BNA's Health Care Daily Report
Source: Health Care Daily Report: News Archive > 2010 > November > 11/08/2010 > News > ACOs: California Doctors’ Group
Offers Recommendations on Accountable Care
California Doctors’ Group Offers
Recommendations on Accountable Care
SACRAMENTO, Calif.—The California Medical Association (CMA) says accountable care organizations (ACOs) to be formed
under the federal health reform law should be led by doctors, and potential incentive payments for cost savings should go to patient
care services, the group's general counsel told BNA Nov. 4.
While CMA remains “supportive of the concept” behind ACOs, the doctors' group is urging the federal Centers for Medicare &
Medicaid Services (CMS) to provide regulatory safeguards to allow ACOs to thrive as “successful and patient-centered” endeavors
to help rein in health care costs, CMA Vice President and General Counsel Francisco Silva said in an interview.
At CMA's 2010 annual meeting in early October, the group's policy arm, the House of Delegates, adopted policy recommendations
and principles for physicians to consider when evaluating ACOs, the new paradigm of integrated patient care championed in the
national health care overhaul.
Care Coordination, Shared Savings
The Patient Protection and Affordable Care Act (PPACA) allows providers to create ACOs to provide coordinated systems of care
for Medicare fee-for-service beneficiaries.
The aim is to increase access to health care, improve quality and outcomes, boost efficiency, and cut costs, particularly by preventing
unnecessary hospital admissions and emergency department visits.
In exchange for being wholly accountable for their assigned Medicare beneficiaries and generating a cost savings, PPACA allows
integrated physician groups to reap some of the money they save the federal Medicare program for the elderly and disabled.
Silva said taking part in the Medicare shared savings program “should not be seen as a money-making opportunity for for-profit
entities,” including most insurance companies.
But rather, he said, the savings and revenues of an ACO should be retained for patient care services and distributed to the ACO
CMS is expected to issue a proposed regulation on ACOs by the end of the year. CMS and other federal agencies held a public
meeting on the ACO provisions of the health reform law in October (192 HCDR, 10/6/10).
Yet-to-be-set incentive-payments would only be awarded when an ACO satisfies quality measures and meets its savings benchmark,
to be based on the past Medicare expenditures for the group's assigned beneficiaries.
The CMA, however, is pressing for adjustment for differences in geographic practice costs and individual patient risk factors, Silva
said. Risk adjustment would provide an incentive ACOs to accept and treat patients who have chronic or complex illnesses, the
CMA principles say.
ACOs may be primary-care or multi-specialty medical groups of loosely affiliated physicians to large organized groups of providers.
ACOs must participate in the Medicare shared-savings program (MSSP) for at least three years, and must have a network of
primary care physicians to serve at least 5,000 patients.
As envisioned by PPACA, signed in March by President Obama, the MSSP program will provide payments for successes in both
the Medicare Part B (physician care) and the Part A (inpatient care) programs (PPACA Section 3302).
Silva Outlines Potential Legal Issues
The ACO provider model poses providers a bevy of complex legal and professional issues, not the least of which is how to maintain
a firewall between their professional judgment and influences from commercial interests to cut medically necessary costs, Silva said.
“Clinical decisions should be made by doctors, not by lay entity,” Silva said.
PPACA does not provide funding for ACO development, so physicians who organize into groups will rely only on the potential for
back-end shared savings, to recoup their administrative costs. Silva said CMS should provide grants as incentives for the creation of
“There is a lot of uncertainty right now,” Silva said, adding the sentiment will linger until the federal government sets final program
CMA Seeking Regulatory Influence
Silva said the CMA delegates approved its ACO principles and recommendations months ahead of promulgation, hoping to influence
the regulatory process.
The chairman of the CMA's Physician-Hospital Alignment Technical Advisory Committee, James Strebig, said the document will help
the doctors' group to work with the state Legislature to “counteract some of the aggressive efforts” by the hospital industry to use
ACOs “to control and capture physicians.”
With more than 35,000 physician members, the CMA is the Golden State's largest organization of doctors and a political behemoth
in state government.
CMA President J. Brennan Cassidy, in an Aug. 13 letter to members, pledged the organization will help doctors “take charge of your
own destiny” in the wake of the heath care law and the wave regulatory changes PPACA will generate.
“CMA is working to help you … plan a future where physicians have financial and clinical autonomy in the Medicare program, and
the private marketplace,” Cassidy wrote.
Silva said the CMA has concerns whether MSSP, set to begin by 2012, could expose ACOs to potential civil complaints for running
roughshod over federal antitrust statutes currently on the books that bar groups of doctors from being clinically and financially
CMA says that to allay fears, the U.S. Department of Health and Human Services (HHS) and Federal Trade Commission should
establish “a full range of waivers and safe harbors” so ACOs would be organizationally legitimate, even after the shared-savings
“Physicians cannot completely transform their practices only for their Medicare patients, and antitrust enforcement could prevent them
from creating clinical integration structures involving their privately insured patients,” the CMA association said.
For its part, the insurance industry has raised concerns health care costs could increase significantly if ACOs were to leverage their
power to drive up reimbursement rates in their contract negotiations with payers.
The industry trade group, America's Health Insurance Plans (AHIP), urged federal officials, in a Sept. 27 letter, to protect against
anticompetitive efforts that might arise. AHIP General Counsel Joseph Miller said ACOs can be “an important part” of improving the
U.S. health care system but cautioned CMS that ACOs could wreak havoc if they become “mere vehicles for price fixing or
aggregating market power.”
An Oct. 25 report, Accountable Care Organizations in California, released by the Oakland, Calif.-based nonprofit Integrated
Healthcare Association (IHA), said ACOs are “not a panacea” for health care spending control, noting some California provider
organizations have leveraged their bargaining power to “extract high payments” from health plans (206 HCDR, 10/27/10).
NCQA Floats Proposal
The health care accrediting body, the National Committee for Quality Assurance (NCQA), has produced a draft set of ACO
standards and measures, based on input it received from integrated health care systems, academia, and the insurance industry.
The Washington-based nonprofit is seeking public comments by Nov. 19 on its proposal to evaluate ACOs in seven categories:
infrastructure and operations, access and availability, primary care, patient management, care coordination and transition, patients'
rights and responsibilities, and performance reporting (202 HCDR, 10/21/10).
The draft criteria are geared toward assessing whether an ACO is equipped to meet CMS goals, the group said.
“NCQA believes that we should begin with structure and process measures that tell us that an ACO has the infrastructure necessary
to function as an accountable entity and achieve the triple aims,” an Oct. 19 statement says. “Criteria should provide a blueprint for
ACO development and assess core capabilities that improve the likelihood of success.”
By Chris Rizo
The CMA document is on the organization's website, at http://www.cmanet.org/upload/ACO_principles_amended_HOD2010.pdf.
The IHA white paper is at http://www.iha.org/pdfs_documents/home/ACO_whitepaper_final.pdf.
The NCQA draft criteria are at
Contact us at http://www.bna.com/contact/index.html or call 1-800-372-1033
Copyright © 2010, The Bureau of National Affairs, Inc.. Reproduction or redistribution, in whole or in part, and in any form,
without express written permission, is prohibited except as permitted by the BNA Copyright Policy.