Value-Based Care News

How CMS Could Boost Operation of Accountable Care Organizations

While there has been positivity around the development of accountable care organizations, certain medical associations do find gaps in the current regulations.

By Vera Gruessner

Accountable care organizations (ACOs) have become a more mainstream method for improving care coordination and the quality of medical services while providing an opportunity for reducing wasteful spending. For instance, St. John Health System’s accountable care organization recently partnered with the insurer Aetna in order to boost care coordination, better track data through medical claims analysis, and measure performance standards in order to strengthen overall quality.

Medicare Shared Savings Program

“We are working with providers to build sustainable models of health care that deliver better outcomes and lower overall costs,” Jason Keibler, Head of Aetna’s Oklahoma network, stated in a company press release. “Together with St. John Health System, we will be moving away from a focus on quantity of services to one that offers quality care at a more affordable price. The outcome can be a better patient experience, a healthier community and improved access to the right care at the right place and time.”

While there has been a fair amount of positivity around the development of accountable care organizations, certain medical associations do find gaps in the current regulations surrounding the operation of ACOs. In a letter to the Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt, a number of different organizations including the American College of Surgeons, the National Association of ACOs, and the American Medical Association offered a number of recommendations for improving the current Medicare Shared Savings Program.

The letter was sent during the public comment period with regard to the proposed rule Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Revised Benchmark Rebasing Methodology, Facilitating Transition to Performance-Based Risk, and Administrative Finality of Financial Calculations.

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  • The multiple medical associations support the CMS proposal that regional cost data is implemented into the creation of ACO benchmarks. In particular, the letter urges CMS to offer accountable care organizations choices when it comes to moving forward with new benchmarks that include regional cost data.

    In addition, the National Association of ACOs and other aligning organizations feel that CMS should not ACO beneficiary populations to that of other ACOs, but to compare performance to fee-for-service Medicare beneficiary populations “by defining the reference population as assignable beneficiaries without ACO-assigned beneficiaries for all ACOs in the region.”

    Essentially, the letter recommends for CMS to change its proposed ruling by updating the meaning behind “the reference population to exclude all ACO-assigned beneficiaries.” While the organizations are behind CMS when it comes to the calculation of regional expenditures, they are unsure about the use of state-level data when measuring regional ESRD spending.

    The letter encourages CMS to allow accountable care organizations to use  Metropolitan Statistical Area (MSA), Hospital Referral Regions (HRRs), and/or Geographic Practice Cost Indices (GPCIs) localities to model their ESRD cost data.

    “The Affordable Care Act specifies quality as a primary goal for the ACO program. Yet, an ACO that achieves CMS’s established quality performance levels is not rewarded and is merely prevented from forfeiting the shared savings payments it has earned. There is no direct financial reward for improving quality of care, and there is no penalty for poor quality unless the ACO has generated savings. This lack of reward can be a strong disincentive for ACOs to invest in quality improvement. In contrast, MA plans are rewarded with higher benchmarks for higher quality, which leads to an asymmetry between MA plans and ACOs,” the letter stated.

    “We urge CMS to use a similar approach for MA and MSSP [Medicare Shared Savings Program] by properly rewarding ACOs for high quality. It is important to recognize high quality performance compared to established measure thresholds as well as to recognize – and reward – quality improvement relative to an ACO’s previous performance. Therefore, to emphasize and reward above average quality performance or improvement, we urge CMS to provide on a sliding scale up to 10 percentage points of additional share savings.”

    As CMS continues to innovate and incorporate proposals when updating the Medicare Shared Savings Program and the rules surrounding accountable care organizations, it is clear that physician participation in ACOs is rising and will likely continue to be a strong part of healthcare reform. The healthcare industry strives toward achieving the Triple Aim and the operation of ACOs may play an imperative role in improving the quality of patient care, bettering health outcomes, and reducing excessive spending.