Dr. Postma recently joined the CMS staff as one of several Medical Officers for the Center for Medicare Management (CMM). A neurologist by training, Dr. Postma’s most recent work included a role in the Senate Finance Committee on Healthcare Reform (PPACA). During our meeting, Dr. Postma provided HBMA with an educational overview of Accountable Care Organizations (ACOs) a "new" shared savings program legislated under PPACA (Health Care Reform). The comment period for responding to the proposed rule for the Medicare Shared Savings Program ended on June 1, 2011. To clarify confusion and speculation surrounding the ACO healthcare model:

 

·         Are collaborations of primary care professionals and other health service providers, such as other physicians and hospitals;

·         Must have the capacity to improve health outcomes and the quality of care while slowing the growth in overall costs for a population of at least 5,000 patients, cared for by a well-defined group of primary care professionals;

·         Must be capable of measuring improvement in quality, data gathering and reporting; payments will increase when such improvements take place;

·         Providers are eligible to share in savings demonstrated by the ACO

·         Cost. ACOs will likely face start-up and first-year costs six to 14 times higher than HHS has estimated, according to a study released by the American Hospital Association.

·         EHR. 50 percent of participating providers must successfully meet EHR Meaningful Use requirements, which may be difficult.

·         Specialty physicians. This program is geared toward primary care, and there does not currently appear to be a well-defined role for specialty physicians.

·         Lackluster industry support. To date, a number of key health care organizations have expressed serious reservations about their participation in the program without significant structural changes, including: Mayo Clinic, Cleveland Clinic, Geisinger Health Systems and InterMountain Health.

·         Onerous reporting. ACOs will be expected to report on over 60 "quality reporting metrics" – several times higher than both hospitals and physicians are reporting today.

·         The unknown. Providers will not know who their patients are until they are through the first full year of the new healthcare delivery model. In addition, those anonymous ACO patients may seek health care anywhere they want. If they run up a health care bill at another provider’s office or facility, their ACO is still responsible for the cost. This puts the ACO at risk.

1.       The intent of the legislation is to provide quality improvement and cost reduction through coordinated patient care.

2.       CMS seeks to use the ACO model as a means of replacing the current "silos" existing in today’s healthcare system. It is also a means of enhancing communication, reducing duplicate and unnecessary services which would result in enhancing patient care.

3.       ACOs are an attempt to take successes experienced by integrated systems such as Geisinger, University of Michigan, and InterMountain Health Care and apply them throughout the broader health care community.

4.       ACOs are seen as PQRS on steroids.

5.       ACOs are not HMOs. While the goals with respect to managing care are similar, the tactics are very different. ACOs are not envisioned to pay for medical services. Although certain models have the latitude to incorporate capitated payments, the initial proposal is to simply track quality and costs across the ACO group and, should goals be met, CMS will issue the ACO a shared savings check at the end of the period.

6.       This is a very ambitious project and results may not be realized for 15 years.

7.       Based on results from a Physician Group Practice (PGP) Demonstration Project, quality improvements and cost savings are achievable.

8.       ACOs are voluntary and there is no statutory requirement for physicians or medical providers to form or participate in ACOs.

9.       Beginning January, 2012, CMS is authorized to contract with ACOs that meet program requirements.

10.   ACOs are based on fee for service reimbursement.

 

·         HBMA expressed skepticism that the start-up costs of an ACO would be recovered through shared savings. Dr. Postma acknowledged that cost has been reported as a concern with this legislation. However, she cited that 60% of the PGP participants received shared savings, which, in some cases, exceeded their cost of program development.

·         We discussed the premise that the FFS payment model would be unaltered in most cases. HBMA and others share concerns that ACOs may lead to full capitation, and are therefore closely following regulatory updates and implementations.

·         Industry comments, including HBMA’s comments, were accepted through June 6, 2011. CMS is evaluating the comments and hopes to have final guidance prior to the end of the year.

 

HBMA believes that the proposed ACO regulations, as written, contain significant flaws that have dampened industry enthusiasm toward the initiative. All of the entities that participated in an earlier CMS sponsored Demonstration Project that sought to test key components of the ACO model, have informed CMS that they will not form an ACO unless significant changes are made in the final rule. Virtually all medical trade associations (representing physicians, hospitals, insurance companies, and billing companies) have commented on serious deficiencies in the proposed rule.

 

It does not appear that many organizations (if any) will volunteer to become an ACO unless significant changes are made in the final rule. If CMS does make the program more appealing in the final rule, it will still be difficult for organizations to restructure and become operational by January 1, 2012. If CMS does not revise the program in the final rule, then to quote Gail Wilenski (former HCFA Administrator), "CMS may have created a party that no one will attend."

 

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