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What Happens When CMS Asks for the Sale?

June 7, 2011
by By Mark Hagland
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Stay tuned—fixes to the ACOs proposed rule are likely ahead

One development that occurred last month that hasn’t elicited a tremendous amount of coverage or comment happened on May 17, when the federal Centers for Medicare and Medicaid (CMS) announced a new model for accountable care organization (ACO) development that was obviously designed to improve provider organizations’ interest in concept. The “Pioneer ACO Model,” as CMS is calling it, would allow already significantly integrated health systems to begin participating in the ACO shared savings program as early as this summer, rather than having to wait until January 1 to do so, as the formal program’s start date had established.

Is CMS getting nervous? It’s likely. Healthcare leaders are expressing considerable skepticism regarding the challenges embedded in the proposed rule, released on March 31. This widespread skepticism exists over a variety of areas, from those around assumption of financial risk, to the data-sharing complexities in the rule (including a daunting aspect around an element in the proposed rule that would allow patients to prevent their data from non-ACO-based care from being shared with their PCPs’ ACOs—something that provider executives naturally see as a difficult pill to swallow).

As Chet Speed told me this week, he and his colleagues at the American Medical Group Association (AMGA) have very serious concerns about the many of the elements in the proposed rule, including the above. And their association includes the large medical groups that participated in Medicare’s shared-savings demonstration project—so their skittishness should cause many to pause.

The reality is that our healthcare system—and our society—desperately needs new payment concepts and mechanisms, and the ACO concept is as strong as any. But it’s also clear that CMS will need to make considerable fixes in order to make that concept palatable enough to gain real traction among providers nationwide, or else the shared-savings program is doomed. In other words, they’re really going to have to “ask for the sale,” as they say in the sales business.

And that’s pretty much what Dr. Berwick did last month, not only in making the announcement of the faster-track “pioneer” program (along with “Accelerated Development Learning Sessions” for provider leaders curious to learn more—and possibly, apprehensive about the program at this stage), but also in subsequent media interviews, in which he denied that provider concerns had motivated the new program additions. In one interview with a trade newsletter, Berwick was quoted as saying that provider complaints were “nothing we didn’t anticipate,” adding that lively reactions from hospitals and physician groups showed that their leaders were engaged.

So what does all this mean? Having observed this rule-making and rule-modifying process play out over the years across a number of different situations, a few things seem clear. First, on the one hand, one might safely predict that the final ACOs rule will end up somewhere in the middle, at some place between the arguably rather harsh framework of the proposed rule on the one hand and the passionate pleas of patient care leaders nationwide on the other hand.

Second, it’s equally clear that CIOs and other healthcare IT leaders will need to begin moving forward very quickly to put in place the interoperability, data collection, data analysis, health information exchange, and other elements that will be absolutely critical to success under the new reimbursement models and arrangements that can be expected to emerge.

The bottom line? Some version of this phenomenon is going forward, most likely numerous new versions, both via the Medicare program and elsewhere, as the public and private purchasers of healthcare continue to make their voices heard in the evolving healthcare market. In other words, whatever the specifics of the final ACOs proposed rule, the kinds of changes encompassed by this payment innovation are bound to be replicated in the future.

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Mark Hagland

Editor-In-Chief

Mark Hagland

@hci_markhagland

www.healthcare-informatics.com/blog/mark-hagland

Mark Hagland became Editor-in-Chief of Healthcare Informatics in January 2010. Prior to that, he...