A letter from the North Carolina Medical Society to the Administrator of the Centers for Medicare and Medicaid Services earlier this month represents many hours of work on behalf of physicians in addressing concerns over the Proposed Rule for Accountable Care Organizations (ACOs).

The letter from NCMS President John R. Mangum, MD, on behalf of the NCMS, expressed support for the goals of the Medicare Shared Savings Program to improve health and quality and to control costs. However, the NCMS strongly believes the proposed ACO rules are seriously flawed and if substantive changes are not made, the program will likely fail.

Concerns over the proposed ACO rules arose from a lengthy process in which NCMS staff divided the 400-plus page rule into about 20 separate pieces that were reviewed by the ACO Task Force. Conference calls and e-mail exchanges were used to develop and finalize comments that were contained in two letters: click here to read the letter to the Federal Trade Commission/Department of Justice on the antitrust policy statements; click here to read the letter to CMS on the Proposed ACO Rule.

NCMS views the Shared Savings Program, if structured appropriately, as a viable interim approach to implementing physician-led improvements in the delivery of health care. But the review raised grave concerns about the proposed ACO rules, with similar concerns also expressed by the American Medical Association (AMA), the American Medical Group Association (AMGA), the Medical Group Managers Association (MGMA), the American Hospital Association (AHA), and numerous national specialty societies.

In the five-page letter, the NCMS addresses the overall proposal; assignment; benchmarking and beneficiary risk adjustments; shared savings and risk assumption; quality; governance; governance, leadership and administrative considerations; legal considerations; and other requirements contained in the proposed rules.

Generally, the NCMS is convinced the proposed rules are too onerous, even for more sophisticated practices and health care organizations, and that more options are needed that are less intrusive, costly and risky.

Recommendations include:

• Revising the assignment structure to create a conducive environment for the achieving the Triple Aim (three-part): (1) improve the health of the defined population; (2) enhance patient care experiences including quality, access and reliability; (3) control per capita cost of care. This includes utilizing prospective beneficiary assignment and requiring beneficiaries to choose to be assigned to an ACO.
• Allowing the benchmark to be risk adjusted for each year, with more consideration given to risk adjustment methodologies.
• Providing at least one track with no down-side risk for a new ACO, with the option of participating in that track for at least two to three year agreement periods so that these ACOs are not forced to take on down-side risk before they are ready.
• Eliminating the minimum savings rate (MSR) or cap it at one percent.
• Eliminating the withholding of all shared savings bonuses, which are needed for reinvestment in the ACO
• Significantly reducing the number of quality measures and gradually phase in more each year.
• Retaining (support) the proposed requirement that 75 percent control of the governing board is by ACO participants to promote physician-leadership.
• Retaining (support) the ACO’s clinical management and oversight to be managed by senior-level medical director licensed and present in the state where the ACO is located.
• Extending the proposal to waive Stark Law, Anti-Kickback Statute and Civil Monetary Penalties Act for distribution of shared savings among ACO participants to allow additional collaborative activities beyond the Medicare Shared Savings program and other CMS-sponsored programs.
• Adopting a more graduated approach to participating in the Shared Savings Program on multiple levels.
• Preemption of state laws that conflict with the Shared Savings Plan, with a strong recommendation that CMS and the OIG act to preempt the corporate practice of medicine doctrine and the state equivalents of the federal Civil Monetary Penalties Law, Anti-Kickback Statute, and Anti-Referral (Stark) Law, but only insofar as these state laws might otherwise apply to properly organized and operated ACOs.

Read AMA comments on the Proposed ACO Rule.

Read AMA comments to the FTC/DOJ.