Health Affairs: Road to ACOs trying for CMS

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The support for the variety of accountable care organizations (ACOs) from the Centers for Medicare and Medicaid Services (CMS) has been storied, according to an article published in the July edition of Health Affairs.

In the article, author Harris Meyer outlined three ACO models. Two of these models have won some support: the Pioneer model, announced on May 17, and the Transition model, a modification and two-year extension of the Medicare Physician Group Practice Demonstration, which ran from 2005 to 2010.

The third model, the Medicare Shared Savings Program (MSSP), has taken a beating in stakeholder response, Meyer noted.

“Under the planned three-year program, scheduled to start January 2012, primary care-led physician and hospital organizations that voluntarily form ACO networks will provide coordinated care for at least 5,000 'assigned' Medicare beneficiaries. In addition to receiving standard fee-for-service payments, participating provider groups will receive a share of the savings they produce for Medicare if they meet quality and cost targets,” Meyer wrote.

CMS, which hopes to sign up 75 to 150 organizations for the MSSP, had received approximately 1,300 comments—many of them negative—by the time the comment period had ended.

CMS Administrator Donald Berwick has stated that the agency is reviewing the criticism and will draft a new version of the regulation to be issued in the fall, according to Meyer.

“In the Pioneer program, provider groups can propose their own payment arrangements to the [CMS] Innovation Center, within parameters set by the center,” wrote Meyer. “The center’s guidelines suggest that in the first two years of the program, payment would be based on a modified version of fee-for-service payment plus shared savings."

As with the MSSP, organizations using the Pioneer model will have to meet quality benchmarks and can earn savings if they spend less than an expenditure target that’s based on a projection of what their Medicare patients would have cost in the absence of the program. Pioneer ACOs can earn shared savings bonuses if their savings exceed 1 percent of their target expenditure; the guidelines offer core payment arrangements with a bonus percentage of either 60 percent or 75 percent.

The Transition program is only for multispecialty physician groups that can choose to continue to participate in the Physician Group Practice Demonstration. CMS is in talks with the 10 groups that participated in the demonstration about continuing for another two years, according to Meyer.

Looking to the future, Meyer notes that CMS will face challenges with the MSSP, including political pressure to show short-term Medicare savings with ACOs. “[CMS] must craft a plan to communicate these unfamiliar new ACO programs to seniors in traditional Medicare, who may be suspicious of anything that sounds like it might limit their choices among providers, even if it doesn’t,” he concluded.