In a high-stakes political, clinical and economic poker game that goes by the name of Accountable Care Organizations (ACOs), the Centers for Medicare & Medicaid Services (CMS) has just issued a call for doctors and hospitals to grab some chips and ante up.
The set-up goes like this: one of the biggest potential changes in how health care is actually delivered contained in the Accountable Care Act was ACOs. They’re voluntary, but they allow doctor- or hospital-led organizations that take responsibility for coordinating the care of at least 5,000 Medicare beneficiaries to get reimbursed at a higher rate for providing better-quality, lower-cost care. It’s supposed to be a win-win-win for providers, patients and taxpayers and part of a more general move towards “value-based purchasing.”
The problem is that the draft rules proposed by CMS for ACOs back in March looked like a sucker’s bet. Not only were the requirements complex and expensive, the rewards were meager and the odds of winning were unattractive, particularly considering the initial costs to set up an ACO. The big health care systems and physician organizations that had been clamoring for a seat at the table when ACOs were first proposed told CMS they didn’t like the “house rules” and weren’t going to play. Although the concept of ACOs has deep bipartisan roots, a group of Senate Republicans anxious to pounce on any administration shortcomings jumped in with “serious concerns” about one more possible ObamaCare failure.
But the final regulations released Oct. 20 simplify the rules, sweeten the pot and even pull up a few new chairs. They make it easier for would-be ACOs to get paid (sharing “first-dollar” savings), reduce bureaucratic hassles (no more micromanagement of marketing materials), simplify the measures of success (33 measures in 4 domains rather than 65 measures in 5 domains) and provide financing to allow new players, such as federally qualified health centers and rural health centers, to get into the game.
Of course, the final regs won’t depoliticize ACOs or, given the near-universal unhappiness with the draft rules, won’t entirely succeed in the equivalent of spinning straw into gold. But with CMS proclaiming its intention to be a valued partner rather than a green-eyeshade overseer (OK, they don’t actually use that last phrase), the ACO program should be attractive enough to entice some of the high- roller headline names in health care to belly up to the table. The ultimate goal is to use financial incentives to reward better care. With private-sector ACOs also growing in importance — they’re a big priority for insurers like Aetna and UnitedHealth Group, this is a game where we all have a stake.
Michael Millenson is a Highland Park, IL-based consultant, a visiting scholar at the Kellogg School of Management and the author of “Demanding Medical Excellence: Doctors and Accountability in the Information Age”.