News: CMS needs to provide more support to physician-led ACOs, report says

Though small physician-lead Accountable Care Organizations (ACOs) have shown success in reducing costs while improving quality, a new report from the Duke-Margolis Center for Health Policy suggests that these ACOs need continuing and future support.

The report notes that ACOs would benefit from more guidance and support from CMS and private insurers, as they take on greater financial risk and move further away from traditional fee-for-service payments. The authors of the report conducted interviews with ACO leaders and concluded that smaller ACOs in more resource-deprived settings need “additional support in building organizational competencies (such as clinical care redesign and forecasting costs) to take on increased risk.”

The report also indicates that ACO leaders are concerned about meeting new requirements of Medicare’s Pathways to Success program, as it quickly shifts financial risk from CMS to ACOs.

“By asking physician-led ACOs to take on more financial risk, CMS is trying to encourage better care at a lower cost,” said Robert Saunders, research director for payment and delivery reform at Duke-Margolis. “Transitioning to new payment models is always challenging, and CMS should do all it can to support smaller physician groups in joining effective ACOs at this pivotal time or risk their longer-term sustainability.”

The report notes that many small physician-led ACOs are working with third party companies to access needed capital upfront and additional services to help them participate in risk-bearing models.

The report recommends three steps CMS can take to assist these physician-led ACOs:

• Reduce regulatory burdens: Certain regulations limit ACOs ability to coordinate and manage care effectively. CMS can help by changing such roles to give more flexibility for organization in value-based payment contracts.
• Provide more support for ACOs to develop technical capabilities: CMS can identify and share successful strategies used by ACOs to improve cost and quality of healthcare
• Simplify program rules: The report says that ACO leaders find it difficult keeping up with changing policies, and smaller organizations will be more likely to participate in new programs where the rules are certain and easier to understand.

Editor’s note: The Duke-Margolis Center for Health Policy report can be found here. To read more about the cost savings associated with ACOs, click here.