2 ACO Experts, 2 Viewpoints, Too Much to Know

Karen Minich-Pourshadi, for HealthLeaders Media , May 31, 2011

What does all this really mean for your hospital or health system? Should healthcare leaders revisit the idea of establishing a Medicare ACO program?


Scratch that, No.

Well, Maybe?

If you’re not sure, take comfort in the knowledge that even experts don’t quite agree on what these programs will and will not do for hospitals or health systems.

“It’s a step in the right direction because the innovation office is signaling flexibility around individual terms and conditions, and spending more time concentrating on the readiness of the afflicted organizations for the task at hand,” says Mark Lutes, senior member of the Washington, DC office of Epstein Becker and Green, P.C.

On the other hand, Nathan Kaufman, strategic director and founder of the San Diego-based Kaufman Strategic Advisors disagrees. “I don’t think these are helpful at all. The fundamental business fallacies that are baked into the [original] ACO regulations are still in the Pioneer regulations,” he says.

As with many new healthcare programs there are pluses and minuses for healthcare leaders to consider. A few positives of the pioneer program include, according to Lutes:

  • The Application: Unlike the application to participate as a Medicare ACO, the Pioneer program application is more free-form. Applicants are being asked to make their case to participate in the program through a narrative.
  • Acceptance Criteria: The narrative portion allows CMS to accept providers into the program without using rigidly defined criteria, such as it uses with the Medicare ACO program. “It’s evident with this program that they heard the comments of the industry and they are trying to address some of them through this proposal,” says Lutes.
  • Larger Portion of Shared Savings: In this model CMS is willing to share a larger percentage of the savings--approximately double what’s available in the Medicare Shared Savings program.
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