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Is 'accountable care' in trouble?

August 25, 2011
by Dennis Grantham, Editor-in-Chief
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After critics hammered initial ACO rules, will the feds’ rewrite succeed?

Central to the success of national healthcare reform is the creation of accountable care organizations (ACOs). Proponents see ACOs as well-equipped, integrated, multi-specialty healthcare delivery systems that have the resources and the ability to so rigorously control the quality, cost, and delivery of outcomes that they are willing to bet—in this case with Medicare—on their ability to deliver superior outcomes.

“ACOs are all about fostering more integration in the system by driving key elements—hospitals, primary care, specialists, FQHCs, CMHCs—together,” says Ron Manderscheid, PhD, executive director of the National Association of County Behavioral Health and Developmental Disabilities Directors (NACBHDD). “ACOs are seen as the primary social unit of the new healthcare system,” he adds, noting that they are seen as the foundation on which other innovations, such as specialized “health care homes,” will be built.

Though the Center for Medicare and Medicaid Services (CMS) retains the goal of seeing 100 ACOs established nationwide by January 2012, results of its Physician Group Demonstration Program, which engaged 10 large physician organizations from April 2005 to 2010, produced mixed results, according to a report published by the New England Journal of Medicine. After four years, only half of the participating groups earned enough Medicare “shared savings payments” to recoup the average $1.7 million startup costs for the ACO program.

“What’s fascinating,” says Julie Clements, deputy director for regulatory affairs in the Government Relations Department at the American Psychiatric Association (Washington, DC) is that, “within a few weeks of the issuance of the proposed rule for ACOs (CMS-1345-P), all 10 of the pilot groups said that unless the proposed rule substantially changed, they would not participate in an ACO.”

That proposed rule generated a torrent of criticism in the public comment period that closed on June 6. Between now and the expected release of an Interim Final Rule (IFR) for ACOs this fall, CMS Director Don Berwick and his colleagues have a lot of work to do if the concept of Medicare ACOs are to succeed. This is especially true because participation is voluntary.

During the public comment period, critics of the ACO proposal cited high up-front costs, high administrative burdens, concerns about how patients (and associated savings or losses for care) would be assigned and allocated, high EHR utilization requirements (50 percent in year one), and a long list of year-one quality requirements—65 in all.

“If I’m a psychiatrist, how am I going to track those 65 quality measures? And, can I meet the EHR use requirement?” Clements asks. “That’s a very high threshold to cross in just one year.”

Manderscheid also took issue with the performance measures. “If you look at the performance measures attached to ACOs, you’d never know that people had behavioral health problems.” Yet, he adds, “there are a huge percentage of Medicare beneficiaries suffering from depression.”

While all stakeholders in the ACO debate await the issuance of an interim final rule for ACOs this fall, there is some agreement about what an ACO would look like. Clements says that ACOs are to be “anchored” around a group of primary care specialists who would be “exclusive” to that ACO, with a wide range of specialists—including behavioral health providers—available on a contract basis.

Once established, ACOs would assume the risk of caring for large groups of patients (the pilot required 5,000 minimum, with a 30 percent Medicare population) and agree either immediately, or over a period of years, to share risks with Medicare. ACOs who perform well on regional benchmarks for care quality and cost would receive a substantial cut of “shared savings” (perhaps 80 percent) from Medicare.

Behavioral health advocates note that ACOs that affiliate with federally qualified health centers (FQHCs), Rural Health Centers (RHCs), Community Mental Health Centers (CMHCs), or organizations that include other high-needs patients (including those with dual diagnoses), can qualify for an additional 2.5 to 5 percent boost in payments from Medicare.

Advocates are watching the evolution of the Medicare ACO regulations closely, hoping not only that their comments for stronger behavioral health provisions will be heeded by CMS, but that the concept of ACOs will catch on among Medicare providers. Medicare ACO success will not only pave the way to success for a yet-to-be-introduced Medicaid ACO program, but bring person-centered health homes closer to reality for those with serious behavioral health concerns.

“If you’re going to have health homes that work, you have to have some form of organization to drive them,” says Manderscheid. “If there are not ACOs, health homes don’t happen.”