Now Is Not the Right Time for Oncology Practices to Jump on the ACO Bandwagon

December 2011, Vol 1, No 4 - Cancer Center Business Summit


Chicago, IL—The accountable care organization (ACO) concept is in the early stages of being defined, our oncology practices should keep their options open, “and remain independent while the dust settles,” said Matthew Brow, Vice President of Communication, Government Relations and Public Policy at McKesson Specialty Care Solutions/US Oncology at the Cancer Center Business Summit.

ACOs and the Medicare Shared Savings Program (MSSP) are intended to reduce healthcare spending by realigning incentives for physicians who manage care and better coordinating care across settings.

A sustainable, value-based reimbursement approach for the care of Medicare beneficiaries (instead of a volume-based approach) is the goal of ACOs and the MSSP, according to Mr Brow.

An oncology-led ACO is not permissible under the proposed MSSP rules; under MSSP rules, only patients of primary care physicians are included in the program; a minimum of 5000 Medicare beneficiaries are required for ACO participation, and oncologist-only practices cannot meet this minimum. It is permissible under the Medicare Pioneer ACO program, but no one applied in time.

The current ACO model, which revolves around primary care physicians, provides little incentive for oncologists to join. “If the only way for a patient to be assigned to an ACO is through a primary care physician, and patients are only assigned to a primary care physician who provided the plurality of evaluation and management services to a patient, oncologist-managed pa – tients don’t count toward targets or performance,” Mr Brow said. “There is significant pressure to pay for value, and the private side is leading the way in my view.”

The legislative framework for ACOs sets benchmarks for expected Medicare Part A and Part B spending for beneficiaries based on historic cost in the 3 years preceding an ACO contract, adjusted annually for the trend in Medicare cost growth, said Michael L. Blau, Esq, Chair at Venture Health Practices, Foley & Lardner LLP. A comparison of current to historical costs, adjusted for inflation, does not work in oncology, according to Mr Brow, because expenditure on cancer drugs is expected to increase by more than 10% annually, and “new technology and generics are significant in oncology and mandate concurrent controls and benchmarks versus historical.”

Most practices are opting not to participate, expecting no rate of return on their investment, according to Mr Blau. In addition, several proposed ACO regulations are of concern to oncologists:

  • A more limited role in ACO governance.
  • None of the 65 quality measures are specific to oncology.
  • Meeting quality measures is the determinant of shared savings.

Oncology patients carry higher costs and therefore are less likely to contribute to cost-savings. Further – more, ACO cost and risks are substantial, and there is no assurance that oncologists will be allocated a fair share of any savings realized, said Mr Brow. “Each ACO must specify its method of allocating and distributing shared savings dollars, and all specialties do not need to be included or treated equally.”

A 3-year lock-in is also required, during which time a practice has to incur downside risk. Before all is settled, oncologists are likely to have additional value-based options with Medicare, so a wait-and-see ap – proach is advised, said Mr Brow. “Don’t jump in if you’re an oncology practice.”

“The ability to deliver and document high-quality, cost-effective care is vital regardless of whether one joins an ACO,” he said. “Work with an organization that leverages years of investment in technology and physician-driven pathways.”