The Thing to Watch in the Medicare ACO Regulations


Health care lobbyists and advocates are bracing for six pages of the health care reform law to explode into more than 1,000 pages of federal regulations when the Department of Health and Human Services releases its long-delayed accountable care organization rules this week. Politico

What should you be looking for as you snuggle by the fireplace this weekend reading the draft ACO regs?

Rob Lazerow writes a helpful article listing 5 Things to Watch in the Medicare Shared Savings Program Proposed Rule. His list of five key design issues includes:

  1. How will patients be assigned to ACOs?
  2. To what cost benchmark will ACOs be compared?
  3. How will bonuses be calculated and paid?
  4. For which quality metrics will ACOs be responsible?
  5. What is the application process?

I’d like to add a sixth  item — which actually would be #1 on my list.

As I’ve previously written, IMHO the central issue around ACOs is:

Are (hospitals and doctors) viewing ACOs as a way to truly develop patient centric, collaborative care or as a means toward consolidating market power against payers? We really don’t know.

So here’s item #6:

6. What incentives and safeguards will assure that ACOs are focused on coordinating and integrating clinical care vs. consolidating market power?

Here are some specifics I’ll be looking for:

  • How meaningful are guidelines, metrics and thresholds that define and specify elements of clinical integration?
  • Are doctors and hospitals incentivized to provide value? How will this be measured?
  • Will there be explicit safe harbors clarifying anti-trust and other regulatory issues? Will there be allowances for meaningful collaboration among providers? Will there be penalties for collusion leading to higher prices?
  • Are the ACO Shared Savings regs designed to be an end point financing/delivery model or a first step in a transition toward shifting some downside risk to care providers (e.g., bundled payments or episodic payments)? There’s a danger that this initial Medicare shared savings ACO approach could become the worst of both worlds:
    • retaining the perverse incentives of current fee-for-service payment while adding potential for bonuses
    • not providing sufficient long-term incentives for care providers to change systems and workflow to improve patient care.
  • Will there be specific requirements for ACO information technology?
  • …and others (please add your comments).

Vince Kuraitis JD, MBA, is a health care consultant and primary author of the e-CareManagement blog where this post first appeared.