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As ACO Rule Limps Toward Finish Line, More Defenders Emerge

By Jane Norman, CQ HealthBeat Associate Editor

Deadline day arrived for comments on Medicare's much-abused proposal for accountable care organizations (ACOs). And supporters of the Obama administration championed its pro-patient provisions in the face of criticism from the health industry.

Early industry feedback on the ACO rule focused on the expense and complexity it posed for hospitals, doctors and health organizations interested in teaming up to achieve higher quality, better patient care and lower costs. Many providers were deeply skeptical that they could participate and urged a major rewrite.

But Families USA, an advocacy organization that has strongly backed the health care law, said that the Obama administration had taken a "balanced approach" in the regulations and that they put patients first. Comments on the proposed rule were due by midnight.

"While some stakeholders are concerned about asking too much of ACOs and individual providers, we believe that they must be held to a standard that is high enough to ensure they deliver high-quality, patient-centered care," said the Families USA comments written by Michealle Gady, a health policy analyst.

What's important is that Medicare beneficiaries and their needs remain at the center of the system, Gady said. "It is essential that new delivery systems, such as ACOs, are more than a new way to pay health care providers," she wrote.

The group did suggest some changes in the rule. One suggestion pointed to one of the proposal's most controversial recommendations—that ACOs suffer financial penalties if they exceed spending targets.

Families USA officials said they are worried about the model under which in their third year, ACOs would share in Medicare savings and losses. This could harm beneficiaries if the ACO is not ready to assume the risk and is undercapitalized, the advocacy group's comments said. Instead there should be an evaluation at the end of the second year to determine the ACO's ability to sustain risk, the group said. And if that review finds the ACO is not yet stable enough to handle risk, the ACO should allowed to finish its third year without any financial penalties.

The group also asked for more beneficiary representation on ACO governing boards and improvements in the way patients are notified that they are part of ACOs.

ACOs, authorized under the health care law (PL 111-148, PL 111-152), will include physicians, hospitals and health care systems working together to improve quality and lower costs. ACOs will share in savings that are achieved as well as risks under the models proposed by CMS.

MedPAC Weighs In

In its comments, the influential Medicare Payment Advisory Commission, (MedPAC), an independent body that advises Congress and that hopes ACOs can be effective, advised patience and a look at the long term.

MedPAC said that if it is structured carefully, the shared savings program could present a path to correcting "undesirable incentives" in fee for service Medicare that lead to rising costs. However, creating a well-functioning ACO will require a significant investment of money, effort and time, and the traditional fee-for-service system may remain attractive to providers, MedPAC said.

Thus it would be a mistake to judge the success of the program by counting how many ACOs participate right away, said MedPAC. A program that builds gradually and is designed to meet the goals of high quality care and slower spending growth is more likely to succeed.

MedPAC made six general recommendations, including simpler quality reporting by focusing on a narrower set of quality measures and clear performance thresholds for each measure.

In addition, MedPAC said beneficiaries should be assigned to all types of primary care providers, including non-physician practitioners and specialists "under certain circumstances." The Center for Medicare and Medicaid also should allow people in an ACO to be assigned to community health centers and rural health centers, MedPAC said. Under the rule as written, patients can't be assigned to practitioners at those facilities.

A group of patients' rights advocates submitted comments suggesting additional protections for patients assigned to an ACO. "First, the physician or health care provider's primary fiduciary responsibility should be to the patient and not the ACO," they said. "In other words, the physician can counsel the patient and refer the patient out of the ACO without fear of retaliation."

They also said that ACO staff members who perform auditing and quality assurance should be employed by and report directly to the ACO boards.

Those groups included Health Watch USA, the Citizen Advocacy Center, the Cautious Patient Foundation, and Mothers Against Medical Error.

Another group representing patients, Dialysis Patient Citizens, expressed concerns that the proposed rule might give ACOs an incentive to exclude patients with costly chronic conditions like kidney disease.

For example, the group said it was concerned that specialists and non-primary care providers can't form ACOs, as nephrologists often serve as the primary care providers for people with end-stage renal disease and are in the best position to coordinate care.

Families USA Comments on ACO Proposed Rule (pdf)

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