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ACO Rule Leaves Oncologists Wondering How to Proceed

Butcher, Lola

doi: 10.1097/01.COT.0000412439.12521.4b
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Disappointed by the federal government's final rule for accountable care organizations, the oncology community is trying to figure out how to respond to the ACO movement, one of the biggest developments in health care delivery in more than a decade.

Across the country, health systems and physicians are getting together to apply for participation in the Medicare Shared Savings Program (MSSP) that starts this year. Through that program, physicians who deliver care that meets certain quality standards at a lower-than-usual cost can “share savings” with the Medicare program.

At the theoretical level, the MSSP is exciting to physicians who can differentiate themselves on quality and cost because they can be rewarded financially for superior performance. But in the real world, that opportunity may not be readily available to oncologists and other specialists.

The final rule, published last fall, is designed so that high-value hospitals and primary care physicians are likely to benefit financially but specialists who care for high-cost patients are not.

“It does not provide a whole lot of incentive…for the [ACO] to want the oncologist to participate or for the oncologist to want to participate,” said Matt Brow, Vice President of Communications, Government Relations & Public Policy for McKesson Specialty Care Solutions, the parent company of US Oncology.

Until the Centers for Medicare & Medicaid Services announced its proposed plans for the MSSP early last year, there was widespread enthusiasm among hospitals, primary care physicians, and specialists that Medicare ACOs held great potential.

The original proposed rule, however, generated a hailstorm of complaints from all sectors. CMS was seen as asking health care providers to accept too much financial risk for too little potential reward—and with huge startup costs and a daunting set of restrictions to boot.

CARY PRESANT, MD, said he is concerned that the ACO model may incentivize physicians to avoid high-cost treatments

CARY PRESANT, MD, said he is concerned that the ACO model may incentivize physicians to avoid high-cost treatments

The final rule addressed many of those complaints, proving that CMS wants the ACO model to succeed. Hospitals and primary care leaders have generally applauded the final rule, and many are applying to enter into ACO contracts with the government starting in either April or July of this year—while oncologists sit on the sidelines.

“That is going to be a slower process,” said Matt Farber, Director of Provider Economics and Public Policy for the Association of Community Cancer Centers. “It's not going to happen right away, certainly.”

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What's Not to Like

Dr. Cary Presant, a member of Wilshire Oncology Medical Group and Chairman of the Medical Oncology Association of Southern California, said he is concerned that the ACO model may incentivize physicians to avoid high-cost treatments.

“Those who are running an ACO may say, ‘If this patient is going to cost us a lot of money for some of these new proprietary drugs…our ACO may not make money,’” he said. “The unspoken word is ‘try and find a way to get these patients to not utilize these drugs, and consider whether this patient who is going to be a big expense should go into a hospice earlier rather than later.’”

Brow said he thinks the government's specific approach to cost reduction makes it unlikely that ACOs will want oncologists to participate—and unlikely that oncologists will want to. To earn “shared savings,” an ACO must meet per capita spending targets based on three years of historical spending for the patients in the ACO.

“Given the significant pipeline of new drugs and technology in the oncology space, the expected targeting and likely expense of those therapies, it may prove difficult or impossible to provide standard-of-care treatment to Medicare beneficiaries fighting cancer at the same or lower total cost of care over any three year period,” Brow wrote in an analysis of MSSP.

Other criticisms of the CMS rule include:

  • Too much risk for physicians. A basic tenet of the ACO model is that health care providers must work together—but they also must make sure they are not violating antitrust laws. Also, Presant points out that the rule does nothing to protect physicians from malpractice lawsuits that might arise from their efforts to avoid redundant tests and provide low-cost care.
  • No quality standards for cancer care. The ACO model is designed to balance the priorities of quality and cost by requiring ACOs to meet certain standards of 33 quality measures—none of which address oncology services. “There is another great risk that the ACO will not be held to delivering quality oncology care in any way, leading to the desire to see oncologists use the least costly type of therapy or no therapy at all,” he said.
  • Exclusion of most expensive-patients. Patients in the 99th percentile of annual Medicare costs will be excluded from the per capita spending targets. That cutoff will probably be around $100,000, Farber says, so some high-cost cancer patients would not be counted when CMS assesses an ACO's performance on cost containment.
MATTHEW FARBER, MA: “Make sure you know what is happening with your competitors and other folks in the area

MATTHEW FARBER, MA: “Make sure you know what is happening with your competitors and other folks in the area

While that would remove pressure to skimp on high-cost care, it might also prevent oncologists from receiving “shared savings” payouts, even though they will incur costs associated with participating in the ACO.

“That brings into focus that when oncologists are negotiating with a hospital and other practices to form an ACO, they have to clearly define what the role of the oncologist is going to be in the ACO,” Farber said.

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What to Do Now

Despite his dim view of the MSSP rule, Presant says that joining an ACO may be the best move for some oncologists: “When you're dependent upon PCPs in the community for the referral of patients, and the PCPs are forming an ACO, maintaining good quality relationships with those physicians and being able to continue to treat their patients may be essential.”

Brow thinks oncologists should avoid the MSSP and wait for CMS to come up with a better idea for rewarding top oncology performers. But that does not mean they should ignore MSSP activity entirely. Oncologists who do not participate in a Medicare ACO can still treat patients who are attributed to the ACO, but referring physicians will want to work only with specialists who help them hit cost-control benchmarks.

“If you are the only oncologist in the marketplace, you don't have to do anything because there is nowhere else to go,” Brow said. “But for those in a competitive position, I suggest they have a conversation with their referring physicians and hospitals that are forming a primary-care centric ACO and say ‘This is what I can commit to do: I will take care of the patients you send me in a cost-effective way and here's how I will do it.”

Farber agrees: “Make sure you know what is happening with your competitors and other folks in the area,” he said. “You don't want to lose out just because you decided not to join the ACO.”

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iPad Exclusive!

Hear more from Matt Brow, the top public policy official for US Oncology, discussing additional details about the final rule for Medicare ACOs, in our February 10 iPad edition.

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The ACO Rule: What It Is—And What It's Not

The federal government's rule for accountable care organizations applies only to those groups of health care providers that seek to enter into Medicare ACO contracts through the Medicare Shared Savings Program.

The rule does not apply to the many ACOs that are being organized to contract with private insurers in almost every large community in the nation. Similarly, the rule does not apply to state-level Medicaid programs; at least 11 states are planning to contract with ACOs to provide care for their Medicaid patients.

To make matters more confusing, some entities are avoiding the “ACO” term—for example, Blue Cross Blue Shield of Michigan uses the term “organized system of care” and Blue Cross Blue Shield of Massachusetts uses “alternative quality contract”—to describe what most observers would consider an ACO.

Regardless of terminology, the basic concept of accountable care is this: A group of physicians and other providers agree to be accountable for—via a contract—the health care costs and quality of care they deliver to a specific population of patients. In return, they share the savings they create for a payer.

Some key points of the rule for Medicare ACOs:

  • Each ACO must serve at least 5,000 Medicare patients who receive most of their primary care from the ACO. Patients do not choose to participate in an ACO and, in fact, might not realize they are in an ACO; CMS will assign a patient to an ACO if he or she receives most primary care services from its physicians.
  • Patients are free to use any physicians or hospitals they want. Thus, a patient who is served by a primary care physician within an ACO can receive oncology services outside the ACO.
  • The first ACO agreements will go into effect April 1 and run for three years and nine months. Another wave of agreements will go into effect July 1 and run for three years and six months. Beginning in 2013, all new ACO agreements will start on Jan. 1 and have three-year terms.
  • CMS will calculate “savings” as the difference between the ACO's actual spending in a performance period and a spending “benchmark” set for that particular ACO. The benchmark is risk-adjusted and based on the spending for the ACO's assigned patients during the previous three years.
  • The providers in an ACO will receive “shared savings” from CMS only if they meet quality standards. To do so, the ACO must score at least 70% on 33 measures.
  • ACO providers decide among themselves how to distribute the “shared savings” checks they get from CMS.
  • ACOs can choose from two financial arrangements: Track 1 is for ACOs that do not want to assume any risk for shared losses; and Track 2 is for ACOs that are willing to share losses, if any, with CMS. ACOs choosing Track 1 can share up to 50% of the savings they create for Medicare, after a minimum savings rate has been achieved; those choosing Track 2 can share up to 60%.
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Keep Up to Date with New Developments on Lola Butcher's ‘Practice Matters’ Blog!

Check out her blog on oncology-times.com at http://bit.ly/OT-PracticeMatters and via the OT iPad app.

© 2012 Lippincott Williams & Wilkins, Inc.
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