In a letter to CMS, America's Health Insurance Plans, representing the health insurance industry, recommended federal regulators place a series of extra requirements on accountable care organizations.
Here are 10 key requirements AHIP recommended:
1. Bar providers with large market share from ACOs. "ACOs should not amass market power," AHIP stated. CMS should "prohibit entities with market shares above a certain level from participating in the Medicare Shared Savings Program."
2. ACOs should report prices to antitrust enforcers. ACOs should report quality and price metrics to CMS and antitrust agencies.
3. Prevent cost-shift from public to private ACOs. Establish specific commercial rates for ACOs tied to Medicare rates. ACOs must report their metrics, and any shared savings should be tied to both Medicare and the commercial sector.
3. Strictly limit exemptions from fraud and abuse laws. Do not allow broad exemptions for ACOs from federal fraud and abuse laws. Program participation in itself would not constitute a waiver. Instead, each ACO should have to apply for a specific waiver.
4. Regulate ACOs' insurance functions. ACOs may take on insurance functions including managing risk, such as by using capitated payments, and managing networks of providers. Like health insurers, "these entities should be subject to standards for insurers on capital and solvency, network adequacy, disclosures and quality improvement," AHIP said.
5. Require sufficient infrastructure. ACOs should have an infrastructure allowing for care coordination, risk assessment and patient outreach. This should include IT capabilities for "clinical, operational and administrative functions," but AHIP did not mention requiring an electronic health record, as some have recommended.
6. Require adequate membership. ACOs need "a sufficient number of members to ensure an appropriate sample size and ensure that an ACO has the capability to effectively and efficiently manage a range of diagnoses and diseases," AHIP stated. However, it did not comment on the minimum of 5,000 Medicare beneficiaries set under the reform law.
7. Sufficient investment required. There should be "adequate financial and human resources to ensure that ACOs can provide appropriate and timely access to clinical and administrative support," AHIP stated. It did not specify an amount of money or personnel.
8. Attribute members prospectively. The problem of assigning or "attributing" members to an ACO has become a hot topic. While regulators have proposed retrospective attribution, providers want to know whom they are covering ahead of time. AHIP essentially agreed, saying members should be attributed at the beginning of the performance period, though numbers should be periodically updated to account for patient turnover. Also, "both providers as well as patients would be informed of the assignment and patients would have the opportunity to opt out of the ACO," AHIP stated.
9. Set a high threshold for accruing shared savings. Under the Medicare Physician Group Practice Demonstration, the model for ACOs, savings had to reach a 2 percent threshold before they could be shared with providers. Providers want to share in all savings under ACOs, but AHIP recommended keeping the 2 percent threshold or setting it even higher. But it did state the threshold could be set low at first and then raised over time. AHIP added that it should be limited to sustained improvements and not random variations in performance.
10. Limit bonuses. Put a cap on bonus payments to ACOs. AHIP recommended "elimination or raising of the cap over time as the program matures."
Read the AHIP letter to CMS about recommended ACO requirements.
Read more coverage of the insurance industry's views on ACOs.
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Here are 10 key requirements AHIP recommended:
1. Bar providers with large market share from ACOs. "ACOs should not amass market power," AHIP stated. CMS should "prohibit entities with market shares above a certain level from participating in the Medicare Shared Savings Program."
2. ACOs should report prices to antitrust enforcers. ACOs should report quality and price metrics to CMS and antitrust agencies.
3. Prevent cost-shift from public to private ACOs. Establish specific commercial rates for ACOs tied to Medicare rates. ACOs must report their metrics, and any shared savings should be tied to both Medicare and the commercial sector.
3. Strictly limit exemptions from fraud and abuse laws. Do not allow broad exemptions for ACOs from federal fraud and abuse laws. Program participation in itself would not constitute a waiver. Instead, each ACO should have to apply for a specific waiver.
4. Regulate ACOs' insurance functions. ACOs may take on insurance functions including managing risk, such as by using capitated payments, and managing networks of providers. Like health insurers, "these entities should be subject to standards for insurers on capital and solvency, network adequacy, disclosures and quality improvement," AHIP said.
5. Require sufficient infrastructure. ACOs should have an infrastructure allowing for care coordination, risk assessment and patient outreach. This should include IT capabilities for "clinical, operational and administrative functions," but AHIP did not mention requiring an electronic health record, as some have recommended.
6. Require adequate membership. ACOs need "a sufficient number of members to ensure an appropriate sample size and ensure that an ACO has the capability to effectively and efficiently manage a range of diagnoses and diseases," AHIP stated. However, it did not comment on the minimum of 5,000 Medicare beneficiaries set under the reform law.
7. Sufficient investment required. There should be "adequate financial and human resources to ensure that ACOs can provide appropriate and timely access to clinical and administrative support," AHIP stated. It did not specify an amount of money or personnel.
8. Attribute members prospectively. The problem of assigning or "attributing" members to an ACO has become a hot topic. While regulators have proposed retrospective attribution, providers want to know whom they are covering ahead of time. AHIP essentially agreed, saying members should be attributed at the beginning of the performance period, though numbers should be periodically updated to account for patient turnover. Also, "both providers as well as patients would be informed of the assignment and patients would have the opportunity to opt out of the ACO," AHIP stated.
9. Set a high threshold for accruing shared savings. Under the Medicare Physician Group Practice Demonstration, the model for ACOs, savings had to reach a 2 percent threshold before they could be shared with providers. Providers want to share in all savings under ACOs, but AHIP recommended keeping the 2 percent threshold or setting it even higher. But it did state the threshold could be set low at first and then raised over time. AHIP added that it should be limited to sustained improvements and not random variations in performance.
10. Limit bonuses. Put a cap on bonus payments to ACOs. AHIP recommended "elimination or raising of the cap over time as the program matures."
Read the AHIP letter to CMS about recommended ACO requirements.
Read more coverage of the insurance industry's views on ACOs.
- Don't Remove Antitrust, Fraud Laws for ACOs, Insurance Industry Warns
- With Threats to Payors' Market Power, Trade Group Hires High-Ranking Antitrust Regulator
- Health Insurer Trade Group Spends Big on Lobbying Even After Reform Passes