ACO Final Rule: 10 Healthcare Leaders Sound Off

Healthcare leaders have been waiting since March 31 for the final rules governing accountable care organizations to be finalized. And many of them feared the worst, given the provisions in the proposed set of rules.

While the final regulations released last Thursday allow numerous concessions and dangle many carrots to woo providers, many healthcare leaders still have serious concerns. A chief impediment, many say, remains the huge cost and difficulty of setting up an infrastructure to deal with what will still amount to an enormously complex system that they'll be stuck with for three years. 

And, many of them wonder whether the revenue they eventually receive, if an, will justify their considerable investment. The Centers for Medicare & Medicaid Services' final ACO document indeed proffers a kinder, gentler, set of requirements and indicates that federal health officials listened to a lot, if not all, of what they were told.

1. Thomas Graf, MD, associate chief medical officer, Population Health; chairman, Community Practice, Geisinger Health System:

"We believe that the leadership at CMS has been incredibly responsive to the many perspectives offered to improve this important initiative. These final rules show a clear interest on the part of the government to work with private systems to reform health care by improving quality and controlling cost.

"While we are still doing our own internal assessment, it is clear that these revised rules have significantly advanced the goals of value re-engineering in healthcare. We look forward to continuing discussions with CMS leadership on the opportunities to participate in this and other initiatives."

2.  Chris Van Gorder, CEO of Scripps Health:

"Probably our biggest concern is the patient assignment process.  The initial [proposed] regulations required primary care physicians to be exclusive to an ACO.  Now, based upon many complaints, CMS appears to have eased that regulation significantly.  It appears now that physicians can participate in multiple ACOs by using different Tax Identification Numbers (billing under their own or the different ACO TINS).   

"I think this will just confuse the issue of patient attribution to the ACOs.  I can understand the desire on the part of physicians to work with multiple organizations, but if the goal is to establish an integrated, patient-friendly, high-quality, medical management system, I can't see that happening effectively if the patient and physician is moving in and out of that system.

"And, it will be very difficult to manage the economics of such a system. Fortunately, I don't think many physicians will want to practice that way and so my hope is that this concern does not become a significant issue down the road."

3. Dan Mendelson, CEO of Avalere Health, a healthcare advisory firm based in Washington, D.C.:

"The new rule is an easier pill to swallow, but still difficult for most systems to fully digest. ACOs will get to keep more of the upside profits from effective cost control – including savings from reduced re-hospitalizations – and there are fewer quality metrics and many of the industry's legal concerns appear to have been addressed.  But fundamentally, most health systems continue to struggle with the fact that their present operations are oriented toward billing per service, and not taking on risk and responsibility for quality."

Mendelson noted that while ACOs are designed to reduce healthcare costs by improving care coordination, only 5% of the 33 quality measures in the final rule address care coordination.

Jonathan Blum, director of Medicare for the Centers for Medicare & Medicaid Services, was an Avalere vice president prior to his CMS appointment in 2009.

4. George Roman, senior director for health policy, American Medical Group Association:

"There are three other guidance documents issued from the DoJ, the IRS, and the FTC that have to do with assurances, safe harbors, and waivers about anti-trust concerns, anti-kickbacks, and civil money penalties. These are, in fairness, not in the purview of the Centers for Medicare & Medicaid Services, so it has yet to be determined whether these will dovetail adequately.

"If I was a CEO of a large medial enterprise and I didn't have reasonable assurance they weren't going to put handcuffs on me and that was not offered in the preliminary documents, in my view, I would certainly seek to get those assurances or I wouldn't proceed. The devil is in the details. I'm hopeful they will be flexible that these signs and concessions hold true throughout. We want this model to succeed.

5. Neil Kirschner, Senior associate with regulatory and insurer affairs with the American College of Physicians:

"CMS went as far as it could to make the ACO as attractive as possible for physician participation. I can't remember a time when CMS has been so responsive.

The risk-free track, elimination of the electronic health record requirement, the first dollar payment after the lower cost threshold is reached, "and the change from retrospective to prospective assignment make it easier for ACOs to keep track of how they're doing and better respond to the needs of their patients.

"These changes, will make it more likely providers will consider forming an ACO, and I believe more actually will, but you have to remember that this is not for the feint of heart; There is still a great deal of capital and infrastructure requirement."

6. Nathan Kaufman, president of Kaufman Strategic Advisers LLC:

"From an actuarial standpoint you need more than 10,000 lives, huge infrastructure, patients can still go wherever they want and the ultimate savings will come out of the pockets of specialists and hospitals. So why is this good? The best thing that could happen to a hospital or health system would be that your competitor developed an ACO."

7. Linda Fishman, senior vice president of public policy for the American Hospital Association:

(Asked if ACOs will go away if the Affordable Care Act is repealed) "The whole concept of accountable care, we believe, is here to stay. Whether the Medicare program participates in it or not, we have a number of hospitals across the country who have entered into ACO-like arrangements with private payers. So I do think the direction the healthcare system is moving is certainly toward accountable care....

"(But) if the Supercommittee (Joint Select Committee on Deficit Reduction) or efforts beyond the Supercommittee to achieve deficit reduction occur in the next several years, and choose to reduce market basket updates to providers, those are significant factors that would have to be figured into how you participate in the ACO.

8. Paul Keckley, executive director of the Deloitte Center for Health Solutions:

"They heard from medical groups – that we could do a lot of this if you made this one-side model a little more attractive – we're not interested in the two-side model – and if you let us focus on a few populations that we can manage instead of populations like the frail elderly, where you're requiring us to have the hospital sit at the table with us.

"If there's a subtlety here from CMS, it's that they sent a message that they're focused on care coordination that's physician-driven.

"They are focused on roles that hospitals or plans could play. But the ACO is largely about how doctors manage care. Period. How they clinically integrate, share risk, and manage care. And as you know, there aren't many communities where doctors work together so well. That's going to be the fun part of this."

"I'm imaging how Don [Berwick, CMS administrator] and Marilyn [Tavenner, Berwick's principal deputy] have been working on this and my sense is that there really was an effort to put a face on CMS as a 'listener.' "

9. Peter Carmel, MD, president of the American Medical Association: "The AMA asked for ACOs to report on a lower number of quality measures that were most relevant to their patient populations and for removal of the measures associated with hospital-acquired conditions. The final rule reduces the number of required measures by half, including removal of the HAC measures, but the AMA would have preferred even greater flexibility on which measures practices are required to report.

10. Joseph Kvedar, MD, founder and director of the Center for Connected Health:

On the elimination of the requirement that 50% of the physicians in an ACO qualify for electronic health record meaningful use," I don't necessarily think that's a bad idea because I can't imagine anyone [creating an ACO] without an EHR.

"What's being required of us to be an accountable care organization is a tremendous level of coordination. And God knows we'll need many more technologies than just EMRs. That's the baseline. So in a way it makes sense for them not to have to prescribe that. If we're stupid enough to try without it, then let the chips fall where they may."

See Also:
ACOs Seen As Tough Sell, Despite Concessions
ACO Alerts: Antitrust & Exempt-Status Implications