AFTER FURTHER REVIEW
Conferring over provider complaints, Medicare officials ease up on ACO rules to encourage participation
FDA looks at overseas trials
Medicare officials sweetened the deal intended to encourage hospitals and doctors to take on risk in exchange for rewards for high quality and efficient care.
The CMS issued a final rule last week establishing a framework for accountable care organizations, and it promises more money and fewer measures of quality in direct response to heavy criticism of draft regulations from providers and policy experts (June 6, p. 6).
The regulations reduced the number of quality measures by about half and increased the financial incentives for providers. The changes won preliminary praise from major trade groups and professional associations, which moved quickly to digest hundreds of pages of rules from multiple federal agencies, including the CMS, the Federal Trade Com- mission and the Justice Department.
Such significant changes underscored the Obama administration’s desire to salvage what many policymakers hope will be a promising model to overhaul healthcare financing and delivery. Under accountable care, providers that meet certain quality and cost-saving targets are eligible for a share of the savings.
“This is very much an attempt to resurrect or rescue an initiative that wasn’t doing well,” said Paul Ginsburg, president of the Center for Studying Health System Change. Ginsburg lamented financial incentives in the March proposal as “somewhat stingy,” which he said he believes the final rule attempted to remedy.
Medicare would save up to $940 million over four years under projections for the final rule. The agency’s prior proposal would have saved Medicare up to $960 million over three years.
More generous bonuses contributed to the smaller federal gains under the final rule. Bonuses paid to providers could climb as high as $1.9 billion.
Federal officials should worry less about how much Medicare can save during the early years of accountable care, Ginsburg said, and focus more on raising interest with stronger incentives. Officials always understood the trade-off between federal savings and provider incentive to form ACOs, he said, but apparently “guessed wrong” the first time around.
“Realistically, it’s an experiment,” Ginsburg said. “You need participants.”
Henry Ford Health System in Detroit will not be among them. The health system withdrew an application through the Center for Medicare and Medicaid Innovation for an advance guard of ACOs, dubbed pioneers. Instead, Henry Ford will concentrate on a federal primary-care coordination incentive program and the federal pilot of bundled payments, said Dr. Mark Kelley, executive vice president and chief medical officer for the health system and CEO of Henry Ford Medical Group.
Kelley called the rule changes a “good start” but said the health system decided even before their release that bundled payments would better serve the system’s coordination efforts.
Agreements for Medicare ACOs and a newly unveiled advanced-payment program, which will provide upfront financing for small accountable care networks, will begin next year on April 1 and July 1.
Medicare officials readily acknowledged the industry’s outcry over the proposed financial incentives and potential costs prompted the rule’s modifications.
HHS’ final set of ACO regulations spanned 696 pages. A strong outpouring of comments prompted changes.