At a recent briefing on ACOs, sponsored by Alliance for Health Reform and The Commonwealth Fund, a senior CMS official acknowledged what many in the provider community have been grumbling since the ACO proposed rules were released in March that the ACO program, as currently projected, sets too high a bar for participation and provides insufficient rewards to make sense for most providers. 

Speaking at the briefing regarding ACOs, Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation at CMS, acknowledged concerns regarding the proposed rules, stating “We know that this is a proposed rule, and that the goal is to take our best shot and then work with the industry, work with interested parties to figure out what the best approach is.”

Mr. Gilfillan stated that CMS is open to comments and suggestions on the ACO program, and suggested that commenters should address whether the requirements are too high primarily for participation in 2012, or whether the proposed requirements would be too difficult to meet permanently.

Mr. Gilfillan’s statement comes on the heels of a report in the Congressional Quarterly that several high profile providers are questioning the likelihood of ACO participation. Some have criticized the up-front costs associated with developing an ACO, pointing to the need to build infrastructure, investing in information technology, revising procedures, and developing new business relationships, and have suggested that this could threaten the viability of some health systems.  Others have suggested that the 65 quality measurements proposed by CMS to measure quality performance are too numerous.  Finally, some have pointed to the fact that in a recent shared savings demonstration project used as a model for the ACO program, only 5 of the 10 participants received any shared savings payments.  

While it may be surprising to hear such a frank admission from CMS, the request for guidance from industry is in keeping with the proposed rules, where many important provisions have been left undeveloped in the hopes that industry commenters may “fill in the blanks.”  However, given the limited comment window before final rules are developed, it’s unclear how much the ACO program can be reoriented to address these major provider concerns.  CMS has taken some steps to address these issues, launching the “Pioneer ACO”  program to provide already-integrated provider systems a streamlined method for participation.  It remains to be seen how effective this will be in spurring ACO development and participation. What are your thoughts regarding likely provider participation?