ACO Rules Under Fire

By Ken Congdon, editor in chief, Health IT Outcomes

Questions and concerns surrounding ACOs (Accountable Care Organizations) have been well documented in the healthcare industry ever since the first healthcare reform proposals started making the rounds on Capitol Hill. Healthcare leaders question how the system will function during that "in-between period" as it moves from a pay-for-service to an ACO model. Concerns also abound regarding the lack of financial incentives for providers to transition to an ACO. More fuel was added to the ACO fire in recent weeks when CMS (The Centers for Medicare and Medicaid Services) released its proposed ACO regulations. These rules have been met with a great deal of opposition by some key associations in the healthcare field — namely AMGA (American Medical Group Association) and CHIME (The College of Healthcare Information Management Executives).

"The proposals are overly prescriptive and operationally burdensome, rendering the incentives too difficult for ACOs to achieve in order for the voluntary program to be attractive to potential participants," AMGA explained in a statement. You can read the entire AMGA statement to CMS here.

AMGA supported this statement with results from a member survey it conducted. In this survey 93% of the respondents indicated that "they would not participate in the ACO program unless the requirements in the final rule reflect major modifications to the proposals. In their current form, the requirements would render the ACO program a missed opportunity to inject value and accountability into the delivery system."

Data Sharing And MU Alignment Rules Called Into Question CHIME, on the other hand, took particular issue with the data sharing and meaningful use alignment rules proposed by CMS. For example, the CMS regulations allow patients to elect not to share their beneficiary claims data electronically. CHIME, whose 1,400 members represent CIOs and other top information technology executives at many of the nation's largest hospitals, believes the foundations of e-enabled healthcare begins with accurate information exchange and allowing this data to be withheld would compromise the underlying objective of an ACO.

"If beneficiary claims data are withheld, the ACO's ability to improve individual beneficiary health, as well as achieve the desired shared savings, could be compromised," said CHIME in a statement to CMS. "We believe that allowing ACO patients to opt out of data sharing, while maintaining their ability to see the primary care physician participating in an ACO, contraindicates efforts to provide accountable care."

CHIME recommended two possible alternatives to the data-sharing rule:

1. Patients that wish to opt out of claims data sharing should be required to see a primary care physician not affiliated with an ACO.
2. The ACO-participating primary care physician could continue to see the patient, but that patient's healthcare expenditures would not be taken into account in determining whether the ACO is eligible for shared savings or has incurred shared losses.

CHIME also disagreed with the proposed CMS requirement that 50% of an ACO's primary care physicians meet all Meaningful Use standards by the beginning of the second year of the ACO's agreement with CMS. While CHIME believes that functional information exchange and EHRs will be important components of an ACO, the association feels that ACOs should be allowed to make decisions based on business requirements, rather than prescribing Meaningful Use objectives as necessary to be a participant in an ACO. You can access the entire CHIME statement to CMS here.

While on the surface, these criticisms of the CMS rules may look dire for ACOs, there's still a great deal of hope and interest surrounding the concept. For example, I'm currently interviewing several hospital CIOs and CMIOs for an article on ACOs that will appear in a future edition of Health IT Outcomes. While many of these hospital leaders expressed their displeasure with the proposed CMS rules, most also voiced their belief that ACOs (as a concept) have the power to transform healthcare delivery for the better — both from a patient care and an economic standpoint. Many are also currently engaged in developing their ACO transition strategies. The comment period for the proposed CMS rules for ACOs is open until June 6, 2011. Hopefully, CMS will take the voice of the industry into account and make the proper adjustments to get the ACO movement back on the right track.

Ken Congdon is Editor In Chief of Health IT Outcomes. He can be reached at ken.congdon@jamesonpublishing.com.