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MedPAC Weighs Hurdles, Benefits to ACOs

By Kerry Young, CQ HealthBeat Associate Editor

January 16, 2014 -- A key panel of congressional advisers wrestled last week with how to make the most of accountable care organizations (ACOs), which are intended to improve the health of patients while squeezing out waste in medical care.

"We have moved away from consensus compared to our last conversation," said Glenn Hackbarth, the chairman of the Medicare Payment Advisory Commission (MedPAC).

He called this a "healthy sign" of how seriously panelists are considering any potential suggestions, such as whether ACOs might be asked to share in potential financial risks through a two-sided model, instead of only sharing savings, a one-sided model.

Still, the panel needs to quickly form a consensus in order to aid Medicare as it works on a new rule regarding shared savings through the Medicare Shared Savings Program for ACOs, he said.

"We do have a fixed time allotment to sort of come up with a view for the MSSP proposed rule, which will come out sometime in the next few months," Hackbarth said. "We have got some work to do."

ACOs are intended to give doctors, hospitals and other providers of medical care new incentives to shift away from the traditional Medicare fee-for-service model, and seek a more coordinated approach to health care that experts say could result in lower costs and better results.

MedPac staff recently raised concerns about a potential backlash from beneficiaries because people whose care falls under ACOs don't share in any savings if the organization succeeds in leveling out costs.

Rita Redberg, a panelist and a cardiologist at the University of California at San Francisco, noted that people whose care is arranged by ACOs may not see the increased coordination of care as a benefit. Although it's not always true, many people have the perception that more medical services mean better care, she said.

"The ACO doesn't have that kind of culture, but right now, the way it is structured, there isn't a lot in it for the beneficiary," she said, adding that it might help if people in ACOs could gain greater ease in communicating with their doctors.

MedPac members also noted that, as the system now stands, there are some obstacles to widespread participation in the ACOs.

Hackbarth said that ACOs might add tasks for which doctors are not compensated.

"Under the Medicare payment rules, Medicare doesn't pay for the email," he said. "It doesn't pay for the phone calls. So I have got to extort my physicians to do these things that they are not getting any compensation for."

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