Behind the scenes, a crucial health-care regulation is starting to win over some of its biggest detractors.
At issue here is the Accountable Care Organization regulation, one of the new health-care law’s most aggressive attempts at cutting costs. It asks health-care providers to band together into “Accountable Care Organizations” and accept a flat fee for all treatment related to a given patient or condition. The goal is to create incentives for better, more efficient and more cost-effective treatment; if the treatment costs the doctors less than the flat fee, and the outcomes hit certain benchmarks, then they net the leftover payments..
In concept, that all sounds like an okay deal for doctors: They’re rewarded for providing better care at lower costs. But when the Obama administration wrote it out in a rule last April, providers howled in protest. Particularly vocal was the American Medical Group Association (AMGA), which represents nearly 400 large provider organizations and called the rule “overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.”
So the administration did a rewrite: it published a final rule last week that got rid of a lot of the ACO program’s risks and increased its rewards. All those changes, it seems, have health-care providers warming up to the program.
Wonkblog has gotten a first look at a letter AMGA President Donald Fisher sent to the Center for Medicare and Medicaid Services earlier today, showing how the group has pretty much pulled a U-turn on the program. Here are the key paragraphs (and here the full letter):
All the years I have been following rule making, I have never seen a proposed rule change in its final version as much as was the case for ACOs—and for the better! Thank you and your many colleagues at CMS for listening to AMGA and for being responsive to the commenting public in generally.
Naturally, potential ACO participants must evaluate the framework from their unique circumstances, and take into account the concomitantly issued guidance documents from other agencies, those with primary jurisdiction over anti-trust, tax, anti-kickback and related matters. However, it is my impression that you have succeeded in making the ACO regulations workable and attractive enough to garner an initial volume of voluntary participation to get this idea off to a good start. I am certainly recommending to AMGA members that ACOs, in light of the final rule, clearly warrant their serious consideration.
As I’ve written before, the ACO regulation could very well set the course for the future of health reform. And, it seems to be gaining support.