An Inflection Point for Federal ACO Development? Provider Leaders Throw Down the Gauntlet to CMS | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

An Inflection Point for Federal ACO Development? Provider Leaders Throw Down the Gauntlet to CMS

February 7, 2015
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As clearly as possible, the leaders of the nation’s accountable care organizations have thrown down the gauntlet at the feet of CMS officials

If ever there were an inflection point for the development of accountable care organizations (ACOs), now would seem to be that moment in U.S. healthcare.  The sending of the Feb. 6 letter to Marilyn Tavenner, R.N., the Administrator of the Centers for Medicare and Medicaid Services, by senior leaders at the Bradenton, Fla.-based National Association of ACOs (NAACOS), the nationwide advocacy group for ACOs, could not have been more pointedly timed.

It followed by two months CMS’s Dec. 1 release of proposed changes to its established accountable care organization (ACO) programs, including updated provisions around financial risk, and the creation of an entirely new third category for ACO participation, outside of the existing Medicare Shared Savings Program (MSSP) and the Pioneer ACO Program, under the rubric "Track Three."

As Senior Editor Gabriel Perna noted in his Dec. 1 report, “In the 429-page rule, CMS aims to get more healthcare organizations to take on greater risk through ACOs, while also try to amend many of the problems that have plagued those in the current programs.

“The proposed changes include the introduction of the new two-sided risk ACO called Track Three, which will integrate elements from the Pioneer ACO program, such as higher rates of shared savings and prospective attribution of beneficiaries. In exchanging for going with the new two-sided risk model, ACOs will be given a longer lead time to transition including one-sided risk in the first agreement period. They also can go with this without having completed a prior agreement under a one-sided model. Ultimately, the new model – being called “Track Three” – will include more risk, but more savings for participants, specifically up to 75 percent savings based on quality performance.”

Perna also noted on Dec. 1 that “The prospective attribution change will give ACOs a list of assigned beneficiaries at the start of the performance year and will not add anyone else during the course of the year.  This is an attempt by CMS to quell many of the concerns that current ACOs have faced on patient attribution. The agency is also changing the way beneficiaries are assigned, making it easier for patients to know when they are in an ACO. CMS has done this by removing ACO assignment to certain specialty types whose services are not likely to be indicative of primary care services.”

Now comes NAACOS, with a list of nine demands. The NAACOS press release noted that the organization’s letter had told Ms. Tavenner that “We specifically recommend [that CMS]:

  1. provide an option for more predictable, prospective assignment of Medicare beneficiaries in all MSSP tracks;
  2. stronger consideration of Physician Specialties and Non-Physician Practitioners in the Assignment Process
  3. give Medicare beneficiaries an option to align with their primary care physician and ACO;
  4. remove financial barriers to primary care by allowing ACOs to waive co-pays;
  5. establish a more appropriate balance between risk and reward through increased savings ratios;
  6. strengthen the incentives to improve quality of care;
  7. adopt payment waivers to eliminate barriers to care coordination;
  8. modify the current benchmark methodology to include regional cost factors; and
  9. provide better and timelier data to the ACOs."

All of these requests/demands (depending on how one sees them) are extremely commonsensical, and in fact, derive from the experiences that the senior leaders of the patient care collaboratives developing ACOs have been having since the Medicare Shared Savings Program was created a few years ago. Assignment/attribution, for example, has been a perpetual problem for ACO leaders.

As Dominique Morgan-Solomon, the vice president of population health at Steward Health Care Network, told me last fall, “The most difficult piece… has been beneficiary engagement. So one of the challenges we’ve had,” she told me, “because we’ve been trying to do population health for all groups covered; the challenge has been, that’s great on this side, but it requires beneficiaries’ knowledge and engagement with us as a provider. And they’re not always sure they belong to us. So you’ll potentially have a beneficiary who has seen one of our providers a few years ago, maybe via a specialist in our network, but their primary care provider is with a different system. So one of the challenges has been, how do you get these beneficiaries engaged, because in some cases, they haven’t realized they’re attributed to us. And they have to opt in, and they get letters from CMS, but you can imagine, of course, that there are populations that may not have caregivers who explain everything to them; so we’ve had to get creative there.”

And then, of course, there have been very significant challenges around the incentive and risk formulas being used by CMS in the Medicare Shared Savings Program. Indeed, it is not only the leaders of NAACOs, such as Clifton Gaus, its CEO, who have been consistently critical of CMS for problems around incentive and risk in the program. The extremely detailed, 36-page letter from Dr. Gaus and his colleagues at NAACOS was co-signed by 33 national organizations, including the Charlotte-based Premier health alliance and the Englewood, Colo.-based Medical Group Management Association (MGMA).

As Blair Childs, Premier’s senior vice president of public affairs, said in a statement Feb. 6, “We are at a pivotal point in the MSSP, particularly given Health and Human Services’ announcement last week about accelerating the provider transition to advanced payment models such as ACOs.  In order to ensure growing program participation,” Childs insisted, “it is essential that CMS provide more choices and greater incentives to ensure the right risk-reward balance. Moreover, we believe CMS should provide choices in minimum savings rates, which will level the playing field for smaller ACOs, as well as those in areas with historically low healthcare spending. Last, because beneficiaries have the right to seek care from any provider that accepts Medicare, we need more current, actionable data that give ACOs an opportunity to coordinate care and avoid unnecessary services.” 

And Anders Gilberg, MGMA’s senior vice president, government affairs,  put it this way in his statement: “Without significant improvements to the Medicare Shared Savings ACO program, the longevity of the program is in serious doubt. A majority of existing ACOs will not participate beyond the first three-year contract period,” he said pointedly, “if CMS doesn’t modify existing rules to create a more balanced incentive structure and increase flexibility for ACOs to assume additional financial risk.”

Taken collectively, all these statements and actions can be seen clearly for what they are: a collective throwing down of the gauntlet to CMS senior officials regarding essential problems in the Medicare Shared Savings Program for ACOs (and of course, the Pioneer Program has its share of fundamental issues, too, as we’ve noted previously at Healthcare Informatics). While virtually everyone agrees that the core concept of the ACO as provided for in CMS’s two, and soon-to-be three, federal programs, is a very, very valuable, worthy one, and furthermore, a concept that could help lead the industry into the new healthcare that everyone’s been envisioning for decades, the devil really is in the details with all of this stuff.

And when it comes to issues like risk and incentive formulas, attribution, and provider alignment, CMS officials have simply got to “get with the program,” as they say, and improve the details of their ACO programs—so very much rides on the outcome of their actions in the next year.

Will CMS officials do what is necessary to save and enhance their ACO programs? Only time will tell. But the gauntlet surely has been thrown down now, as clearly as it could possibly be.


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