Medicare ACO plan still needs work, AMA says

The Association asks CMS to offer more incentive tracks and shared savings opportunities that will encourage physician participation.

By Charles Fiegl amednews staff — Posted June 13, 2011

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Significant changes must be made to Medicare's accountable care organization proposal before the Centers for Medicare & Medicaid Services can finalize the shared savings plan, the American Medical Association stated in comments on the proposal June 3.

"A well-developed ACO model has the potential to improve care coordination and quality while promoting cost savings, and to help ensure success the AMA has asked CMS to make numerous revisions and to issue an interim final rule that allows the flexibility to adapt as needed," AMA President Cecil B. Wilson, MD, said in a statement accompanying the 31-page comment letter.

The ACO payment model aims to improve care, keep patients healthy, and allow doctors and hospitals to share in the savings generated to the Medicare program. The national health system reform law authorized the creation of the ACO program. CMS released its ACO proposed rule on March 31 and accepted comments from scores of stakeholders before the June 6 deadline.

The AMA urged CMS to refrain from immediately finalizing its ACO proposal and offered several suggestions on how to improve the payment model in the letter signed by Executive Vice President and CEO Michael D. Maves, MD, MBA.

"Since this is a completely new Medicare delivery and payment model, the AMA urges CMS to issue an interim final rule, rather than a final rule, so that CMS maintains the flexibility to modify and improve the ACO regulations as the agency learns more about this model," Dr. Maves said.

Several other physician organizations also urged CMS to make revisions to its proposal. One common request was for ACOs to have an option to participate without being exposed to financial penalties for failing to save Medicare enough money. The proposed rule outlined two payment tracks under which physicians could receive bonuses for three years. One track has smaller potential bonuses but would expose an ACO to downside risk only during the final year, while the second track is potentially more lucrative but carries three years of risk for the ACO.

The Medical Group Management Assn. argued that the loss-sharing was not part of the Medicare physician group practice demonstration, which pilot-tested a shared savings program in advance of Congress authorizing the ACO program. MGMA questioned the policy rationale and legal authority behind including the penalties.

"We think that Congress intended only a shared savings program, and urge CMS, at a minimum, to eliminate the third-year loss-sharing requirement from the 'one-sided' model," MGMA President and CEO William F. Jessee, MD, wrote in a comment letter to CMS.

CMS also should offer more types of payment models in the shared savings program, the AMA said. Such models could include partial capitation and patient-centered medical homes.

The proposed ACO rule would allow smaller ACOs, or those with fewer than 10,000 assigned patients, to share in any savings realized by the Medicare program. Larger ACOs would receive bonuses only after hitting a 2% savings threshold.

The AMA urged CMS to retain the first-dollar incentive concept for smaller groups, and to ensure that these groups would not risk being penalized for failing to generate savings. Larger groups also should share in more savings to the Medicare program, including first-dollar savings, the Association said.

The AMA also encouraged CMS to expand its coverage of services to support the quality and efficiency goals of the ACO program. For instance, Medicare could add telephone consultations to its list of covered services.

Outliers in an ACO patient base could jeopardize an organization's ability to produce savings, the AMA said. ACOs would have some patients with unusual medical conditions who could require hundreds of thousands of dollars in care despite the organizations' best efforts. The Association urged CMS to provide cost-sharing protections by excluding costs of care for such outlier patients.

Under the proposed rule, patients under a participating physician's care would be grouped into the doctor's ACO. Physicians would notify patients at the point of care, and patients would retain the option to see non-ACO doctors if they choose. The American Academy of Family Physicians requested that CMS consider encouraging patients receiving care in a Medicare ACO to select a primary care physician prospectively.

"We urge CMS to consider this as a resolution to the problem that, as currently proposed, primary care physicians could only participate in one Medicare ACO," AAFP Board Chair Lori Heim, MD, wrote in a comment letter.

Seeking larger safe harbors

The AMA also submitted separate comments on policies drafted by the Dept. of Justice and Federal Trade Commission on May 26. The federal agencies would allow physicians to form accountable care organizations without violating federal antitrust laws.

The AMA supports proposals that would create a safety zone for ACO groups, but it requested that the agencies raise the maximum threshold of the zone to 40%, from 30%, of a local market share. The government would consider organizations within the zone to be unlikely to raise antitrust concerns.

The Association also supports a 90-day review for ACOs requiring approval from the federal agencies, but it requested the threshold for triggering a review be raised to 60%, instead of 50%, of a local market share.

"As proposed, the FTC and DOJ policy on ACOs simply does not go far enough to level the playing field, leaving small physician practices at a disadvantage compared to hospitals and dominant insurance companies," Dr. Wilson said.

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Groups weigh in on ACOs

Associations representing organized medicine and the health care industry submitted comments on the Obama administration's Medicare accountable care organization proposal. Here are some of them.

"ACOs [should] have the opportunity to review and verify the data CMS uses in developing performance standard scores before this data is required to be made public."
--The American College of Physicians, on the issue of ACO performance scores.

"[The] number of initial quality measures is ... onerous and operationally unrealistic. [T]he physician quality reporting system requires three measures, and the response to that program has not been overwhelming."
--The American Academy of Family Physicians, on a requirement for ACOs to report on 65 quality measures.

"Specifically, for a small ACO, costs were estimated to be $11.6 million and for a medium ACO to be $26.1 million."
--The American Hospital Assn., on a CMS projection that the average ACO startup cost would be $1.8 million.

"We urge CMS to ... think more broadly about the role that plans can play in partnering with CMS to achieve its objectives."
--America's Health Insurance Plans, on the concept of building on private ACO models.

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