Skip Navigation LinksHome > May 25, 2011 - Volume 33 - Issue 10 > Concerns about CMS ACO Proposal
Oncology Times:
doi: 10.1097/01.COT.0000398789.68653.48
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Concerns about CMS ACO Proposal

Butcher, Lola

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After reading the federal government's proposed rules for accountable care organizations, the oncology community has arrived at a quick consensus of how to proceed.

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Step 1: Try to get the Centers for Medicare & Medicaid Services to make significant changes in the final rule that will be published later this year.

Step 2: Make an end-run around CMS's proposal to prove that other delivery and payment reform ideas will work better for oncologists.

“Frankly, if you look at the rule itself, you wonder how oncology fits in,” said Ted Okon, Executive Director of the Community Oncology Alliance. “That reinforces something that I think we all know, which is that the government really doesn't know what to do with cancer care.”

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Why the ACO Rule Matters to Oncologists

The government does, however, know what it wants to do with primary care. The proposed ACO rule is written with primary care physicians in mind, giving them more responsibility for coordinating high-quality, low-cost care and the opportunity to make more money for doing so.

That is why Cary Presant, MD, a hematologist/oncologist at Wilshire Oncology Medical Group in Los Angeles, sees oncologists so eager to learn about the ACO movement.

“Assuming that the ACOs do, in fact, come to fruition, it is very likely that within every community, there will be one, two, or three ACOs that are dominant. And if oncologists wish to continue to treat the Medicare patients who belong to the participating primary care physicians, then they will have to be participating with an ACO,” he said.

More than 350 oncology professionals dialed in to an April conference call about ACOs sponsored by the Association of Community Cancer Centers. Matt Farber, MA, Director of Provider Economics and Public Policy, said that shows oncologists recognize that health care delivery systems—and payment—are changing.

“Even if they are not ready to participate in an ACO now, these types of models are going to continue moving forward over the next three, five, 10 years,” he said. “Oncologists need to be prepared as Medicare and private payers shift their reimbursement.”

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The Worry about Oncology Costs

Like most others in the oncology community, Mr. Okon is all for changing the way oncologists get paid.

But he is not convinced that the basic premise of the ACO model can be successfully applied to cancer care. The theory is that overall costs can be lowered by better coordination, which eliminates duplicate tests and emphasizes preventive services. In the case of diabetic and heart-failure patients, for example, proactive attention to and close monitoring of their conditions have been proven to reduce the need for expensive emergency and hospital care.

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But the ACO theory does not take into account an important reality of cancer care: the high cost of cancer therapies and the known fact that treatments are going to get increasingly expensive. That presents a problem, because the ACO will be successful only if it ratchets down the cost of care.

He pointed to two recently approved therapies—Sipuleucel-T (Provenge) at $90,000 for a three-month course of treatment for prostate cancer patients, and ipilimumab (Yervoy) at $120,000 for a four-dose regimen for melanoma patients—that would make an ACO's balance sheet look bad.

“When new technology comes out, the oncologist in an ACO runs the risk of breaking the bank for the entire ACO,” he said.

Dr. Presant, a past president of ACCC, wonders about a worst-case scenario for oncologists in an ACO: “Will medical oncology be the low-lying fruit for an ACO to focus on to save money? Is it possible that some ACOs, in an attempt to save money, will prematurely send patients into a hospice program, rather than allow them to have expensive specialty care which might produce better outcomes, but which will definitely challenge the benchmark the ACO is trying to hit for health care expenditures?”

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The Worry over Quality Measures

Unlike health maintenance organizations (HMOs), which emphasized cost control with little attention to quality, the ACO model proposed by CMS requires that each ACO focuses on specific quality measures (see box on next page). But none of those measures pertain to cancer care, leaving oncologists unable to prove the value of the care they provide.

“When new drugs come out of the pipeline that are more expensive, you're going to have [financial] pressure not to use those drugs, but yet, you don't have the quality measures to back you up that they are appropriate,” Mr. Okon said.

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Financial Implications

Mr. Farber says some ACCC members—integrated health systems that are already using electronic health record technology and are accustomed to quality-measurement and cost-containment initiatives—are well-positioned to thrive in the ACO model proposed by CMS.

“You're not going to find much argument that a place like Kaiser Permanente is ready-made to do this,” he said, identifying UPMC, a 20-hospital system in Pittsburgh, and Geisinger Health System, with more than 1,200 physicians and mid-level practitioners on its payroll, as other organizations ready to lead the ACO movement. “All they have to do is fill out the application and get the legal waivers and they will probably be all set.”

But the average oncology practice may find the costs associated with ACO participation too much to handle.

While the ACO rule does not require specialists to use EHR technology, the care coordination that is at the heart of the ACO model will probably not be possible without it. Additionally, all ACO participants will need legal assistance to make sure they comply with federal and state anti-trust laws.

“When you compare that with what the shared savings may be, a lot of members are going to look at this and say it may not be worth it to go down this road,” Mr. Farber said.

Dr. Presant points out that, because each ACO will determine how to distribute the “shared savings” among participants, it is possible that primary care physicians and hospitals might keep most of it for themselves.

Another possibility: An oncologist who provides high-quality care might be in an ACO with other physicians who do not and, thus, would receive no financial payout because the organization as a whole did not earn a good quality score.

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“Anyone going into an ACO must have good legal advice about the risks that may befall a participating oncologist,” Dr. Presant said. “With one's eyes wide open, it could be a very exciting development and a financially good one, or it could be a disaster. It will be an interesting next five years.”

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Other Ideas

Until CMS issued its proposed ACO regulations, US Oncology leaders had great hopes for the concept. That was based on their belief that, according to Congress's guidance in the Affordable Care Act, oncologists could form their own ACO.

During the course of patients' cancer treatment, oncologists essentially serve as their primary care physicians and manage the care provided by hospitals and others. Matt Brow, US Oncology's Vice President of Communications, Government Relations and Public Policy, spent months making the case to CMS that oncologists are in a position to provide the care coordination, improved outcomes, and cost savings that the ACO model is expected to generate.

CMS rejected that argument when it said ACOs can be led only by physicians in four primary care categories. In an email message, he said he will continue to argue his viewpoint in written comments to CMS.

“One of the areas where we will seek clarification is CMS's proposal to limit the formation of ACOs to physicians with the specialty designation of internal medicine, general practice, family practice, or geria-tric medicine even while proposing to attribute patients to an ACO on the basis of the physician that provided the largest share of primary care services to that patient. It is clear that the statute allows CMS to take a broader approach focused around physicians of any specialty who manage the care of Medicare beneficiaries.”

ACCC's Farber said that other oncology leaders share US Oncology's interest in the oncology-specific ACO and may ask the newly formed Center for Medicare & Medicaid Innovation to sponsor a demonstration project of the concept.

“What many in the oncology community are doing, in addition to raising concerns about the proposed rule, is pursuing this other track through the Innovation Center,” he said. “We are looking at practices that can get behind this to prove to CMS that this is a valid alternative.”

Meanwhile, Mr. Okon says that COA is exploring how other payment reforms, including episode-of-care payments and the medical home model (OT, Feb. 25, 2011), might work for cancer care.

“We are looking to be very proactive in developing indicators of quality and value, and we're putting a lot of work into that,” he said. “We need to take the lead and not be led.”

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Summary of Government's ACO Proposal

The government's proposed rule for accountable care organizations was eagerly awaited because many believe that the ACO concept may usher in a new way of delivering health care that financially rewards high-quality, low-cost physicians and hospitals for doing a better job than their run-of-the-mill peers.

The fact that the proposed regulations for the Medicare Shared Savings Program were not issued until March 31 also added to the anticipation. That leaves only nine months for gathering stakeholder comments, deliberating over their merits and publishing the final rule—in time for the first ACOs to contract with the government by Jan. 1, 2012.

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Two Things Now Clear

When the Centers for Medicare & Medicaid Services finally issued its proposal, two things became clear:

First, the government expects the ACO movement to start slowly, with about 75 to 150 ACOs in the first group that starts next January. Those organizations are expected to serve between 1.5 million and 4 million of the total 50 million Medicare beneficiaries in the country.

Secondly, CMS may not feel all that confident that its proposed rule has hit the mark. CMS-watchers say the proposal includes more specific requests for stakeholder comments than any they can remember.

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Comments Due by June 7

Comments are due by June 7, and some oncology leaders are hoping that they may convince CMS to change some of the provisions in the proposed rule.

At the moment, here is what CMS is thinking:

* An accountable care organization is a legal entity comprised of physicians, hospitals and other Medicare providers that operate under a “shared governance” framework. That means a hospital cannot establish an ACO and simply order physicians to comply with its wishes.

* The basic idea is that primary care physicians in an ACO will coordinate a patient's care to improve outcomes and lower costs. Specialists cannot lead ACOs and no specialty-only (such as oncology-only) ACOs are allowed. However, a specialist can be a member of more than one ACO; by contrast, primary care physicians can participate in only one ACO.

* By signing a three-year contract with the Medicare program, the ACO agrees to be accountable for the quality and cost of the total care of the Medicare patients assigned to it, even if some patients seek treatment outside the ACO.

* ACO physicians and hospitals will continue to be paid under the current fee-for-service payment system. However, CMS will develop an ACO-specific savings benchmark that must be met if the ACO is to receive “shared savings”—a percentage of the money saved—at the end of each one-year performance period.The benchmark is an estimate of what the total Medicare physician and hospital expenditures would have been for those particular patients in the absence of the ACO. If an ACO's spending exceeds the benchmark, the organization is responsible for repaying Medicare the difference.

* The ACO has two financial options: (1) a one-sided risk model, in which the ACO would be eligible for shared savings only for the first two years, and in the third year the ACO could share savings or be financially responsible for any loss; and (2) a two-sided risk model, in which the ACO would share in savings and be held accountable for losses in all three years.

* CMS's thinking is that some ACOs will be uncomfortable accepting financial risk in the first two years because they need to get experience with care coordination and population health management.On the other hand, some organizations already have that experience and may wish to accept more risk in return for a higher potential shared savings rate.The two-sided model would allow the ACO to share up to 60% of the total savings it generates for the Medicare program, while the one-sided model allows the ACO to receive a maximum of 50% of the savings.

* Medicare patients will be retroactively assigned to an ACO based on which primary care physicians provided most of their care during a given year. However, patients are free to receive care from any physicians they choose, even after they have been assigned to an ACO.For starters, ACOs will be accountable for 65 quality-of-care measures in five domains: patient experience, care coordination, patient safety, preventive health, and at-risk population/frail elderly health. No oncology-specific measures are included.

* To encourage participation in 2012, an ACO will be eligible for the maximum potential shared savings if it saves money and reports the required quality measures. In subsequent years, each ACO will earn a quality score based on its actual performance on the various measures. Its “shared savings” payout will be based in part on that quality score.

* If shared savings are earned, participants in an ACO decide how to split the money among themselves.

—LB

© 2011 Lippincott Williams & Wilkins, Inc.

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