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The DO | Your Practice | Rules and Regulations

Physicians rebuff Medicare’s new accountable care organizations

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.”

Examples of quality measures

The federal Centers for Medicare and Medicaid has proposed 65 quality measures to establish standards that accountable care organizations must meet to share in cost savings. Here is a sampling of those measures:

Patient/caregiver experience

  • Access to timely care
  • Physician communication
  • Helpfulness of office staff
  • Patient ratings of physicians
  • Health promotion and education

Care coordination

  • Medication reconciliation after discharge
  • Use of patient registries
  • Percentage of physicians meeting Stage 1 “meaningful use” requirements for electronic health records

Patient safety

  • Health care acquired conditions composite, i.e., surgical site infections, falls and trauma, blood incompatibility, etc.

Preventive health

  • Influenza immunization
  • Mammography screening
  • Cholesterol management for patients with cardiovascular conditions
  • Blood pressure measurement
  • Depression screening

At-risk population/frail elderly

  • Management of diabetes mellitus, heart failure, hypertension
  • Screening for risk of falls
  • Osteoporosis management in women with previous fracture

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.”

Shared savings

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.”

5 Responses

  1. Robert Gross DO on June 4, 2011, 11:43 a.m.

    While I agree that the start up process is daunting and the ‘ meaningful use ‘ aspect is cumbersome I think it is going to happen whether we like it or not. And on the comment that this seems like rationing, I will have to assume that the comment comes from a physician that doesn’t currently deal with a lot of managed care. Their ‘ rationing ‘ I assure you, is much more draconian than anything CMS is likely to implement. Health Care reform for all of it’s flaws, may ultimately loosen the stranglehold of the for profit insurance and hospital industries on our health care system, if and only if physicians take the leadership role in it’s implementation. If there are flaws in the ACO program, then help to fix them. Your livelihood may depend upon it.

  2. Dr Z on June 5, 2011, 10:51 a.m.

    I disagree with Dr Gross comments. The current Health Care reform legislation in its present form will ultimately end up driving all private insurance and many private hospital systems out of business and result in government run socialized medicine with a single payor system, the Government. The slated massive cuts in Medicare and Medicaid budgets, compounded by the severe economic crisis we are facing, will soon force progressively more severe and harsh cuts in physician and hospital payments resulting in ‘rationing of care’ which will make the Managed Care system’s ‘rationing’ pale in comparison. The government is attempting to implement total control over the entire health care system so that physician’s and health care organizations will be forced to limit care based on financial rather than patient care considerations.
    I agree that we have to reign in health care costs, but we need to repeal the current Health Care reform, not take a leadership role in its implementation! Oh, by the way, I am a physician who deals with a lot of ‘Managed Care’ and have done so for too many years. My father was an Osteopathic General Practice Physician, and I can remember the days when the only 2 people in the exam room were the patient and their physician. I don’t have all the answers on solving all the problems facing healthcare, but the current Health Care Reform is not the answer.

  3. Patrick Murphy, DO on June 8, 2011, 1:39 p.m.

    I DISAGREE WITH DR GROSS AND AGREE WITH DR Z, IT IS FATALISTIC ATTITUDES THAT IT IS COMING AND CAN’T BE STOPPED OR AVOIDED PLUS OPPORTUNISM BY SOME THAT BROUGHT US MANAGED CARE.SINCE MANAGED CARE TURNED OUT TO BE MORE EXPENSIVE THAN PRIOR INDEMITY INSURANCE (PERHAPS IN PART BY PUTTING 600,000 INSURANCE WORKERS INTO THE HEALTH INDUSTRY).
    THIS ARTICLE SHOWS THAT ACOS ARE NOT SUSTAINABLE EVEN IF THEY ARE THE RESULT OF THE “AFFORDABLE”ACT.THEY WILL NEED TO BE REPLACED EVENTUALLY BY SOMETHING PRACTICABLE.

  4. robert migliorino,d.o. on Oct. 5, 2011, 5:18 p.m.

    I agree that these measures are Draconian.However,one could implement a method of monitoring. Over the years,I have seen too many violators,both public & professional.Until admins stop mandating how one will practice & physicians show some backbone in not acquiescing to every patient’s & admins demand ,the situation will persist.

  5. David Shepherd on Oct. 8, 2011, 12:03 p.m.

    Almost all healthcare reforms seem to propegate and increase complexity in healthcare. ACOs are no different. When will someone propose an idea that strips away at least one layer of complexity and simplifies the process. Patient sees doctor and patient pays doctor directly: use insurance only for chronic disease and major illnesses. Similar to car insurance. Insurance doesn’t cover an oil change for your car. Allow doctors to do thier job managing chronic disease and educating patients about what metrics we need to hit to “control” a chronic disease. And, imagine if we trusted patients to take some responsibility for assuring that thier doctor was actually doing his/her job. Of course, a decrease in bureaucracy would mean loss of jobs (and expenses) and no politician is going to propose something like that.

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