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ACO Final Rule: Enough to Entice the Oncology Team?

February 2012, Vol 2, No 1
Sydney Abbott, JD
Policy Coordinator, Association of Community Cancer Centers

The result of the November 17, 2011, hyperpartisan Congress is policymaking stuck firmly in division and gridlock. Many healthcare issues remain in contention, including key components of the Patient Protection and Affordable Care Act (ACA). Whereas some legislators have tried to mitigate—or even eliminate—the ACA, their efforts have been unsuccessful within the 2 chambers of Congress. The US Supreme Court has agreed to rule on the constitutionality of the individual mandate in 2012, and we will have a better idea of the muscle of the ACA once its final decision is reached. Until then, implementations of various aspects of the ACA are moving forward, such as insurance reforms and the establishment of accountable care organizations (ACOs). 

The Centers for Medicare & Medicaid Services (CMS) recently released its final rule on ACOs to mixed reviews. CMS appears to have read the 1300 public comments carefully, because it made considerable improvements to the final rule. Although the final rule is a dramatic improvement to the proposed rule, provider groups such as the Association of Community Cancer Centers (ACCC) are still unsure whether the rule goes far enough to entice specialists to join an ACO.

CMS’s final rule addresses several obstacles that individual practices and cancer programs faced in forming or joining ACOs. CMS had proposed 2 entrances into risk-sharing during the first 3-year cycle of the ACO. However, both entrance models created an important cost-related barrier to enter an ACO, by assuming a 2-sided risk for every participant during the first cycle. Despite significant start-up costs, in the proposed rule oncologists and other specialists could be required to make payments back to CMS for not meeting set benchmarks. It is fortunate that CMS listened to what ACCC and other groups said in the comments and altered the final rule to include a truly 1-sided model for risk-sharing in the first 3 years. A 2-sided model is still available, but we do not expect that many ACOs will elect to undertake a greater risk, even if there is a potential for greater rewards.

CMS also surprised us by reducing the number of reportable quality measures from 65 down to 33. This is a welcome change. The greater the number of quality measures to report, the higher the barrier to entering an ACO, because greater preparation is required of each ACO participant. Instead of requiring all 65 quality measures at the outset, 33 will be reported initially, with the remainding 32 to be phased in over 3 years.

CMS’s final ACO rule also re-duced the electronic health record  meaningful user requirement. CMS will allow ACOs to build up to the proposed 50% meaningful user requirement over the first 3 years of the program. 

Probably the most significant change from the proposal to the final rule is the shift from retrospective to prospective assignment of beneficiaries. In its comments to CMS, the ACCC noted the difficulty that retrospective assignment would bring by prohibiting providers from planning for their responsibilities. Retro­spective assignment would allow CMS to notify an ACO as to which patients that ACO was responsible for after the closing of the ACO cycle. Providers, therefore, would be left in the dark about which patients counted toward meeting cost and quality thresholds that are required to achieve shared savings under an ACO. In the final rule, CMS changed assignment to a more prospective model. Now, CMS will notify participating providers on a quarterly basis as to which patients are likely under their responsibility. This will allow providers greater planning and will help them to take a more active role in the quality improvement and cost-containment goals of the ACO.

The ACCC believes that all these changes in the final ACO rule will help reduce barriers to entry into an ACO. Still, it remains unclear if the changes are enticing enough to encourage oncology providers to participate. ACO-related expenses re­main very high. CMS expects start-up costs to range from $29 million to $157 million, but many provider groups anticipate even higher initial costs, with annual operating costs expected to be at least $60 million.

ACCC’s members are also concerned about where they fit into the equation—ACOs remain primary care practitioner–centered. The ACCC commented on the possibility of an oncology-centered ACO, but CMS did not address that option in its final rulemaking. Oncology patients are typically much more expensive to care for than a patient without a cancer diagnosis, and it remains unclear how those patients will affect an ACO’s bottom line in meeting quality and cost thresholds.

The question remains unanswered whether ACOs will chill research. Oncology relies heavily on the knowledge gleaned from clinical trials, but research is extremely expensive, and the quality thresholds set for ACOs could be too costly or too burdensome. 

Finally, many oncology practices and cancer programs are already running high-quality, low-cost facilities, and the additional improvements required to earn shared savings may be difficult for them to achieve.

There are certainly many considerations for oncology providers to weigh in when making the decision to participate or pass on the ACOs. The final CMS rule did make signif­icant improvements from its pro-posal, but is it enough to entice the on­cology team? The answer is just one more unknown in the world of ACOs.

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