physicians similarly warned that the proposed rules set the bar too high for many would-be participants. “The required administrative, infrastructure, service delivery, and financial resources and the need to accept risk will effectively limit participation to those few large entities already organized under an ACO-like structure; that already have ready access to capital, substantial infrastructure development, and experience operating under an integrative service/payment model (e.g. Medicare Advantage),” the ACP wrote in its response letter (www.acponline.org/run ning_practice/aco/acp_comments.pdf).
The tone was markedly different in letters from consumer and advocacy groups, including one by the Campaign for Better Care, signed by more than 40 organizations (www.nationalpartnership.org). “Overall we believe you are moving in the right direction with the proposed rule, and we applaud your commitment to ensuring ACOs deliver truly patient-centered care,” the letter stated. Acknowledging the negative feedback, the letter continued, “While some are concerned about asking too much of ACOs, we cannot expect genuine transformation to be easy, and we know that these new models must be held to standards that ensure they deliver on the promise of better care, better health, and lower cost.”
—Michael W. Painter, JD, MD, senior program officer, Robert Wood Johnson Foundation, Princeton, N.J.
Michael W. Painter, JD, MD, senior program officer at the Robert Wood Johnson Foundation in Princeton, N.J., helped research and write the foundation’s own comment letter, which he says tried to bridge the divide between provider and patient groups.
“We did get behind the notion of ratcheting up the accountability for quality and cost, including the risk, as soon as it makes sense to do it,” he says. “Not dragging our feet, recognizing that we have to do it rapidly, but it has to be balanced by being reasonable to help move from where we are.”