Additional ACO Insights: Won't Make Money, Physician Leverage, Year-to-Year Patient Attrition & It's Not the PCPs, It's the Hospitals and Specialists

"What about concurrent versus prospective
risk adjustment?"

The Disease Management Care Blog listened in on the Opal Events' "CMS ACO Regulations Debriefing" webinar that was held as a follow-up to its Austin Texas conference.  The speaker confirmed much of the DMCB's darkly suspicious bloggery, but there were lots of additional and noteworthy insights:

It's the providers that are "participating" in ACOs, not patients. Patients aren't really "assigned" to any ACO, but their data are.

There's a reasonable chance that the January 1, 2012 start date will have to be delayed.

Why would a provider organization even want to be an ACO? It could be because it wants to be better positioned for the eventual demise of fee-for-service payment systems so it can take on risk. Or, this could be a way to achieve greater clinical and economical integration. Or maybe it just believes this is the right thing to do. While all of these fit with CMS' proposed ACO regulations, wanting to "make a lot of money" is a lousy rationale. That's because the ultimate point of the program is to have millions in efficiency and quality bonuses make up for the loss of millions in billing revenue combined with the investment of millions in care and data management systems.

Speaking of provider participation, it doesn't appear there is anything in the proposed regulations to keep them from abandoning the project midway through the contract period.  The DMCB foresees this leverage being used not only if there is impatience over the return on any financial rewards, but if there is dissatisfaction with the ACO's leadership. 

It's not uncommon for up to 25% of Medicare beneficiaries to switch providers (and health systems) from year to year.  That's why CMS' proposed "retrospective attribution" is both good and bad news.  The good news is that the participating organizations will only be held retrospectively accountable for the patients that were actually cared for in the system.  The bad news is that risk adjustment will be calculated off a baseline year using a population is likely to change considerably by the time the attribution is performed and the results are tabulated. 

While a strong primary care network is important, the economics will really depend on how well hospitals deal with "never events," hospital acquired conditions, readmissions, preventable admissions and cheaper alternate levels of care (like 23 hour stays, avoiding the intensive care settings and transferring patients to skilled nursing facilities instead of rehab centers). In addition, it will be up to the specialists to opt for more conservative (and less remunerative) treatment options.

Any communication from providers to patients about the "ACO" will need to be approved in advance by CMS.  So, if in the name of efficiency and quality, a physician wants to encourage his or her patients to contact the clinic in lieu of going to an emergency room, that letter may have to be submitted to CMS for their review.