What Physicians and Practices ‘Really Need to Know’ about ACOs

October 26, 2011

Forming an ACO or participating in one is no easy task. Here’s how the ACO final rule could make it a more practical option for you or your practice to consider.

The final regulations for Medicare's Shared Savings Program, released last week, relaxes some of its more onerous requirements on healthcare providers, but risks remain for those contemplating participating in or forming an Accountable Care Organization (ACO). That's according to Anders Gilberg, MGMA senior vice president of government affairs, who spoke about the topic during his MGMA 11 session, “Medicare Accountable Care Organizations: What You Really Need to Know.”

“Shared savings is often elusive,” Gilberg said, noting that of the 10 medical groups that participated in the ACO demonstration projects, only five “got any shared savings at all.” And he said, these groups were some of the biggest, best, most integrated in the country.

But a lot has changed since the ACO final rules were released late last week. Analysts including Gilberg are continuing to digest the 800 pages of regulations. Indications are that the final rules make ACOs somewhat more accessible and practical for physicians, practices, and hospitals to consider.

Here’s why:

In the proposed rule, ACOs could only be formed by four types of healthcare organizations: ACO professionals (defined as physicians, PAs, NPs) in group practice arrangements; networks of individual practices; partnerships between hospitals and ACO professionals; and hospitals employing ACO professionals. In the final rule, CMS has added a fifth group to that list: critical access hospitals, federally qualified health centers, and rural health centers.

Thanks to the final rules, the ACO program now has a more flexible start date. Originally slated to begin January 1, 2012, the final rules offer a “staggered” approach to admittance throughout 2012. “It will allow, I think, some necessary lead time from this point forward” for organizations to get together to form them, Gilberg said.

The final rule also offers a more “hybrid” approach to patient assignment than the original plan of assigning patients to ACOs retrospectively, he said. It had seemed unworkable to many providers that they would not have been informed who their ACO patients were until after their first year of ACO participation. Instead, CMS will provide participants with a preliminary list of patients most likely to be part of their ACO patient population. “It does give the ACO some knowledge of the population for whom they’re going to be held accountable,” he said.

In addition, the challenging requirement that 50 percent of ACO participants attain meaningful use of EHRs by their second year of participation has been removed. “That was a pretty high bar” for practices to meet, Gilberg said.

The proposed rule also dictated that ACO participants report on 65 quality measures for their patients. A “significant improvement” to the ACO program is that the final rule includes only 33 quality reporting measures, he said.

In addition, the “hospital only” quality measures were removed from the proposed rule which “frees up physician groups to form ACOs on a standalone basis,” said Gilberg.

Also of note is that the one-sided risk model is now the “purest form of shared savings,” he said, meaning that for the first three years of participation, ACO providers can choose to participate in a shared savings-only model with no financial risk. These ACO participants have the potential to see up to 50 percent of shared savings.

Still, Gilberg said forming an ACO or participating in one is no easy task. As he noted, even some of the biggest and best groups find it a challenge to be successful within one.

Another risk is that when a patient is assigned an ACO, he can still see other providers outside of that ACO. This could make it harder for the providers to track and improve that patient’s care and cost of care. “You can’t control the patient,” Gilberg said.

In addition, patients within an ACO can also opt out of sharing their patient information with healthcare providers within the ACO. He said such information is “critical” for an ACO to track patients and therefore improve cost and quality of care.

Finally, Gilberg said, it’s going to be very difficult for providers to even get an ACO up and running. That’s because there are “significant startup costs” in forming one. Just how much could those costs be? CMS estimates up to $2 million in some cases, said Gilberg.