Doug Hastings, Chair of the Board of Directors and a Member of the Firm in the Health Care and Life Sciences practice in the firm’s Washington, D.C., office, was quoted in an article about how private and public-sector programs are illustrating what to expect in rules for Medicare’s pilot on Accountable Care Organizations (ACO).
The article discussed how provider groups gearing up to participate in the Medicare ACO pilot programs created in the new health reform law face a daunting task of preparing. That’s because even though the programs start in January 2012, CMS is nowhere close to issuing the regulations defining how performance will be measured or savings computed and shared with providers, and says it can’t even discuss those topics yet. But there are some recent public- and private-sector programs that give a good idea of what to expect, experts say.
Hastings stated that with little concrete detail, the first step for provider entities wanting to participate in the new ACOs is to measure current and historical Medicare spending, and recognize that the reform law provides no new money to pay for the ACO program. He went on to mention that the government needs to set target savings levels and a formula for splitting savings if those targets are achieved.
While he cautioned that there is no basis for saying the CMS rules will come out this way, Hastings noted that an ACO project involving the Brookings Institution, the Dartmouth Institute for Health Policy and Clinical Analysis and hospitals gives 80% of the savings to providers.
ACOs under the new law, he pointed out, will need to have enough primary care physicians to deliver care to at least 5,000 Medicare beneficiaries. The law doesn’t specify payment methodology for the program but does allow use of partial capitation arrangements.
He said ACOs should expect to be measured on the basis of patient outcomes and satisfaction as well as cost efficiency.