Senators Urge White House to Withdraw ACO Proposal

The senators said that in principle, the ACO concept holds promise and said coordination and collaboration among providers and beneficiaries is undoubtedly a worthwhile goal.

"However it is increasingly clear this proposed rule misses the target."

A key disincentive, the letter adds, is an estimate in a report from the American Hospital Association that ACO start-up costs "will likely be at least 10 times higher than the estimated costs cited in the proposed rule."

The AHA report, released May 13, said "costs of the necessary elements to successfully manage the care of a defined population is considerably higher – $11.6 to $26.1 million – than the $1.8 million estimated by the Centers for Medicare & Medicaid Services (CMS) in its proposed rule for start-up and one year of ongoing operations." 

The AHA pointed to 23 capabilities that must be developed to achieve the transformation to an ACO including network development and management, care coordination, quality improvement and utilization management, clinical information systems and data analytics.