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CMS Wants Docs to Ante Up to ACO Poker Game


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”.

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Daniela
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Alfred Alamo
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Sue
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Sue

Docs need to stop bitching and moaning and band
Together to make a change. We gave away our
Independence to the CEOs for pennies. Insurance companies
Pharmacies and patients cannot manage without
Doctors. Stop selling out and say NO. If they think
Replacing us with RNs and PAs will work. Go for it and call
Us when your ready to give up control and we will then clean
Up the mess.

em. sade
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http://ebiz.org.ua – there’s a great multitasking system EBIZ CMS – the most inexpensive of clever CMS in the world!

WJD
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Whoa there partner, before we get all full of politics and whiskey and the guns come out we should recognize the the health reform package thats seems all new to people was really the work of early pioneers like nate ( great comments on HMO act of 73) and obamacare and romney care has its basis in nixon care http://www.cnn.com/2011/10/25/opinion/altman-romney-obama-health-care/ This is a logical although painful realization that we have at least 30% of the health care dollar wasted nationally and when we add to that inefficiencies that create barriers to needed care ( access) and costs that have risen… Read more »

Barry Carol
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Barry Carol

Margalit – I agree that the problem of high healthcare costs and excessive utilization in the U.S. is multi-factorial and requires several different approaches that can be pursued on parallel tracks. For example, I’ve consistently advocated for price and quality transparency tools available to both patients and referring doctors coupled with tiered networks offered by health insurers in order to steer as many patients as possible toward the most cost-effective, high quality providers. I think we need tort reform, especially safe harbor protection from failure to diagnose lawsuits, for doctors who follow evidence based guidelines where they exist. We need… Read more »

Margalit Gur-Arie
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“If we want to reduce costs, we need to attack unnecessary and inappropriate utilization, not CEO compensation and middlemen.” Barry, I do agree that we need to reduce inappropriate and unnecessary utilization, and as I argued above, I believe much of this type of utilization is occurring because of reasons unrelated to patient demands. Most folks don’t go to doctors to get stented. They go because they have pain. Most 85 year olds with Alzheimer and CHF do not ask for PSA testing while in the hospital for one last time (true story, including biopsy). I believe these things are… Read more »

Barry Carol
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Barry Carol

The second part of the Religion and Ethics News Weekly series on end of life care focused on living wills and advance directives. The piece highlighted how the process works at the Gundersen Lutheran Health System in LaCrosse, WI. They offer thorough end of life counseling for their terminally ill patients and encourage them to execute living wills and/ or advance directives so both providers and family members know ahead of time what services and interventions the patient wants and doesn’t want. At Gundersen, 96% of their patients have executed such documents as compared to something like 25% for the… Read more »

Michael Millenson
Guest

Nate, you’ve confirmed that the major managed care backlash was in the 1990s, as I said and you originally disputed. You’ve also confirmed that you still have a problem with facts. The proposal in health care reform, from a Republican, was for Medicare to pay for end-of-life counseling. To turn something non-political — the option for individuals to be counseled in an emotionally trying time — into a government-mandated death panel is radical. Your outrage reminds me of the left-wingers back in the 60s and 70s who viewed everything as a government plot. There are plenty of places those on… Read more »

nate ogden
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nate ogden

“was for Medicare to pay for end-of-life counseling. To turn something non-political” LPCP was just a bunch of suggestions and now it has murdered healthy people. All government regulaltion starts off small and non intrusive. Medicare use to pay providers market prices, until it needed to save money then it just changed the rules. Its very easy to see how Medicare could passivly reimburse for the session. 5 years from now they need to save some money so the session is mandatory. Then once they have all this data and we need to cut more money they go full LPCP.… Read more »

Margalit Gur-Arie
Guest

There is another implied assumption here that I very much dislike. Are we saying that unless we throw $50 bills at doctors, they will not have these conversations with patients that need to have them? There are plenty reimbursable counseling CPT codes already. Why is this one singled out? And which one is next? The “conversation” about abortion being murder for all women contemplating one? No, not mandatory, of course. We just give you $50 bucks if you do. After all we know that doctors will do anything for $50 and it’s the right thing to do. There is no… Read more »

Michael Millenson
Guest

One of my favorite sayings is that everyone’s entitled to their opinions, but not to their own facts. So, sorry, Nate, the facts I’ve stated on managed care are accurate. The phrase itself originated in the business-oriented Reagan administration in the 1980s. (No one claims responsibility; Dr. Paul Ellwood invented the term health maintenance organization earlier.) The HMO backlash took place in the early 1990s as employers in the late 1980s forced employees to change. My favorite example was legislation supported by Democrats and Republicans alike, completely overriding the market, to disallow 24-hour mandatory stays for new moms and institute… Read more »

nate ogden
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nate ogden

Being the person selling and managing the plans I remeber pretty well what we were doing in 1988 and what we were doing in 1996. And this was in NV and CA, CA being the hot bed of HMOs. The 80s were spent moving people from Indeminity plans to HMOs or PPOs. PPOs were mandatory and received a lot of push back, telling people they had to see doctors on a list was a big change. Through the 80s HMOs were hardly ever the only plan offered. The only reason most employers even offered them was becuause federal law said… Read more »

Barry Carol
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Barry Carol

“First, the problem is not that we cannot “give” care to all. It is that we cannot “buy” care for all. The reason we cannot buy care for all is that those who sell care are asking for too much money for the care. In addition to the sellers, there are a host of middlemen who are adding to the price of care no good reason.” Margalit – There are roughly 14 million people who work in the healthcare field in the U.S. Roundly 800,000 are doctors of which about half work in primary care and are probably underpaid. Approximately… Read more »

Richard L. Reece, MD
Guest

There’s a card game named Dead Man’s Poker. It’s an apt name for the first ACO rules, which individual physicians and physicians in large integrated organizations universally declared DOA. Chaniging the rules of Dead Man’s Poker by cutting quality measures friom 65 to 33, offering more flexibility in antirust review, loosening rules of governance and legal structure, altering time to repay losses, being told what Medicare recipients can be part of the ACO, sharing Medicare savings earlier and reducing risk of losing dollars, extending the time to apply throughout 2012, and making $170 million to set up ACOs, expanding payments… Read more »

Margalit Gur-Arie
Guest

“Step back from the details for a moment. If you can’t give all possible care anyone might want to everyone all of the time, what do you do as an allocation mechanism? ” At the risk of being repetitive, I would say that this question is not well posed. It is creating a theoretical problem which is different than the actual problem and therefore the theoretical solution will not solve the real problem. First, the problem is not that we cannot “give” care to all. It is that we cannot “buy” care for all. The reason we cannot buy care… Read more »

Roger Collier
Guest

Four questions: 1. Why is “everyone can’t go away from the poker game with winnings” wrong? So long as ACOs can reduce their variable costs more than their bonus payments they will come out ahead. (Well, a few hospital employees may have to be added to the jobless rolls, but they were never in the game.) 2. Why are hospitals interested in ACOs? It’s a great opportunity to tie physicians more closely to hospitals, thereby guaranteeing referrals and admissions and strengthening their negotiating positions on rates. (And now that the final regs make beneficiary assignment prospective, the costs and risks… Read more »