The State of Play on Medicare ACOs

GHG and our longtime client North Texas Specialty Physicians were featured in a terrific piece by Harris Myer in this month’s Health Affairs.  We’re continuing to work closely with the CMS Innovation Center to bring some real-world sensibility to capitated Pioneer ACOs.

The biggest hurdle so far: bureaucratic inertia around claims payment by ACOs. CMS doesn’t want to disrupt claims processing by carriers and fiscal intermediaries, and doesn’t have time to promulgate regulations on claims being paid by capitated ACOs. We’re continuing to engage on the subject and hope to have a breakthrough soon with applications for the Pioneer Demonstration due on August 19.

If CMS can keep up with real-world practices for sophisticated providers already participating as ACOs, I think they’ll have robust participation in the Demo, including 6-8 GHG clients; if they don’t I fear providers will opt for more concrete opportunities in Medicaid and the commercial sector, and Medicare will be left in the dust as ACOs move forward elsewhere. It would be a tremendous missed opportunity: there is operational precedent for how capitated ACOs can work in the Health Care Prepayment Plan (HCPP) and Medicare Cost Contract programs. CMS just needs to get out of its own way and ACOs could thrive in Medicare.