Report: ACO participation poses risks despite revised regulations
Although the final regulations regarding the shared savings program (SSP) between Medicare and accountable care organizations (ACOs) addresses shortcomings in earlier proposed regulations that may have made ACO entry too difficult for providers, participation in ACOs and the SSP still may not appeal to providers.

According to an analysis conducted by healthcare law firm Hooper, Lundy & Bookman, “Although the final regulations on Medicare ACOs look much better than the proposed regulations, the universe of providers for whom participating under the SSP is attractive, or even feasible, may still be relatively small.

“Whether and to what extent participating in an ACO makes sense will depend on a variety of market-specific factors,” authors of the report, dated Nov. 22, continued. “In the final analysis, many providers may determine that it is either too costly or too uncertain a proposition to participate in an ACO.”

Hooper, Lundy & Bookman’s analysis indicated that, among others, challenges to becoming and surviving as an ACO include up-front requirements, on-going requirements, potential for rejection from the SSP and potential for termination from the SSP.

Additionally, the report suggested that providers and organizations pondering redesign as an ACO should consider the costs to apply for SSP participation, limited antitrust protection for ACO members, potential for delayed payouts and state laws.

The report’s authors advised that only “sophisticated providers with experience in managing care under capitated contracts,” attempt to participate in the SSP, claiming that it is not “a ‘test field’ for providers interested in experimenting with care integration and management strategies on their Medicare fee-for-service beneficiaries.”

Instead of ACOs and the SSP, the report’s authors suggested several alternatives for providers that wished to implement more integrated delivery models, pointing to gain-sharing, pay-for-performance and service line co-management arrangements.

The report’s authors also advised that providers interested in participating in the SSP or forming an ACO should wait until after the initial implementation of SSP between April 1, 2012 and July 1, 2012 before making a final decision about participation, but also advised them to find other opportunities to practice integrated care.

“Even for those who decide not to participate in SSP, finding opportunities to strengthen an organization’s competencies in clinical integration, patient-centeredness and care management should pay dividends as Medicare’s payment model ultimately moves in a direction that demands such skills to succeed,” the report concluded.

Hooper, Lundy & Bookman’s analysis, which also contains explanations and details of specific regulations, is available here.