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Family Docs Cautiously Optimistic About ACO Regs

 |  By jcantlupe@healthleadersmedia.com  
   April 07, 2011

The government's ACO bus has finally arrived. Its 429 pages of proposed guidelines having spilled out, all of healthcare is now scampering to read the lines and between them.

Under the accountable care organization model, there are many participants. But whether there will be enough room for physicians to participate to their liking, or whether ACO is a new form of HMO are a couple of the many questions in the great debate surrounding the release of the proposed rules.

Overall, there are mixed reviews on the Centers for Medicare & Medicaid Services proposed rule proposed ACO regulations released last week.

Donald Berwick, the CMS administrator, and Kathleen Sibelius, the head of the HHS, say the model could save millions of dollars in Medicare funds and improve care for Medicare patients, and that they shouldn't be equated with HMOs, not at all.

Along with the shadow of the HMOs – seriously, the critics whisper HMOs all the time, and sometimes mention "HMOs on steroids" – what's in store for physicians?

Roland Goertz, MD, MBA, FAAFP, president of the board of directors of the American Academy of Family Physicians, recalls being a VP of medical affairs at an integrated system years ago and recalls when managed care was moving "full steam ahead" in the 1980s and 1990s, and "some of the factors that drove it were similar to today."

HMOs are not ACOS, no way, he says, but healthcare needs to fix cost as a driving force in the care delivery model, with physicians in the mix.

Like most other physician groups, the American Academy of Family Physicians is studying the proposed CMS regulations regarding ACOs. While there are some areas of concern that have been addressed, others have not yet been determined, Goertz says.

Moreover, the group is urging its physician members to evaluate the potential for ACOs for physician groups to set up their own practices within them. Goertz acknowledges, however, the AAFP leadership is extremely "cautious" because of anti-trust regulations. The ACCFP membership includes 65,000 family physicians, roughly 84% of all family practioners in the country. About half its members are in small or medium-size practices.

"We are very keen in trying to urge physicians to set themselves up to form ACOs, so that the only ACO model is not driven by hospitals; not that that's bad, but we think should be; urging our members consider in a regionalized way forming either IPAs (independent practice association) or optional formats that the rules would allow," Goertz says. "Physician groups might structure themselves to also be an ACO. We hope that indeed happens.

 "We do believe and we have said a strong primary care basis is going to be very important for an ACO to function," he says. "The patient-centered medical home in the neighborhood of other specialists and other elements of healthcare delivery is one of the only models of healthcare reformation that offers an option with provable demonstration projects that bend the cost curve while maintaining quality and good patient care."

As the academy sees it, however, solo and small practioners not only enable participation in the ACOs, but also have the option for an "opt out," Goertz says.

"We had some real concerns about how the rules would be written in restricting participation of solo practioners or small group practices within an ACO," Goertz says. "It appears the use rules do allow participation, and indeed, do allow an opt-out, if indeed a practice decides they'd just rather stay traditional. How long that would be allowed, I'm not sure. That's part of some of the questions that we will ask."

"The other thing that we had concerns about, and will continue to have concerns [about]– but appears to be addressed, [is that] there is a required physician-directed quality assurance and improvement process built within any proposed AMO format. Embedded within that set of rules is a 75% ACO leadership or governance being represented by clinical or administrative physicians," Goertz said. "We think a lot of physician organizations were concerned that this ACO formation might be viewed by less healthcare oriented businesses as an opportunity for less healthcare minded entities to get into the fray, to set up governances and structures that weren't necessarily going to be patient-focused and care-driven. We are pleased with those aspects.

However, Goertz says there is a "two-edged sword" in the formation of the ACOs as outlined by CMS, although targeting improved patient care and efficiency outcomes, "has a bit of variability" that still needs to be determined through a stricter set of guidelines. "Without a more restricted set of guidelines you are going to have a bit of variability that is going to have to be tolerated for awhile," he says.

Another major area of concern for physicians involves in the formation of ACOs, in capital requirements and anti-trust issues, outlined in the HHS document as well as a proposed ACO anti-trust enforcement policy from the Department of Justice and the Federal Trade Commission.

"Significant barriers" must be addressed, Jeremy A. Lazarus, MD, speaker for the American Medical Association House of Delegates, said in a statement following release of the proposed rule, including the large capital requirements to fund an ACO and make required changes.

The capital requirements for ACOs might be too high for many physicians. In a December, 2009 letter to Berwick, the AMA's executive vice president, Michael D. Maves, MD, MBA, wrote that the CMS should only establish requirements for ACOs that require large capital investments if it provides a financing mechanism to enable physician practices to make those investments.

Maves suggested that the government create loan, loan guarantee,  and technical assistance programs to help small physician practices make the investments needed to become ACOs. Taking those actions "will significantly reduce the need for upfront investment, as well as reduce risks and delays in recouping those investments," Maves wrote.

Taking the actions above will significantly reduce the need for upfront investment, as well as reduce risks and delays in recouping those investments, according to Maves. 

As for anti-trust issues, the AMA suggested that the government should create explicit safe-harbors from antitrust enforcement and waivers of the civil monetary penalty statute "so that small, independent physician practices can work with each other and collaborate with hospitals and other providers to deliver coordinated care for both Medicare beneficiaries and commercially-insured patients."

Kester Freeman, former CEO, Palmetto Health, wrote in a blog, after the HHS released the proposed ACO rules, "While steps are being taken to avoid antitrust issues, I feel all of these details need to be resolved ahead of time so that hospitals and physician groups can feel confident they can collaborate freely," he says. "The antitrust regulations need to be in place before January 2012 so there is clarity for all involved."

Indeed, the anti-trust issues and complex, making his organization tentative, at best, about the steps ahead, says Goertz.

"The previous model of healthcare arrangement, unfortunately, did not foster organizations of physicians getting together in the same way other organizations in healthcare would get together because of anti-trust rules," Goertz says. "This is one of the rules we are looking at very closely. We are very careful not stepping over the line right now."

"We are in favor of not having in the future a solely fee-for-service payment; we are advocating a blended payment," says Goertz. "We believe ACOs will have to move in that direction. But we have concerns that if we put specifics of a blended model, we would be accused of antitrust activities, in urging all our members to contract this way or that way."

"There are a lot of restrictions we need to sort out to see if there is some leeway, without harming free trade – and at the same time (giving) family physicians their best options."

"I am," he says, "cautious."

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Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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