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Survey Shows Healthcare Providers Preparing for ACO Era as Government Announces New Incentives for Participation in Accountable Care Organizations

05.19.11

Nearly two-thirds of respondents to a recent survey say they have already taken steps or plan to take action to prepare for participation in Accountable Care Organizations, the joint ventures established by the healthcare reform legislation in which doctors, hospitals and other providers coordinate patient care. Survey respondents, however, also identified serious obstacles to ACO participation such as access to capital and physician shortages. The Waller ACO Survey, conducted on behalf of the law firm Waller Lansden Dortch & Davis, LLP by Modern Healthcare's Custom Research team, explored the challenges ahead for ACO participants including identifying costs of creating and operating an ACO and funding strategies.

The survey highlighted the critical role of hospital-physician alignment. Nearly two-thirds of respondents cited increased alignment with primary care physicians as a step taken in preparation for ACO participation, and three out of five respondents cited alignment with physicians through employment. With respect to obstacles to ACO participation, the lack of a sufficient number of primary care physicians and specialists ranked second and third among "very serious obstacles" to participation behind only access to capital.

Underscoring the concerns of the Waller ACO Survey respondents, CMS last week received highly publicized objections to the ACO regulations proposed in March. The American Medical Group Association called the Proposed Rule "overly prescriptive, operationally burdensome," and stated that "the incentives are too difficult to achieve to make this voluntary program attractive" and that 93% of its members would not participate under the proposed rules. The following day, CMS Administrator Donald Berwick received a letter from the Physician Group Practice (PGP) Demonstration Program's ten multi-specialty groups citing "serious reservations about the economics and the complexity of the Medicare Shared Savings Program/ACO NPRM."

While not directly responding to these and other concerns over the proposed ACO regulations, on May 18th, the Department of Health and Human Services announced three new initiatives to encourage providers to participate in ACOs. The Pioneer ACO Model will be available this summer for providers that already coordinate patient care across care settings. CMS stated that the new model will enable "these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program." The Center for Medicare and Medicaid Innovation is to release a request for applications for this program. CMS announced that it is requesting input on an Advance Payment ACO Initiative that would allow "certain ACOs participating in the Medicare Shared Savings Program access to a portion of their shared savings up front" to provide assistance with funding the start-up of the ACO. CMS also announced Accelerated Development Learning Sessions, education programs offered at no cost to "help providers learn what steps they can take to improve care delivery and how to develop an action plan for moving toward better-coordinated care."

Waller will continue to monitor developments regarding ACOs. See our earlier ACO bulletin, as well. If you have any questions regarding ACOs, please contact David Head, Nora Liggett, Kim Harvey Looney or any member of Waller's Healthcare Department / 800-487-6380.

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