Aurora Health Balks at ACOs Under Proposed Rules

Aurora Health Care President/CEO Nick Turkal, MD, says the Milwaukee-based healthcare system will not take part in the federal government's Accountable Care Organization pilot projects unless significant changes are made to the proposed rules.

Turkal told HealthLeaders Media that the proposed rules issued last month by the Centers for Medicare & Medicaid Services create a program where risks outweigh rewards.

"We had been very excited about the concept of ACO and Aurora has been designed around the concept of accountable care. But the pilot as designed by CMS doesn't match with what we expected and I don't think it matches with what a lot of providers expected across the country," Turkal said.

The Aurora Health chief joins a growing chorus of healthcare providers who are raising concerns about key components of the proposed rules, and says he plans to send a letter to CMS before the end of the comment period, pointing out his concerns and providing a list of recommendations.

Turkal said he believes the concerns he has for the ACO proposed rules are widely shared by other healthcare providers, particularly the capitation schedule that puts ACOs at risk in the third year.

"If you look at the end game, what are we trying to accomplish with an ACO pilot? I think what we are asking is 'is the model that is out there now going to get us there?'" he explained. "We think the answer may be 'no,' that it is designed in a way that moves a little too quickly towards capitation for many markets, and that has a quite rigid approach to quality and efficiency."

"If you move too many markets too quickly to capitation, then you haven't allowed the time for adjustment for patients, for physicians, for hospitals, to make that move in a way that doesn't impair quality or service to patients, or become just a huge financial burden," he continued.

Turkal says the anti-monopoly provisions put forward by the Department of Justice also could prove to be overly burdensome for integrated care systems like Aurora. "There is a regulatory review by market and it is broadly defined. If you have more than 50% of any market you have to go through a regulatory process for approval of a pilot," he says. "In a case like ours, where we are an integrated delivery system, anything where we exceed 50% would mean a review in that market. For example, if we have the predominant home care agency in a rural market we immediately have to go through a regulatory hurdle, even though the pilot wouldn't necessarily change our market share at all because we may be the only provider. So, it created a regulatory hurdle that seems to be pretty complicated for those of us who span several different markets. In our case it would require regulatory reviews in virtually all our markets."

Chris Van Gorder, President and CEO, Scripps Health, said in an interview with HealthLeaders Media shortly after the proposed rules were released, "Frankly, I was surprised. I thought there would be more carrots, not so much stick." His reaction, and that of his peers at other hospitals and health systems is in this report.

Turkal also expressed widely held concerns about the retroactive assignment of patients to ACOs after the first year, and the potential problems with data sharing, including the right of patients to limit access to personal health data. "I'm not sure it gives us the flexibility to work with our patients in a way that will make it successful," he says.

Turkal says CMS' willingness to make fundamental changes to the proposed rules could determine whether or not the ACO model success.

"The fundamental issue is if CMS has proposed a model which is not going to work," he says. "After the June 6 [end to the] public comment period, are they fundamentally going to change the model or is it going to be just some minor adjustments around the edges? The real answer is that without some fundamental change in CMS' current proposed model, there are not going to be many takers."

"If you were interviewing people 10 years ago and now, the difference now is those of us in healthcare are ready for change and we want to make it work. But the end goal has to be around enhanced care at a lower cost," he says. "We don't believe this is designed in a way that is necessarily going to get people there in an effective way. As it stands now we would not participate. We are hopeful that CMS and DOJ as they receive comments will morph this into something more useable."

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.