Some osteopathic physicians and physician groups say they are not interested in participating in Medicare’s accountable care organization (ACO) program because of its financial risks, administrative burdens and other problems.
“Everything in this proposal focuses on money savings for the federal Centers for Medicare and Medicaid Services and puts the majority of the risk on physicians,” says Paul A. Martin, DO, who serves the AOA Joint Committee on Quality and Payment, which is formulating the AOA’s response to the proposed ACO rule. “Physicians are not going to go for this.”
CMS aims to improve patient care and lower care costs by encouraging physicians, hospitals and other caregivers to collaborate in networks called accountable care organizations. With this new model of care, which was called for in the Patient Protection and Affordable Care Act of 2010, CMS predicts it can save up to nearly $1 billion in the program’s first three years.
“For too long, it has been too difficult for health care providers to work together to coordinate and improve the care their patients receive,” said U.S. Health and Human Services Secretary Kathleen Sebelius in introducing the proposal on March 31. “That has real consequences: Patients have gaps in their care, receive duplicative care or are at increased risk of suffering from medical mistakes.”
For their part, physicians and hospitals can earn extra money by banding together in an ACO. HHS explained in a news release, “If ACOs save money by getting beneficiaries the right care at the right time–for example, by improving access to primary care so that patients can avoid a trip to the emergency room–the ACO can share in those savings with Medicare.”
To earn shared savings rewards, ACOs will have to meet a minimum savings rate benchmark—the proposal calls for savings of at least 2%—and comply with 65 quality measures in five areas of patient care. Should an ACO fail to meet one of the quality metrics, however, it forfeits all savings.
“Requiring physicians to meet and track 65 patient-care quality measures is draconian,” says Dr. Martin, who is the president-elect of the American College of Osteopathic Family Physicians. “Also, the cost to develop software to follow and compile registries on each of these quality standards averages $30,000 apiece. Because 60 of these measures are brand new, you’re talking about $2 million just in software changes for appropriate data sets to send to CMS.”
Under the rule, an ACO would sign on for three years and choose one of two payment programs. The first, less risky option allows an ACO to recoup up to 50% of its savings in the first two years, with no responsibility for losses above the expenditure target during that time. ACOs on this track will pay back any shared loses during the third year, as well as in subsequent agreement years. An ACO following the second plan risks penalties each year but can earn back up to 60% of its savings.
In both plans, CMS will withhold 25% of an ACO’s shared savings to offset potential losses.
The AOA’s director of government relations, Shawn Martin, believes the financial hurdles and administrative complexity have made many physicians balk at the program.
“Reaction to the proposed rule has really been quite negative,” Martin said during the AOA’s May 12 online town hall meeting, “especially from those entities that one would assume are well-positioned to benefit from [an ACO] arrangement.”
Martin said that physicians are finding the rule “overly cumbersome” and the quality goals unobtainable, even for large group practices. “The general assessment is that the incentives are misaligned with the potential for savings.”
On May 11, the American Medical Group Association, a physician advocacy group that represents more than 67,000 physicians in 300 multispecialty practices, released a survey in which 93% of its members said they would not join an ACO “under the current regulatory framework.” In a letter to CMS, AMGA President and CEO Donald W. Fisher, PhD, wrote that the agency’s rule “is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.”