ACOs mixed on Medicare Shared Savings Program final rule

Photo of Hackensack University Medical Center from Facebook.

Participating healthcare providers say a proposed final rule for accountable care organizations taking part in the Medicare Shared Savings Program shows officials are listening to concerns, but many say it doesn't go far enough.

On one hand, ACOs still getting their feet wet got some clarification. But for providers that are more seasoned, the June proposal by the Centers for Medicare & Medicaid Services left them wanting more.  

Joy Jacobsen, compliance contact at Kansas Primary Care Alliance LLC, affiliated with the University of Kansas Hospital, said streamlining the operational process for ACOs in the program is a positive move forward.

The rule helped clarify certain aspects of the program including data-sharing, beneficiary assignment and methodology used for establishing financial performance.

[Also: CMS finalizes rules for Medicare Shared Savings Program ACOs]

The alliance is one year into their efforts in Track One and Jacobsen is admittedly still learning the ropes. For her, though, operations have been a challenge.

James Gutierrez, MD, an internal medicine doctor at the Cleveland Clinic, agreed.

"It is fairly prescriptive and there is a large administrative burden," he said. "It would be good to spend less time meeting a lot of rules and more time in improving care delivery."

Overall, he said the rule isn't "earthshaking" but the tweaks made show that CMS is working to develop the program based on experience and feedback from providers.

Aside from administrative changes, the potentially biggest impact will be the modifications to the "tracks" in which ACOs take part.

The tracks establish how much risk an ACO will take on as well as the shared savings they will reap. Track One currently returns 50 percent of shared savings, but incurs no risk to providers. Track Two provides a greater share of rewards as providers take on some risk. The final rule created a new third track that allows participants to take on higher risk in order to see bigger rewards.

Cleveland Clinic is in its first year of the program and is in Track One. While they are comfortable there, Gutierrez said a broader range of options for providers is a good thing.

"We are all at different places in terms of the risk we are managing or what we are comfortable with," he said.

One aspect of the new rule that Gutierrez found disappointing was that some changes apply only to Track Three ACOs. For instance, some waivers – including the waiver requiring a 72-hour hospital stay before covering skilled nursing – are only available for Track Three groups. Also, beneficiaries are assigned on a prospective, instead of retrospective, basis only for Track Three providers.

"The more certain we can be of our population, the better we can manage them," Gutierrez said.

Most ACOs are currently in Track One and will not benefit from these changes, and only one major modification in the new rule is focused on this group. Previously, Track One ACOs were forced to move to the second track after their three-year stint in Track One. The new rule allows providers to re-up for Track One if they feel it's best for their organization.

For some ACOs, like Hackensack University Hospital, this change was the difference between staying in and dropping out of the program.

When they analyzed their patient population, it was clear that bundled payment systems and Medicare Advantage were better programs for Hackensack, said Internist Morey Menacker. The organization – which was one of the most successful ACOs in the program in the nation – barely broke even on their efforts.

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Menacker said CMS calculated their shared savings at $10.5 million, of which they would receive half. But the program, however, cost an excess of $5 million to build, he said. They hired staff and care coordinators to manage patients and purchased population-based software to follow and manage patients.

"We made an effort to change the way our practice was being performed and then to turn around and find out that with all work done, the savings went to expenses is frustrating," he said. 

Menacker said he would have liked to see the beneficiary attribution at all levels, calling the current model "capricious at best."

For instance, one of the primary care providers in his group does mostly hospital consults. Although the patient saw an oncologist regularly, that provider was not part of an ACO. Thus, the patient was attributed to the visiting primary care and the high-cost individual was borne on his ACO.

The final rule "left a lot to be desired," Menacker said. 

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