Originally published in Atlanta Hospital News
One of the many ways in which the Patient Protection and Affordable Care Act ("PPACA") seeks to transform the delivery of healthcare, is through the creation of Accountable Care Organizations ("ACOs"). Through ACOs, doctors and hospitals would work together to coordinate and deliver care more efficiently. On November 17, 2010, the Centers for Medicare & Medicaid Services ("CMS") announced a request for information ("RFI"), particularly from the physician community, on certain policies and standards that will apply to ACOs participating in either the Medicare Shared Savings Program or CMS's Center for Medicare and Medicaid Innovation ("CMMI"). 75 Fed. Reg. 70165 (November 17, 2010). PPACA authorizes CMMI to test new payment and delivery system models like ACOs.
Several groups, including the American Hospital Association ("AHA"), have already weighed in on the policies and procedures that should apply to ACOs. While not in response to CMS's November 17, 2010 RFI, AHA, on the same day, issued its letter to Jonathan D. Blum, Deputy Administrator of CMS. In its letter, the AHA stated that the goal of ACOs must be delivery reform that improves quality, efficiency and the patient experience and cautioned that the need to generate Medicare program savings should not override this type of healthcare reform. AHA states that ACOs should be flexible and that the program should be started slowly, while allowing for mid-course change in the administrative requirements and methodologies, if needed.
AHA also urged that initially, the quality measures of ACOs should focus on a small core measure set. The AHA expressed particular concern over healthcare delivery reform in rural areas and that the statutory requirements for ACOs limit the ability of rural providers to participate in the Shared Savings Program. Additionally, the AHA noted the competing goals of maintaining beneficiary choice and care coordination through ACOs. In that regard, of specific concern to the AHA, is that there are not incentives for beneficiaries to stay within the ACO network. Such a model creates difficulty in implementing greater care coordination.
In addition to the AHA, the American Medical Association ("AMA") has also submitted comments to CMS on the development and implementation of ACOs. On November 11, 2010, prior to CMS's November 17, 2010 RFI, the AMA adopted new principals for ACOs. The AMA principals state that the ACOs be physician-led, place patients' interests first, and that the collaborative arrangements among physicians, hospitals and others ensure that physicians control medical issues. Additionally, contrary to the PPACA, which requires Medicare fee-for-service beneficiaries to be assigned to an ACO, the AMA states that patient participation in an ACO should be voluntary rather than a mandatory assignment by Medicare.
Regarding the financial aspects of ACOs, the AMA principals state that ACO revenues should be retained for patient care services and distributed to the ACO participants and that CMMI should provide grants and other forms of up front financial assistance to assist physicians in forming ACOs. The AMA policies also note that in order to allow physician collaboration with hospitals in creating ACOs, antitrust laws and patient self-referral laws must be made flexible enough to allow this collaboration without requiring that physicians become employees of hospitals or ACOs. Further, the AMA policies urge that the ACO spending benchmark be adjusted for differences in geographic practice costs and risk adjusted for individual patient risk factors. The AMA also advises that ACOs should be allowed to use different payment models including fee-for-service, capitation, partial capitation, medical homes, care management fees, and shared savings.
According to CMS officials, the regulations on ACOs are expected to be released by mid-January, 2011. Once issued, providers should carefully review the ACO regulations as they evaluate whether to participate in an ACO in the coming years.
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