Accountable Care Organisations (ACO) proposed rules spotlight physician-hospital alignment

Leadership in Health Services

ISSN: 1751-1879

Article publication date: 19 July 2011




(2011), "Accountable Care Organisations (ACO) proposed rules spotlight physician-hospital alignment", Leadership in Health Services, Vol. 24 No. 3.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

Accountable Care Organisations (ACO) proposed rules spotlight physician-hospital alignment

Article Type: News and views From: Leadership in Health Services, Volume 24, Issue 3

Keywords: Healthcare accountability, Quality healthcare, Heathcare performance management

For at least one analyst, there are plenty of details but not too many surprises in the sweeping 429- page proposed guidelines the Centers for Medicare & Medicaid Services (CMS) issued on accountable care organizations.

“The deliberate process they took to issue this two months after we expected it shows they were being very cautious,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions.

“They were very deliberate in the language. I’ve read it twice. The amount of effort they built into calibrating the quality metrics, the indices of the five domains, the waivers, the safety zones, the antitrust issues. They were pretty thoughtful about balancing all of those moving parts of what is a pretty complicated concept,” he says.

Keckley said that anyone who has been following the ACO movement would not be surprised to note that the overarching concern in the guidelines is physician-hospital alignment.

“You have value-based purchasing, and episode-based payments and avoidable readmissions, and the medical home, the ACO, physician quality reporting initiative and the physician self-referral language and you step back and see they are compelled by the vision of integrated systems,” he says. “That to me is the big cake here.”

Healthcare industry groups have offered guarded support for ACOs, but are still sifting through the details. America’s Health Insurance Plans, for example, has raised concerns that hospitals and ACO collaborations could forge monopolies for their service areas and dictate higher prices.

Keckley says the proposed guidelines attempt to deal with the “unforeseen.”

“I read carefully the discussion of antitrust safety zones, how primary service areas are defined, the 30 percent threshold,” he says. “The language in the guidance suggests that they have been very thoughtful about waivers and antitrust. And, they have maybe been cautious thinking about what will happen if commercial health plans piggyback the ACOs and use them as their contracting organizations. Does that consolidate power? Does it create cartels? I was impressed by the granularity of the language in that section.”

The American Hospital Association (AHA) has raised concerns that the guidelines might not adequately address clinical barriers among caregivers. Keckley says that by identifying the 65 measures in five quality areas – including patient safety, patient experience, care coordination, preventive care, and at-risk populations – the feds “are going as about as far as they can.”

“Clinical integration is really a loaded term because it means the doctors and hospitals have to work together and that is not easy,” he says. “So, it’s one thing to get the evidence and build the evidence-based guideline algorithms. It’s another thing to get everybody in one room and say ‘we all agree.’ I don’t think that is a shortcoming of the guidance as much as it is the history of our industry. It’s tough for organizations to work together.”

The American Medical Association (AMA) raised concerns that the capital requirements for ACOs might be too high for many physicians. “It’s a fair concern anytime you inject a change into the system as to the cost of implementing something new and where is that cost borne,” Keckley said. “I read explicitly that CMS is asking for guidance around several areas. This is one of four identified as an area looking for input.”

Keckley says he expects CMS will tinker with the guidelines, but he’s not sure what sorts of changes might occur before the January 1, 2012 implement date. “I can’t imagine they will alter quality reporting. In year one its pay for reporting, not pay for performance per se. The model for the shared savings and risk, that threshold in the one-sided model that seems to be a range, they will have to be a little more explicit there,” he said. “But this is A not much of a surprise to most of the folks who’ve been watching, so I don’t think the deadlines impose major constraints unless you’ve convinced yourself we aren’t going down the ACO path.”

It’s important to remember, Keckley points out, that the program is voluntary.

“I don’t think that means you’re not going down the physician-hospital integration path. It means you may not apply to be an ACO,” he says. “If you chose that route, no harm no foul. Folks will chose other routes to physician-hospital alignment. And if you’re choosing to go the ACO route this answered a lot of questions.”

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