CMS fixed its ACO benchmarking problem. That may not be enough

The Obama administration has solved what many viewed as a critical flaw in the bonus structure for Medicare's accountable care organizations.
Physician buy-in is critical for the long-term sustainability of the ACO program, which could play an important role within Medicare's broader reforms to physician payments under the Medicare Access and CHIP Reauthorization Act, or MACRA. On the other hand, MACRA could inspire physicians to quit the whole ACO enterprise.Starting next year, the financial benchmark that most Medicare ACOs use to determine whether they will share in savings or losses will incorporate regional spending factors, according to a final rule the CMS posted June 6. To prod ACOs into riskier models, the CMS also agreed to allow ACOs one additional year in the least risky model before they have to move to a more difficult track. Persuading the government to blend local and national benchmarks to determine bonuses or penalties has been a priority for ACOs—which are groups of doctors and hospitals that work together to eliminate unnecessary spending and coordinate high-quality care. But many have raised concerns that the CMS still is not doing enough to ease providers into riskier ACO models, which is paramount for Medicare's new physician payment system. “The elephant in the room is not the benchmarking rule,” said Clif Gaus, CEO of the National Association of ACOs, a trade group run by hospitals and physician groups. “It is: What is CMS going to do to improve the business model for the one-sided ACOs and provide a lower-risk track for the two-sided programs?” The CMS has shown a fervent desire to use ACOs as a primary method of moving to value-based care, and the latest rule almost certainly won't end the government's attempts to refine the program. “They've basically gone all-in with the ACO as the vehicle to try and control fee-for-service, and they will continue to tinker with the regulations and the rules until they find something that works,” healthcare consultant Nathan Kaufman said.
There are 433 Medicare Shared Savings Program ACOs, along with a handful of Next Generation and Pioneer ACOs, all of which were created under the Affordable Care Act. However, only 22 of the shared-savings ACOs have chosen two-sided risk. ACOs in two-sided risk contracts either receive bonuses for high-quality care that is delivered under a spending target or pay a penalty to Medicare if they don't save money and don't demonstrate high quality. ACOs in one-sided arrangements—track 1 in the Shared Savings Program—are eligible for smaller bonuses and aren't on the hook for any penalties if they miss their targets in the first three years, and now an optional fourth year. Spending benchmarks are to ACOs as location is to real estate, Gaus said. “Everything is benchmarks, benchmarks, benchmarks. It is the one metric that determines whether an ACO is going to achieve savings or not.”

Clinton versus Trump on healthcare policy

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From Fee-for-Service to Value-Based Care: How All Can Benefit

67% of payers and providers have either already switched or are looking to switch to value-based care.

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4.  Congratulations to Karan Munuswamy, MD.
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