KEY STAKEHOLDERS CONTINUE TO EXPRESS ACO CONCERNS

As the comment period for the Centers for Medicare and Medicaid Services’ (CMS’) proposed rule to create Accountable Care Organizations (ACOs) draws to a close, major stakeholders continue to express serious concerns and doubts with the proposal as currently written.

Last week, the American Hospital Association (AHA) submitted a 24-page comment letter to the agency, found here, stating that interest in the ACO concept had “dwindled dramatically” since the release of the proposed rule, that many of its members are disappointed, and that substantial changes are necessary in order to make the ACO program “operationally viable and attractive to potential participants.”

The letter went on to say: “The AHA recognizes that in crafting the proposed regulation, CMS attempted to achieve a balance between offering incentives for providers to participate in the ACO program and fulfilling CMS’ obligation to protect taxpayers and the Medicare Trust Fund. However, as proposed, this balance is misaligned. The proposed rule places too much risk and burden on providers with little opportunity for reward in the form of shared savings, especially in light of the significant start-up and operating costs that providers must bear with little or no assistance. In order for hospitals to participate in the program in a meaningful way, a more appropriate balance is needed.”

In addition to the AHA, two major physician groups – the American Medical Association (AMA) and the American Osteopathic Association (AOA) – have also expressed significant reservations. Notably, the two organizations called on CMS to issue its upcoming final ruling on ACOs as an interim final rule that would allow for additional comments and revisions.

Specifically, the AMA stated in draft comments: “Since this is a completely new Medicare delivery and payment model, the AMA urges CMS to issue an interim final rule, rather than a final rule, so that CMS maintains the flexibility to modify and improve the ACO regulations as the agency learns more about this model.”

As discussed in past updates, comments on the proposed ACO rule are due to CMS today, and the final rule is currently expected later this year.

SIMILAR SKEPTICISM ON RELATED ACO ANTI-TRUST PROPOSAL

The AHA and AMA also both weighed in on anti-trust concerns.

As discussed in past updates, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) released a joint proposal in conjunction with the release of the proposed ACO rule that focuses on the anti-trust implications of the new ACOs. The agencies proposed to approach the anti-trust issue by dividing ACOs into three groups based on how much business is done in a specific geographic area. The ACOs in the largest category will be subject to a mandatory review process and will need that approval in order to move forward with implementation.

In response, the AHA conducted an analysis that found many of its member hospitals will be subject to the mandatory review process. The association expressed concern with this finding, despite promises from the FTC and DOJ that the process would be conducted quickly. The AHA stated: “This suggests that those seeking to build the most comprehensive ACO models of the future are the ones most likely to be ensnared in an uncertain, unappealable, burdensome and costly antitrust review before their merits as a force to transform health care delivery can be determined by CMS.”

On a related note, the AMA weighed in on the anti-trust proposal, stating that, as currently written, the proposal “…could have a significant and negative impact on the ability of physicians, hospitals, and other eligible ACO entities to successfully form and participate in ACO models.” The association also stated: “If physicians cannot see a clear path to forming an ACO, these models will not achieve their full potential to increase care coordination and promote cost savings.”

NEXT STEPS

We continue to follow healthcare-related news from Congress and the Administration and will provide timely updates as new developments occur. We will also continue to offer additional analyses and views on ACOs and the Medicare Shared Savings Program.