Trade Groups React to Proposed ACO Regs

The accountable care organizations (ACO) rule published March 31 has drawn comments from key industry groups:

• The Academy Advisors: Tuesday, its 17 health system CEOs sent a letter to the Centers for Medicare & Medicaid Services (CMS) Administrator Don Berwick recommending five changes to the rule to simplify and lower the costs of participation in the ACA Section 3022 Shared Savings Program.
• College of Healthcare Information Management Executives (CHIME): in its May 10 letter, CHIME urged CMS to disallow Medicare enrollee opt-out for sharing of their data because it would undermine efforts to coordinate care for seniors. In the current rule, an ACO is required to provide a form to enrollees allowing them to opt out.
• American Medical Association (AMA): in its letter to CMS May 26, the primary concerns are the methodology for determining the Primary Service Area (PSA) and enforcement of the anti-trust oversight provisions. It encouraged increasing the safety zone threshold from 30 to 40 percent. It also seeks clarification of financial integration issues involving physicians and hospitals, and assurance that physicians are not at a disadvantage in forming ACOs in communities where hospitals are consolidating physicians: “Physicians should not have to become employed by a hospital or sell their practice to a hospital in order to participate in ACOs or other innovative delivery models.”
• America’s Health Insurance Plans (AHIP): in its letter, AHIP requested the safety zone be decreased from 30 to 20 percent so as to preclude provider consolidation and anti-competitive behaviors. And in its letter, it requested that regulations be created that preclude an ACO from cost shifting operating costs for the ACO to commercial plans.

But reactions to the Pioneer ACO are more positive to date: announced May 16, Pioneer ACOs allow prospective assignment of Medicare enrollees to the ACO, partial capitation and bigger shared savings bonuses than the two-sided ACO model, and do not carry a downside risk associated with cost benchmarks. Provider organizations with more experience in risk-based contracting might be attracted to the Pioneer ACO model which has a minimum savings rate of one percent (vs. 2 to 3.9 percent for ACOs) and upside of between 50 and 75 percent of savings (vs. 50 to 60 percent for ACOs).