The American Medical Association (AMA) recently issued its comments to CMS relating to the proposed Medicare Shared Savings Program ACO regulations.  The comments cover numerous areas of the proposed regulations, and overall, the AMA makes clear its concern that the program as currently proposed provides insufficient incentives for physician participation.  While acknowledging that the ACO program “can be an effective tool to improve quality, manage care coordination, reduce health care costs, and create a supportive environment for practicing physicians,” in light of the issues and uncertainties facing the program, the AMA asks CMS to consider issuing interim final rules, rather than final rules, to maintain flexibility to modify and improve the program as more information is learned.

With respect to payment and risk structure under the program, the AMA urges CMS to provide a payment option that includes a one-sided risk model as an alternative to the two-sided risk model currently proposed.  The AMA identifies several reasons why it is inappropriate to force all ACOs to accept down-side risk, including lack of data, lack of risk-adjustment, and the fact that costs can be driven by non-physician providers.  The AMA also proposes that CMS consider (i) allowing first-dollar sharing of savings for all ACOs, (ii) providing ACOs a higher share of savings, (iii) reevaluating the structure of the 25 percent withhold provisions, (iv) include a risk adjustment based on patient health status, and (v) consider adopting provisions to address the impact of outliers on an ACO’s performance.  The AMA also asks CMS to include several “transitional” ACO payment models as part of the program.  Suggested models include partial capitation, condition-specific capitation, and development of accountable medical homes.  Again, the AMA concludes that without these changes, the proposed “one-size fits all” ACO program payment structure will limit participation to large groups, shutting out smaller participants that do not have the same access to necessary capital.

The AMA also urges CMS to adopt a more flexible approach to beneficiary assignment to ACOs.  In particular, the AMA takes issue with the proposed retrospective assignment of beneficiaries to ACOs.  It notes that under the retrospective approach, active patient support and participation in the program and the ability of physicians to better help their patients to benefit from coordinated care will be limited.  The AMA proposes that CMS should allow for patients to voluntarily choose participation in the ACO, and that CMS should maximize the extent to which the ACO is held accountable only for those patients who voluntarily choose participation.  The AMA also requested that primary care physicians be given the option to join more than one ACO in the same way that specialists are so permitted.  In the AMA’s view, limiting a primary care physician to participation in a single ACO would discourage participation and limit the number of ACOs that can form in a particular community.

Regarding quality measures and other reporting requirements, the AMA calls for CMS to reduce the number of measures and to provide ACOs some flexibility regarding quality reporting requirements.  The AMA notes that to require ACOs to meet all 65 quality measures as currently proposed will effectively require hospital participation in the ACO, limiting the number and type of ACOs that may be formed.  The AMA also notes its support for a uniform survey and survey process for ACOs, stating that standardization in the use of survey tools across ACOs is necessary to make accurate comparisons.

Finally, the AMA states its support for waivers of federal program integrity laws, including the Stark Law and Anti-Kickback Statute, but provided several recommended changes.  The AMA notes that the waivers as proposed are too limited in duration and would need to be extended to allow providers to put the necessary work into structuring an ACO.  The AMA also suggests that the waivers should be expanded to other financial arrangements necessary to create ACO infrastructure and to cover the distribution of shared savings from private payers to the ACO.  Finally, the AMA stresses the need for federal law to address the impact of state fraud and abuse laws on ACO operations, noting that some state laws may be more restrictive than similar federal laws.  Federal preemption of such state laws may be necessary in some circumstances.

Overall, the AMA’s comments are broad ranging, covering several critical aspects of the ACO regulations.  Importantly, these comments also appear in line with many criticisms facing the program since the release of the proposed regulations. Major changes to the ACO program are likely needed to ensure sufficient participation.