AMGA Members Reject Proposed ACO Rule

May 27, 2011, 10:53 AM

The American Medical Group Association (AMGA) recently announced that the vast majority of its members would not enroll as an Accountable Care Organization (ACO) if the Centers for Medicare and Medicaid Services (CMS) do not significantly overhaul the program as laid out in the proposed rule released by CMS on March 31. A survey of AMGA members revealed that 93% would decline to participate due to many concerns including the minimum savings requirements and the levels of risk that ACOs would have to assume. Overall, the AMGA found that the proposed rule is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.

The AMGAs rejection deals a major short-term blow to the implementation of the ACO program, as many of the AMGAs members are exactly the type of organizations that are thought to be ideally suited to becoming ACOs. Long-term, however, the AMGA said that it is committed to working with CMS to find a workable ACO structure. The AMGA believes that a failure to do so would result in draconian cuts across the industry that would solve none of the current problems and likely lead to increases in the volume of services provided.

In addition to the AMGAs concerns, the American Hospital Association recently expressed unease over the estimated costs associated with starting an ACO. Their estimates of $11.6 million for a 200-bed, single hospital system and $26.1 million for a 1200-bed, five hospital system far outpace the $1.8 million first-year average provided by CMS. CMS, meanwhile, has pledged to address the issues that have been raised and said that many of them were anticipated. The Department of Health and Human Services also recently announced a Pioneer ACO program that it hopes providers such as Geisinger Health System, the Cleveland Clinic and Intermountain Healthcare would be able to implement as early as the end of the summer. --Christopher L. McLean