Senators Urge White House to Withdraw ACO Proposal

The Centers for Medicare & Medicaid Services should withdraw its proposed rules governing accountable care organizations in part because of expensive start-up costs required, seven Republican lawmakers said in a letter to the Obama Administration Tuesday.

"We have been struck by the increasingly diverse chorus of concerns many of our nation's leading healthcare institutions have raised in recent days about the proposed ACO regulation," says the letter, which is signed by Tom Coburn, MD, (R –OK); Mike Crapo (R-ID); John Cornyn (R-TX); Jon Kyl (R-AZ); Mike Enzi (R-WY); Pat Roberts (R-KS); and Richard Burr (R-NC). 

It's not just high costs, the Senators said. "Incentives and accountability are misaligned. Detailed requirements are complex and return on investment is uncertain."

"Innovative integrated health providers such as the Billings Clinic, Intermountain Healthcare, the Cleveland Clinic, the Mayo Clinic, Sutter Health, Marshfield Clinic have expressed serious concerns with the details of the proposed rule." Even all 10 members of the Physician Group Practice CMS demonstration project have expressed "serious reservations," the senators wrote.

"It is troubling that their participation is doubtful, since these PGP members and experience are cited more than 75 times in your Agency's 400+ page proposed rule as a model for the ACO regulation."

The May 24 letter was addressed to U.S. Department of Health and Human Service Secretary Kathleen Sebelius and CMS Administrator Donald Berwick, MD. HHS did not immediately issue a response.

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.

The Senators said they "look forward to the Department redesigning a regulation that will truly help accomplish our shared goals for patients, providers and taxpayers alike: better care at lower costs."

CMS is accepting comments on the proposed rule, which was authorized under Section 3022 of the Patient Protection and Affordable Care Act, through June 6 at here.

See Also:
REPORT: Leaders Respond to Proposed ACO Regs
ACO or Not, Fairview Builds Shared Savings into All Payer Contracts
To Be An ACO, Or Not To Be
Are ACOs Unaffordable?
Roundup: ACO Proposed Rules Fuel Uncertainty