Over-Burdensome and Under-Rewarding: ACCC Says Whoa to ACO Proposed Rule

by Sydney Abbott, JD, Policy Coordinator, ACCC

ACCC submitted comments on the Centers for Medicare & Medicaid Services’ (CMS’s) proposed rule for Accountable Care Organizations (ACOs) last week.

In brief, CMS has lots of work to do to address a number of significant concerns.

First, oncologists and other specialists may not receive credit in the form of shared savings payments for patients for whom they provide necessary services. Here’s why: Patients can receive care from any provider they want –in any ACO or from a physician not in an ACO. However, patients will be retroactively assigned to an ACO based on the primary care physician from whom they received a plurality of services, even if they received most of their primary care services from a specialist. That leaves specialists such as oncologists at a disadvantage, potentially not receiving their shared savings payment.

This doesn’t make much sense to us.

What also doesn’t make sense is that, as proposed, oncologists and other specialist providers are left out of the decision making arrangement of the ACO. ACCC called for specialists to be included in the leadership and management structures of ACOs, which is particularly important since ACO leadership will have the authority to make important decisions, such as disbursement arrangements for shared savings. Also important is the creation of oncology-centered ACOs, which we recommended.

Lastly, we pointed out clear barriers to ACO participation, including the high cost of entry, the demanding nature of reporting requirements, and insufficient upper-performance payment limits for shared savings. ACCC believes such barriers will significantly discourage participation by our members. CMS estimates the average start-up costs and first year operating expenses will reach $1.7 million for each ACO. This may be incredibly optimistic as other recent studies estimate initial costs between $11.6 and $26.1 million, depending on the size and location of the ACO.

Another important cost-related barrier to entry is the assumption of two-sided risk by every ACO participant during the first three-year cycle. This means that despite the significant start-up costs, oncologists and other providers will be required to make payments back to CMS for not meeting set benchmarks. And providers will not even know what these benchmarks are until after the reporting period is complete, thanks to the proposed retroactive attribution. Even assuming all the benchmarks are met—achieving higher quality care at lower cost—the shared savings program will withhold half of the savings earned in anticipation of future losses.

It’s like CMS is expecting ACOs to fail.

ACCC looks forward to supporting ACO rules that reduce the cost of care and improve quality, but these rules must encourage participation by all providers. ACCC believes the ACO model holds promise, but, as reflected in our comments, the proposed rule has yet to fully tap into the potential of ACOs. We will keep you updated when the final rule is released later this summer.

One Response

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  1. […] to the law, is that patients are not “locked in” to any physician or system and can go to any provider they want for care, seemingly making cost containment difficult.  Therefore, it’s clear an ACO is not an […]

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