A January 31 New England Journal of Medicine opinion piece expressed doubt that Accountable Care Organizations (ACOs) can be expected to save money.
The National Association of Accountable Care Organizations (NAACOS) didn’t post a response, but an online magazine did, and it doesn’t seem to support the fundamental claim that ACOs’ cut healthcare costs.
In two other pieces of ACO news:
- NAACOS is looking favorably on a federal Health and Human Services Department (HHS) plan to create an application programming interface (API) that would enable Medicare ACOs to show patients their care data, from the ACO and from other caregivers as well; and
- NAACOS views an ACO-like payment plan implemented by the Blues of North Carolina as a form of confirmation that the ACO model works. Details below.
In the NEJM commentary, “Coordination of Care or Conflict of Interest? Exempting ACOs from the Stark Law,” two University of Pennsylvania researchers, Genevieve P. Kanter, Ph.D. of the University of Pennsylvania‘s Perelman School of Medicine and Mark V. Pauly, Ph.D. of the University of Pennsylvania’s Wharton School, express the opinion that the vertical integration between hospitals and physician practices under the ACO model won’t bring about competition and the best prices for patients.
“Physicians are less able to refer patients to an unaffiliated hospital, even if that facility may be best able to serve a particular patient. Similarly, hospitals may be exclusively tied, for better or worse, to the practices that are part of their network.”
Also, “when ACOs are paid under fee-for-service systems, as most are, physicians have an incentive to refer patients to hospitals and for other services within the system—the classic conflict-of-interest problem that the Stark law was trying to address,” they argue.
In their view, moving from fee-for-service system to bundling or capitation-based reimbursement under the ACO model won’t work, either. That “could lead to stinting on care and reduced quality.”
While the ACO trade organization hasn’t provided a rebuttal as yet—and probably should, given the influence of NEJM—Healthcare Innovation, a leading online healthcare IT magazine and news site, did respond in an article by Mark Hagland titled, “ACO Development and the Stark Laws—Time to Reassess Everything—Or Not?.“
What he had to say didn’t help the ACO cost-saving argument and ACOs’ quest for a permanent, collective Stark waiver.
Hagland quotes extensively from the NEJM opinion piece and doesn’t dispute the two academics’ views. Nor does he quote from or cite NAACOS’ study released in September 2018, which says ACOs save money.
(https://www.naacos.com/studyofmsspsavings2012-2015)
Hagland’s answer to the NEJM opinion piece literally starts with “Ouch.”
He adds, “If the most important goal is cost reduction and outcomes improvement at a relatively fast pace, one could easily argue that advantaging ACOs through regulatory modification is absolutely justified, even if in the short term, the results shown aren’t stellar.”
That seems to imply that he accepts the Centers for Medicare and Medicaid Services (CMS) view that ACOs cost Medicare $344.2 million in 2013-2015 rather than saving $541.7 million, as the NAACOS study concluded (“CMS Makes ACOs a Punishing Experience,” Orthopedics This Week, January 4, 2019).
His commentary deflects the discussion away from savings: “[O]ne could easily argue that the Stark laws do not reflect what we aspire to for our healthcare system, as the strategy of shifting the U.S. healthcare system from volume to value is one that has gained broad general consensus. And if we generally want to shift from volume to value, shouldn’t we reward the business arrangements that support that shift?”
That is to say: the Stark laws inhibit health care organizations from producing “value,” so dump them, even if it means higher costs. Politically, that is probably not a winning argument in an era of soaring federal budget deficits and projections that Medicare expenditures will grow faster than private sector health insurance and Medicaid expenditures.
Making MSSP ACO Claims Data Available to Patients
CMS is developing what it calls a “Beneficiary Claims Data API” (application programming interface) which would give Medicare Shared Savings Plan (MSSP) ACOs the ability to imbibe their patients’ Medicare claims records straight from the Medicare computer systems in close to real time, if the ACO has an electronic health record (EHR) capable of accepting the interface and the data.
Currently, Medicare provides that data to ACOs only monthly, in bulk. The API differs from another existing system, BlueButton, which allows an ACO to fetch individual patients’ claims from Medicare only a patient at a time, with that patient’s approval. The new system would give ACOs fast access to all their patients’ claim data without individual authorizations.
The API, announced by CMS Administrator Seema Verna in a speech at the annual HIMSS health care information technology meeting February 12, would allow an ACO’s EHR to grab not only claims from its own treatments, but any Medicare claims for the ACO’s patients.
Such a capability would pressure private insurers to match it. It might also ratchet up competition for patients, as ACOs could see the claims on all the medical care their patients received elsewhere. Whether the records will show where that other care took place wasn’t addressed in the CMS announcement. Details known so far: https://sandbox.bcda.cms.gov/
No timetable was announced on when the API will be available.
Blue Cross-Blue Shield, North Carolina Create “ACO-like” Reimbursement System
In a move which seems to be a strong validation of the ACO model, Blue Cross-Blue Shield of North Carolina and five of the state’s biggest health care systems, Chapel Hill-based UNC Healthcare, Raleigh’s WakeMed Health & Hospitals, the Durham-based Duke Health system and Winston-Salem-based Wake Forest Baptist Health, announced January 15 that they have signed long-term contracts to be reimbursed under value-based payment system closely similar to the payment systems for MSSP ACOs.
