Some of the nation's most prominent healthcare groups are telling the Obama administration that its proposals to soften the financial risk involved in Medicare accountable care contracts won't be enough to make sure U.S. hospitals and doctors keep signing up.
The central concession would be to give participants more time in the program before they have to accept the risk of penalties along with the opportunity to earn bonuses based on the quality and efficiency of the care they provide.
But major healthcare trade groups including the American Medical Association and American Hospital Association, and major players in the Medicare Shared Savings Program for ACOs said the bonuses are too difficult to obtain or too small to be worth the required investments and risk.
Medicare has aggressively expanded the program since 2012 and in late January said half of Medicare's spending that isn't for managed care would be under accountable care and other new payment models by 2018.
In December the CMS proposed changes to the accountable care program, which now includes about 400 organizations, and comments were due Friday.
The proposals include welcome improvements, the American Hospital Association wrote, but the organization also questioned "whether the other proposals go far enough to correct misguided design elements that emphasize penalties rather than rewards.”
The Shared Savings Program assigns a group of patients to an accountable care organization—a group of healthcare providers—and awards bonuses based on the group's performance against targets for costs and quality.
Those bonuses are too difficult to achieve, the AHA and other organizations wrote. They are calling for more concessions that would give ACOs greater potential to earn bonuses.
Medicare proposals to encourage ACOs to accept risk for potential penalties with the promise of greater bonuses will unfairly penalize those hospitals and medical groups that are least prepared to make the shift, the hospital association wrote.
The CMS proposal would relax a rule that would have required ACOs to accept penalties after three years in the Shared Savings Program. However, it would also reduce bonuses for ACOs that choose to defer that risk. The AHA, AMA and 16 other organizations said ACOs that wait longer to accept penalties should not see smaller bonuses, which are 50% of savings they are qualified to keep. “If anything, 50% is too low to incentivize the care change that will lead to success,” the American Medical Association and other groups wrote in a joint letter.
The adjustments to bonuses based on quality should be revised, too, the groups wrote. Quality scores should reward top performers with additional payments. As it stands, weaker performance against quality benchmarks means an ACO gets to keep a smaller share of the savings it earns. But strong performance does not boost the financial return, and there is no pure penalty for poor quality.
The groups also called for more flexibility for ACOs to select between two types of thresholds that savings must reach before ACOs can earn bonuses. The thresholds are intended to prevent ACOs from claiming savings from annual fluctuations in health spending that occur regardless of efforts to better manage the cost of care.
And they said the CMS must change how it identifies which patients are assigned to an ACO. They called for the agency to identify patients at the start of the year without making revisions that retrospectively change the patients against whose care the network's performance is measured.
One proposal that generally received positive feedback was a new option for the most sophisticated ACOs to earn bigger bonuses if they accept the potential for larger penalties. But the groups said the CMS should also consider allowing these ACOs to operate under global budgets.
Trinity Health, one of the largest U.S. health systems, and Universal American, an insurance company with the biggest footprint in the program, were among those that signed the joint letter. Trinity, led by former CMS Innovation Center chief Dr. Richard Gilfillan, in late January announced a private-sector effort to boost health spending under accountable care and bundled payments. The participants pledged to move 75% of their business into such contracts by 2020. Universal American has walked away from some of its Medicare ACOs, but its CEO said he remains bullish on the initiative.
Follow Melanie Evans on Twitter: @MHmevans
