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AMGA Raises Red Flag on 'Burdensome' ACO Rules

 |  By John Commins  
   May 13, 2011

The American Medical Group Association warned this week that proposed rules governing accountable care organizations are "overly prescriptive" and "too burdensome," and will discourage physician participation.

In a letter to Centers for Medicare and Medicaid Services Administrator Donald Berwick, MD, AMGA President/CEO Donald W. Fisher warned that a survey of its members found that 93% would not enroll as an ACO under the proposed regulations.

According to the HealthLeaders Media Industry Survey 2011, more than half, (52%) of physicians surveyed said they expect to be part of an ACO within the next five years. That survey, however, was completed months before the proposed rules were released in April.

"Our membership's concerns were many and focused on issues such as the risk sharing requirement, static risk adjustment, retrospective attribution, quality measurement requirements, the Minimum Savings requirements and others," Fisher said in the letter. "Without substantial changes in the Final Rule, we fear that very few providers will enroll as ACOs and that CMS and the provider community will miss the best opportunity to inject value and accountability into the delivery system."

In an interview Thursday with HealthLeaders Media, Fisher said AMGA would provide a detailed critique of the proposed rules and a list of recommendations before the end of the public comment period on June 6. "We just sent this letter because we wanted to make sure that CMS was aware of the significant changes that need to be made, and let them know how serious these problems are. We didn't want to wait until the process had already started," he said.

Fisher detailed a list of concerns that AMGA would address in its formal comments.

Risk Adjustment: "We're concerned that CMS intends on adjusting the risks on ACOs costs calculations only for the first year, and these are three year agreements. Most of my members are very worried that they are going to get adversely selected against by frail and ill patients because the word will get out that these are high quality low cost organizations that do a terrific job taking care of patients. If you don't adjust after the first year and get an influx of patients that are much more severely ill than the first estimates gives, you are going to be risk adjusted incorrectly."

ACO Patient Attribution: "The attribution model that CMS is proposing is retrospective. They are going to do a look-back over three years to count the plurality of primary care visits to a facility. Whoever has the most gets that patient. They aren't going to have that until after the first year. So you are going to have to gear up to be an ACO, you are going to have to make an investment in the infrastructure, and you are not going to know who your patients are until after that first year. And, given that there is a 5,000 Medicare beneficiary minimum by statute, you might do all of these investments and find out you don't hit the 5,000 Medicare beneficiary threshold and you are out of the program. We would like to see them do a prospective patient attribution. Let's have these ACOs know who their patients are when they begin so they can make sure those patients are getting the care they need to improve quality and lower costs."

Minimum Savings Requirements: "If you go back to the group practice demonstration, which was 10 medical groups over five years, they had a 2% minimum savings to meet before they got into the shared savings program. In the proposed ACO regulations they have taken that 2% and raised it to 3.9%. If you talk to most of the medical groups who participated in the group practice demo, they had a difficult time getting to 2% over a five-year window. Many of them invested a lot more money than they ever got back. So when you take this up to 3.9% you are requiring a huge hurdle to be overcome by these medical groups financially before they get into the shared savings."

AMGA is the latest in a line of professional provider organizations that has raised concerns about the proposed rules for ACOs. Earlier this week, the College of Healthcare Information Management Executives complained that the ability of patients in accountable care organizations to restrict access to their personal health information is one of several huge hurdles.

In April, a slate of health leaders including the CEOs of Scripps Health, Alegent Health, Kaiser Foundation Hospitals, and Dean Health Systems weighed in with their responses to CMS' proposed regulations.

In its letter to Berwick, CHIME called for a re-examination of several sections of the proposed rules that it said would create significant pressures on ACOs.

Fisher told HealthLeaders Media that he is disappointed that CMS didn't use the lessons learned from the group practice demonstration project. "These requirements to become an ACO are much more stringent that what the group practice folks had to go through, and at the end of their five-year period they were able to demonstrate that they improved outcomes and saved money," Fisher said. "Why would you want to raise the bar even higher for the next level of participants in this experiment. The 2% minimum savings was the maximum for the group practice demo folks. Now we have raised it to 3.9%. They did have retrospective attribution and that was a real problem for them and they complained. We were hoping CMS would fix it, but they didn't."

Fisher said AMGA hopes to work with CMS to revise the rules, but AMGA is also prepared to go to Congress to ask for help if CMS is unwilling or unable to amend the rules. "This is the real opportunity in the Affordable Care Act to reform the healthcare delivery in this country. We want to see it work," he said.

 
See Also:

Leaders Respond to CMS' Proposed ACO Regulations
The Leap to Accountable Care Organizations
The Bridge to Accountable Care Organizations

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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