ACOs Seen As Tough Sell, Despite Concessions

John Commins, October 24, 2011

Even with approving nods for the changes announced last week in the final rules for Medicare accountable care organizations, observers who spoke with HealthLeaders Media say the program will remain a tough sell for most healthcare providers.

"I'm still not optimistic we are going to see a rush to the ACO door," said Michael Regier, general counsel and senior vice president of legal and corporate affairs for VHA Inc., the hospital purchasing group. "For organizations that today are not quite far along the clinical integration route there is still an enormous investment required in infrastructure. Even with the improvement in rules, I don't know that the opportunity for return of capital is going to be sufficient enough to entice folks into this care model."


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Nathan Kaufman, managing director of San Diego, CA-based Kaufman Strategic Advisors, LLC, is blunt. "My advice is to be a fast follower. Let somebody else do this," he says. "If they figure out how to make it work, these people will quit their jobs and become consultants and you can learn quickly from them how to do it."

On Thursday, the Centers for Medicare & Medicaid Services issued the long-awaited final rule for ACOs under the Medicare Shared Savings Program. After facing a barrage of criticism last spring when the proposed rules were made public, CMS backed down on several key points in the final product.

For example, CMS reduced from 65 to 33 the number of performance measures that providers would have to meet, removed the electronic health records requirement, eliminated financial risk for some providers, and switched from retrospective to prospective identification of the ACO patient population.  

John Kelly, MD, managing director of Chicago-based Huron Healthcare, says that still won't be enough to lure many providers off the sidelines.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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