Proposed Rule Assumes Most Beneficiaries Won't be Assigned to ACOs

Listen
Text
  • Small
  • Medium
  • Large
The newly released HHS proposed regulation on accountable care organizations assumes that just 11 percent of Medicare beneficiaries would be assigned to ACOs, according to a new analysis of the 429-page document by the Deloitte Center for Health Solutions.

"Guardedly, CMS suggested it envisioned only five million Medicare beneficiaries would participate in the ACOs — that’s 11 percent of total enrollment," the Center reported. "On page 352, however, the guidance suggested a lower range of 1.5-4.0 million."

The Center explained "some provider communities will no doubt pass [on creating an ACO], preferring to create clinically integrated delivery systems through other means." Other federal programs that involve integrated care are episode-based payments and medical homes. In addition, the new Center for Medicare and Medicaid Innovation may propose more payment models.

Providers considering forming an ACO should consider three questions, the center said:

  • Do you want to create a clinically integrated delivery model in which physicians, hospitals, long-term care and allied health professionals join together in a formal structure to assume risk for costs and outcomes?
  • Are you prepared to make investments in infrastructure and changes in operations to achieve optimal results?
  • Do you have the core competencies to manage population-based outcomes and costs, as well as the associated insurance risk? Or should you outsource these functions?

The Deloitte document made 10 other points about ACO plans, based on its close reading of the proposed regulations, which were released on March 31.

1. ACOs have to be focused on Medicare. While it still can contract with local employers or health insurance plans, an ACO must "stay primarily focused on Medicare to be approved and compliant," the Center stated.

2. Savings might be higher than estimated. An ACO performing in the top 10 percent is expected to save 0.7 percent on its Medicare expenditures, or $960 million, the proposed rules said. However, "it seems significantly more could be saved if an ACO optimizes quality and savings potential," wrote Paul Keckley, director of the Center. ACOs can keep as much as 60 percent of savings above a 2 percent threshold.

3. Quality measures emphasize primary care. Of the 65 quality measures proposed, 31 focus on outcomes for managing specific health problems of elderly populations, such as diabetes and care for the frail elderly. "Thus, the ACO requires a strong primary care component via physician and nurse practitioners/advanced practice nurses to optimize performance," the Center says.

4. At least 20,000 beneficiaries needed for an ACO. Although the law states an ACO can function with as few as 5,000 Medicare beneficiaries, for scalability an ACO would likely need at least 20,000 Medicare lives, the Deloitte Center said.

5. Not just physicians, but 'ACO professionals.' The proposal states hospitals can form ACOs by employing or making partnerships with "ACO professionals," who are more than just physicians. The term also embraces physician assistants, nurse practitioners and clinical nurse specialists.

6. CMS really wants feedback. Proposed rules always anticipate public comments, but this time federal rule-makers seem to really want input and may make some changes. The proposal makes frequent references to the 60-day period when stakeholders can comment and even explicitly request feedback in several places, such as on recouping start-up costs for ACO development and infrastructure.

7. All ACOs must take on financial risk. ACOs can still choose one-sided risk, in which they can make money for producing savings but wouldn’t lose money if they didn't. However, one-sided risk would last for only two years. In year three, every ACO must accept two-sided risk, which financially penalizing them for not producing savings.

8. EHR use assumed. Use of electronic health records is assumed. "It is presumed that parties sharing risk are connected via EHRs under provisions of meaningful use, and that the performance of providers is transparent and readily accessible to consumers, employers and third parties," the center stated.

9. What a market is, for antitrust purposes. For purposes of measuring competition, an ACO’s primary service area is defined as the zip codes where 75 percent of ACO beneficiaries reside. ACOs with 30 percent or less of that market would qualify for an antitrust “safety zone” and ACOs with 50 percent or more of the market would have to submit to a mandatory ACO antitrust review.

10. Private-payor ACOs and antitrust. A separate commentary by the Department of Justice and the Federal Trade Commission said if CMS-approved ACOs contract with private payors, those arrangements would be appropriate for antitrust purposes if the ACO provided "the same or essentially the same services in the commercial market."

Read the report by the Deloitte Center for Health Solutions on ACOs.



Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars