May 31, 2011
Centers for Medicare and Medicaid Services
Department of Health and Human Services
P.O. Box 8013
Baltimore, Md. 21244-8013
Medicare Shared Savings Program: Accountable Care Organizations (ACO)
Dear. Dr. Berwick:
Thank you for the opportunity to provide comments on the Medicare Shared Savings Program: Accountable
Care Organizations (CMS 1345-P) proposed rule as published in the April 7, 2011 Federal Register. The
Patient Protection and Affordable Care Act (ACA) (Public Law 111-148) requires the Centers for Medicare
and Medicaid Services (CMS) to establish a voluntary program by January 1, 2012 that promotes
accountability for a patient population, coordinates items and services under Medicare Parts A and B, and
encourages investment in infrastructure and redesigned care processes for high quality and efficient service
delivery. Participating entities that meet quality performance standards and achieve savings against
expenditure benchmarks are eligible to receive payments for shared savings.
The American Osteopathic Association (AOA), which represents more than 70,000 osteopathic physicians
nationwide, supports the establishment of new integrated delivery models like accountable care organizations
(ACO) that will achieve the triple aim of better care for individuals, better health for populations, and lower
per capita spending for Medicare beneficiaries. We are especially supportive of new delivery models that
enhance and promote the role of primary care physicians as the foundation for the health care system and
place emphasis on the promotion of coordinated care across the health care spectrum. Studies show that
patients who have timely access to primary care physicians tend to fare better with the quality of care than
patients who do not have access to primary care physicians. Approximately 65% of osteopathic physicians
practice in a primary care specialty, such as pediatrics, family practice, obstetrics and gynecology, and internal
medicine. Many DOs fill a critical need for physicians by practicing in rural and other medically underserved
The AOA commends the Administration’s emphasis on primary care, the “team-based” approach to care
delivery, and for clearly establishing a leadership role for primary care physicians in the Medicare Shared
Savings Program proposed rule. However, in our opinion, the proposed rule does not go far enough in
building the primary care infrastructure that is crucial to the success of an ACO. We believe that the Patient-
Centered Medical Home (PCMH) is that foundation and infrastructure and suggest that the proposed rule do
more to encourage the creation of PCMHs by advancing the medical home and all of the supporting
principles of the PCMH as a first step in building an integrated delivery model.
In 2007, the AOA developed the Joint Principles of the Patient-Centered Medical Home together with the
American Academy of Pediatrics, American College of Physicians, and the American Academy of Family
Physicians. Under the PCMH model, the personal primary care physician leads a team of individuals at the
practice level who collectively take responsibility for the ongoing care of the patients. The personal physician
is responsible for providing all of the patient’s health care needs or for arranging care with other qualified
professionals, including care for all stages of life. The care is coordinated and/or integrated across all
elements of the health care system and the patient’s community. Care is facilitated and supported by the use
of registries, information technology, health information exchanges and other means to assure that patients
get the care as indicated when and where they need it and that it is provided in a culturally and linguistically
In addition, quality and safety are the hallmarks of the medical home. Evidence-based medicine and clinical
decision-support tools would guide decision-making; physicians would accept accountability for continuous
quality improvement through voluntary engagement in performance measurement and improvement; patients
would actively participate in decision-making and provide feedback as well as participate in quality
improvement activities at the practice level; and practices would go through a voluntary recognition process
to demonstrate that they have the capabilities to provide patient centered services consistent with the medical
According to a publication released by the Agency for Healthcare Research and Quality in December 2010 on
the Roles of Patient Centered Medical Homes and Accountable Care Organizations, “a concept that bridges the PCMH
and ACO perspectives on care coordination is ― integrated care…Integrated health care starts with good
primary care and refers to the delivery of comprehensive health care services that are well coordinated with
good communication among providers; includes informed and involved patients; and leads to high quality,
cost-effective care. At the center of integrated health care delivery is a high-performing primary care provider
who can serve as a medical home for patients…A well-functioning patient-centered medical home is a
necessary component of integrated care. True integration also requires the type of cohesive medical
neighborhood that is envisioned as a product of ACOs.”
The AOA concurs that the patient-centered medical home is a necessary component of integrated care – a
necessary component that we suggest is missing in the Medicare Shared Savings Program. ACOs built upon a
sound primary care foundation, with the proper principles and guidelines, will improve the overall quality and
efficiency of the health care provided as well as enhance the individualized care of patients. We believe that
ACOs within public and private settings can achieve these goals.
The AOA, however, has significant concerns with the Program as proposed. We outline here, for your
consideration, specific revisions to the overall construct of the proposed rule as well as detailed comments on
the criteria and methodologies used to create and implement ACOs.
Recommended Changes to the Construct of the Proposed Rule
The program should be extended from 3 to 5 years. We have significant concerns that the proposed 3 years
is not a sufficient amount of time for the formation and success of ACOs, especially when you consider the
aggressive quality and accounting reporting that is required under the proposal. In general, we support the
establishment of a 2-year “ramp-up” period, where ACOs could participate and share in savings based upon
less strenuous criteria that would be phased in. We believe this ramp-up period would allow interested entities
to create the primary care infrastructure needed to be successful in the program and make the necessary
investments to achieve the quality and performance standards outlined in the proposed rule. In addition, the
ramp-up time is warranted because a well-established electronic health record (EHR) system adopted by the
majority of the physicians and ancillary participants is needed for the ACO to succeed and at this time many
physicians and hospitals have not achieved this level of adoption.
ACOs should be eligible for shared savings on a first dollar basis in years 1 and 2. For years 3-5, all ACOs
would be subject to the one-sided methodology outlined in the proposed rule with modifications.
Payment Models for ACOs
The AOA recommends that ACOs and ACO-participating physicians not be obligated to accept payment
based upon the traditional fee-for-service payment system. We recommend that ACOs be encouraged to
develop and implement new and innovative payment models that promote care coordination and eliminate
fragmentation in payment methodologies. We recommend consideration for blended payment models that
provide payment for direct patient care activities, as well as a payment for those services provided as part of a
The quality performance standards should be revised and phased in. ACOs should be permitted to report on
quality measurements and be considered compliant in years 1 and 2. For years 3 to 5, ACOs would need to
meet the quality performance thresholds as outlined in the proposed rule with modifications.
Assignment of Beneficiaries
The AOA supports the criteria outlined in the proposed rule for the assignment of beneficiaries to an ACO,
with three recommendations. First, beneficiaries should be assigned on a prospective basis. Second, , we
believe that the code sets used to determine assignment should include inpatient evaluation and management
(E&M) codes for eligible primary care physicians. We believe this will allow for a more accurate and
consistent assignment of beneficiaries who receive a majority of their care from internal medicine physicians.
Third, we believe that care provided by a physician assistant, pursuant to the criteria outlined in the proposed
rule, be used to determine assignment to an ACO. Since PAs practice in a collaborative nature with
physicians, we believe it is appropriate that beneficiaries who receive a plurality of primary care services from
a PA be assigned based upon this data.
Participation Criteria for Primary Care Physicians
Primary care physicians should be allowed to participate in more than one ACO. This will require alterations
to the criteria used to assign beneficiaries to an ACO, but we feel it is important that primary care physicians
be allowed to participate in multiple ACOs as a means of ensuring continuous and comprehensive primary
care services. We also believe this change will alleviate, at least minimally, the impact of beneficiaries
receiving care outside the designated ACO.
We have significant concerns about the lack of shared responsibility on the part of Medicare beneficiaries in
terms of advancing the concept of receiving the best care within an ACO. It is our belief that, unless
beneficiaries are encouraged to seek and receive care within an ACO, the ability to improve quality and
achieve programmatic savings is hindered. We recognize the desire to ensure that beneficiaries retain their
ability to seek and receive care from any physician or institution. However, we believe that modest financial
incentives are warranted. To this end, we recommend that the beneficiary co-pay be reduced to 10 percent
for care provided by an ACO-participating provider or institution. The traditional 20 percent co-pay should
remain for care provided outside the ACO.
Recommended Changes to the Provisions of the Proposed Rule
The AOA believes the proposed rule’s complexities, administrative demands, quality standards, and financial
risks are too high and will discourage participation in the Program.
Based on the proposed requirements, only highly integrated group practices would have the resources to
participate. However, as we have learned recently, many highly integrated health care organizations such as
the Marshfield Clinic, the Geisinger Clinic, and 93 percent of the American Medical Group Association
members already have stated they will not participate due to the costs and complexities of the proposed
Program. If the requirements appear prohibitive to large practices, then small practices would almost
assuredly be unable to participate. We believe our recommendations will help to alleviate the overall
challenges to the Program.
Given the high level of interest in the agency’s proposed rule and the likelihood that significant changes will
be made to the rule, the AOA also recommends that CMS consider releasing an interim final rule with an
additional comment period.
Governance/Leadership and Management Structure
The AOA supports the agency’s proposal that 75 percent control of the governing body should be held by
the ACO participants. The AOA agrees with CMS that ACOs should be provider-driven. The ACO should
demonstrate strong leadership from among primary care physicians and other healthcare professionals in its
administrative structure, policy development, and decision-making processes; and processes to facilitate
operation as a true partnership among physicians and all other participants.
As we stated earlier, the recognized patient and/or family-centered medical home is the model that all ACOs
should adopt for building their primary care foundation. As discussed previously, the AOA is disappointed
that the Patient Centered Medical Home model, by name, does not play a prominent role in this Program.
The elements of the medical home which we described earlier coincide with the criteria CMS has proposed
for the ACO’s structure.
As CMS notes, ACA requires participating ACOs to “enter into an agreement with the Secretary to
participate in the program for not less than a three-year period.” The AOA does not believe CMS should
limit the agreement to three years, as the agency proposes. The AOA believes a longer agreement period
should be considered to allow ACOs more time to develop a Patient-Centered Medical Home management
team and to become fully operational.
In the February 2008 report: The Medicare Physician Group Practice Demonstration: Lessons
Learned on Improving Quality and Efficiency in Health Care, it was noted that “Some PGPs have had
issues with the speed of implementation for new interventions. Since the demonstration is currently active for
three performance years, PGPs need to organize cost saving and quality improvement interventions quickly
so they will be able to show positive outcomes early in the demonstration and earn performance
payments…Several PGPs, however, have indicated that motivating physician and organizational change has
taken longer than expected, and their interventions have not become fully operational until Year 2.” To
avoid the challenges experienced in the PGP demonstration, the AOA recommends that the agreement
period be extended to five years, allowing the ACOs the first two years to become fully operational.
Sufficient Number of Primary Care Providers and Beneficiaries
The Affordable Care Act requires participating ACOs to include “primary care ACO professionals that are
sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO…and that at a
minimum the ACO shall have at least 5,000 such beneficiaries assigned to it.” Therefore CMS proposes that
an ACO would be determined to have a sufficient number of primary care ACO professionals to serve the
number of Medicare beneficiaries assigned to it if the number of beneficiaries historically assigned over the
three year benchmarking period using the ACO participant tax identification number (TIN) exceeds the 5,000
threshold for each year.
The AOA believes the 5,000 beneficiary threshold is too low. The AOA agrees with CMS that “having too
few beneficiaries assigned to a participating ACO will impede determining whether changes in cost and
quality measures are likely a reflection of normal variation rather than real improvement in the delivery of
In its description of the Minimum Savings Rate (MSR) and its purpose, CMS states: “The MSRs are
estimated to provide confidence that an ACO with a given number of beneficiaries and assumed to be of
average national baseline per-capita expenditure and expenditure growth rate would be unlikely to achieve a
shared savings payment by random chance alone.” The agency also acknowledges “higher uncertainty”
regarding expenditures for smaller ACOs. As the agency notes, “as the number of assigned beneficiaries
increases, the MSR gets smaller. Conversely, as the number of assigned beneficiaries decreases, the MSR
expands thus making it significantly more difficult for an ACO to obtain shared savings.”
The agency’s position concerning the MSR is a clear indication that the potential for success is very low for
an ACO with a minimum threshold of 5,000 beneficiaries. A minimum threshold of 20,000 beneficiaries
would be more adequate for the purposes of the Program and reduce the level of uncertainties in achieving
the Program’s goals.
Processes to Promote Evidence-based Medicine, Patient Engagement, Reporting and Coordination
As part of the ACO application process, the ACO must describe the evidence-based guidelines it intends to
establish, implement, and periodically update. In addition, the ACO must describe its processes for patient
engagement, to report on quality and cost measures and how it will use the process to address the needs of its
Medicare population, and how it promotes coordination of care.
The AOA believes that organizational relationships and all relevant clinical, legal, and administrative
processes within the ACO should be clearly defined and transparent to physicians, other related healthcare
professionals, and the public. This includes methods of payment including the application of any risk
adjustment strategies for patients, quality management processes, and processes to promote efficiency and
value in delivery system performance.
In addition, ACOs should include processes for patient and/or family panel input in relevant policy
development and decision-making. ACOs also should promote processes to reduce administrative
complexities and related unnecessary burdens that affect participating practices and the patients/families to
which they provide service.
CMS proposes that ACOs provide documentation in its application describing its plans. The AOA
appreciates the agency’s effort to allow ACOs the flexibility to choose the tools for meeting the requirements.
The AOA believes the agency should set baseline standards and criteria. While flexibility is important, a
multiplicity of tools could create confusion in the marketplace for ACOs.
The ACA’s requirement that an ACO demonstrate that it “meets patient-centeredness criteria specified by the
Secretary” further illustrates the need for the Patient-Centered Medical Home to be the foundation of the
ACO. The Patient Centered Medical Home is a setting that facilitates partnerships between individual
patients, and their personal physicians, and when appropriate, the patient’s family.
The AOA believes these PCMH principles coincide with the criteria outlined in the Medicare Shared Savings
Program proposal. As we stated earlier, the personal primary care physician leads a team of individuals at the
practice level who collectively take responsibility for the ongoing care of the patients. The personal physician
is responsible for providing all of the patient’s health care needs or for arranging care with other qualified
professionals, including care for all stages of life.
The care is coordinated and/or integrated across all elements of the health care system and the patient’s
community. Care is facilitated by registries, information technology, health information exchange and other
means to assure that patients get the indicated care when and where they need and want it in a culturally and
linguistically appropriate manner.
Evidence-based medicine and clinical decision-support tools would guide decision-making; physicians would
accept accountability for continuous quality improvement through voluntary engagement in performance
measurement and improvement; patients would actively participate in decision-making and provide feedback
as well as participate in quality improvement activities at the practice level; and practices would go through a
voluntary recognition process to demonstrate that they have the capabilities to provide patient centered
services consistent with the medical home model.
Overall, the AOA believes ACOs should provide incentives for patient and/or family engagement in their
health and wellness. Patient-centered care is best determined by the physician and the patient and/or family
care giver. The core purpose of an ACO is to provide accessible, effective, team-based integrated care for the
defined population it serves, which includes assurances that care is delivered in a culturally competent and
patient and/or family-centered manner.
Beneficiary Experience of Care Survey
CMS proposes that ACOs be required to use the Clinician and Group Consumer Assessment of Healthcare
Providers and Systems (CAHPS) survey in an effort to measure beneficiaries’ experience of care. Scoring on
the patient experience of care survey would become part of the assessment of the ACO’s quality
performance. “Using this standard and well established survey instrument, we can more easily compare
outcomes and beneficiary satisfaction across ACOs…” according to CMS.
CMS does acknowledge that requiring the use of the CAHPs increases the administrative burden on ACOs
that currently do not use the specified survey. CMS also acknowledges that allowing ACOs to choose their
own survey tools would provide maximum flexibility for ACOs and would be the least disruptive to existing
ACO initiatives to survey beneficiary experience. The AOA supports the use of the CAHPS survey. We
believe the tools needed to measure beneficiaries’ experience of care should be standardized.
Evaluation of Population Health Needs and Consideration of Diversity
CMS proposes that ACOs should be required to describe in their application their process for evaluating the
health needs of their Medicare population, including consideration of diversity and a plan to address their
needs of their Medicare population. The Patient Centered Medical Home addresses population health needs
in culturally and linguistically appropriate manner. In addition, the AOA believes ACOs should include a
commitment to improving the health of the population served through programs and services that address
needs identified by the community including, for example, interfacing with state Title V programs, early
intervention programs, Head Start offices, and public education entities.
Implementation of Individualized Care Plans and Integration of Community Resources
The agency’s proposal further illustrates the need for the Patient-Centered Medical Home to be the
foundation of the ACO.
The agency’s requirements for marketing and communicating with beneficiaries are overly burdensome.
ACOs are required to meet patient-centered criteria specified by the agency. To include communications and
marketing is an over-extension of the agency’s authority considering that the ACA is silent with regard to
marketing activities and other forms of communications.
CMS proposes that all ACO marketing materials, communications, and activities related to the ACO and its
participation in the Shared Savings Program, such as mailings, telephone calls or community events, that are
used to educate, solicit, notify, or contact Medicare beneficiaries or providers/suppliers regarding the ACO
and its participation in the Shared Savings Program, be approved by CMS before use to protect beneficiaries
and to ensure they are not confusing or misleading. ACOs must have their marketing materials approved by
CMS. Any changes to these materials also would have to be approved by CMS.
The proposed rule does not specify when marketing materials would have to be approved or how long it
would take to get approval from CMS. Given the proposed January 1 implementation date, the AOA
believes it would be highly improbable for an ACO to have its marketing material ready and approved by
CMS in such a short timeframe. While we agree that marketing and communications should not mislead
beneficiaries, the agency’s requirements will slow down the ACO’s ability to reach out to beneficiaries. While
we understand the agency’s reasoning, we believe more clarification is necessary.
Options for Start Date of Performance Year
According to the ACA, the Shared Savings Program must be established by not later than January 1, 2012.
CMS recognizes the challenge of the short timeframe for implementation and noted that it gave a great deal
of consideration to alternative approaches. CMS also noted that the greatest barrier to any option other than
an annual uniform start date relates to beneficiary assignment. “If ACO agreements begin more often than
once a year, beneficiaries could be assigned to two ACOs for an overlapping period,” according to CMS.
The AOA appreciates the challenges that the agency faces in implementing this program according to the
statute’s timeframe. However, the AOA believes allowing an additional start-up time would provide more
flexibility to the program. The AOA supports the agency’s noted example of adding July 1 as an alternative
start-up date. As we stated earlier, we believe the entire agreement period should be increased to five years.
Timing and Process for Evaluating Shared Savings
CMS proposes using a six-month claims run-out period to calculate the benchmark and per capita
expenditures for the performance year. The agency acknowledges that while a six-month period would allow
the agency to more accurately determine the expenditures, it would delay the computation of shared saving
payments and the provision of feedback to participating ACOs.
The AOA recommends that the claims run-out period should be three months. The agency acknowledges
that neither the three month nor the six month period would offer complete calendar year utilization and
expenditure data therefore CMS would work with the Office of the Actuary to determine if the calculation of
a completion percentage is warranted.
The AOA is supportive of the agency’s data sharing proposals. The AOA commends the agency for
recognizing the importance of having complete information on the Medicare beneficiary available to the
ACOs to allow them to understand the totality of care provided to beneficiaries assigned to them which in
turn will help ACOs provide better care to their beneficiary population. The greater specificity of the data
will help ACOs focus on the sickest of their patients with more exacting care and treatment.
Among the lessons learned from the PGP demonstration was the need for timely beneficiary data. Some
PGPs noted data and reporting lags. According to the February 2008 report, “Ideally, rapid feedback of data
on assigned beneficiaries would enable PGPs to more quickly evaluate the impact of specific interventions
and revise them as needed during the demonstration. Claims data take some time to accumulate, however, so
rapid feedback has been difficult to achieve.”
In addition, the report noted: “Also challenging is the development of systems for transfer of accurate and
timely data. For example, external data for assigned beneficiaries who receive a significant amount of care
outside the PGP would be valuable for care planning but are unavailable. This lack of information presents an
obstacle to proper care management. Comprehensive, real-time, accurate, clinically relevant, and actionable
data is the ideal.”
The AOA is concerned about the agency’s proposal that would allow beneficiaries to opt-out of claims data
sharing. According to CMS, opting out would not affect the use of beneficiary data or assignment to the
ACO for purposes of determining such calculations as ACO benchmarks, per capita costs, quality
performance, or performance year per capita expenditures.” Complete data is crucial providing patient-
centered care. Therefore, patients that do not want their data shared should not participate in the ACO
Managing Significant Changes to the ACO during the Agreement Period
CMS proposes that the ACO may not add ACO participants during the course of the three-year agreement.
According to CMS, adding ACO participants during the course of the three-year agreement may deviate from
its approved application and jeopardize the ACO’s eligibility. Such changes may ultimately result in the
termination of the agreement and forfeiture of the 25 percent withhold of shared savings. The AOA believes
ACOs should be allowed to add participants and replace participants when they leave during the agreement
period. The ACO should notify CMS in order to have the addition approved. While the AOA appreciates the
agency’s concerns about the risk of anti-trust challenges, the agency also must recognize that allowing the
ACO to grow will allow the ACO to succeed in meeting the requirements of the Shared Savings Program.
Assignment of Medicare Fee for Service Beneficiaries
According to ACA, an ‘‘ACO professional’’ is defined as a physician (as defined in section 1861(r)(1) of the
Act, which refers to a doctor of medicine or osteopathy), or a practitioner (as defined in section
1842(b)(18)(C)(i) of the Act, which includes physician assistants (PA), nurse practitioners (NP), and clinical
nurse specialists (CNS).
Under the proposed rule, the assignment of beneficiaries to ACOs is to be determined only on the basis of
primary care services provided by ACO professionals who are physicians. In addition, the inclusion of
practitioners, such as NPs and Pas, in the statutory definition of the ACO professional is a factor in
determining the entities that are eligible to participate in the Program, but not in the assignment of
The AOA believes this provision should be modified. The AOA recommends that patients under the direct
care or supervision of a physician should be recognized for assignment to an ACO. Within the ACO
framework, recognition of care provided by non-physician providers should be limited to only those
who have a collaborative or supervisory agreement with physicians. If a NP practices independently,
then their patients should not be counted in the assignment to an ACO since there is no primary care
physician involved. With regard to the PAs, we believe all their patients should be recognized because every
PA has to have an agreement with a physician. This reinforces the premise that the physician is the leader of
the integrated health care team.
In addition, the AOA is concerned that allowing patients to seek services outside of the ACO will create
difficulties in tracking the patient’s care and the quality of that care. CMS acknowledges that “Medicare FFS
beneficiaries’ right to see any enrolled physician typically leads to more year to year variability in treating
patients.” We believe allowing patients to go outside the ACO for care is counterproductive particularly
because the ACO is responsible for the patient’s care. One of the challenges that participants in the PGP
Demonstration faced was the migration of their beneficiaries. We believe this challenge creates a lack of
control and accountability that will discourage physicians from participating in the program.
The AOA supports the fact that the Shared Savings Program is voluntary for the potential participants and
patients. While the AOA respects the beneficiaries’ desire to seek care where they are most comfortable, the
AOA also believes that patients must share in the responsibility of determining where and how they receive
care that is most appropriate and efficient for their needs. Patients who are assigned to an ACO should be
encouraged to stay within the ACO for their services. CMS should consider adding incentives for patients
who remain within the ACO for all of their services, such as reducing copayment from 20% to 10%.
Operational Identification of an ACO
CMS proposes that ACO professionals within the respective TIN on which beneficiary assignment is based,
will be exclusive to one ACO agreement in the Shared Savings Program. This exclusivity will only apply to the
primary care physicians. The AOA recommends that primary care physicians should be allowed to participate
in more than one ACO. Under the proposed rule, primary care physicians must be exclusive to one ACO
while specialists would not be restricted. Primary care physicians, specialty physicians, and other healthcare
professionals should have the option to participate in multiple ACOs. We believe restricting the primary care
physician would prevent them from participating in the program.
Definition of Primary Care Services
According to the proposed rule, the ACA defines ‘‘primary care services’’ as a set of services identified by
these Healthcare Common Procedure Coding System (HCPCS) codes: 99201 through 99215; 99304 through
99340; and 99341 through 99350. Additionally, CMS would consider the Welcome to Medicare visit (G0402)
and the annual wellness visits (G0438 and G0439) as primary care services for purposes of the Shared Savings
The agency proposes to assign beneficiaries to physicians designated as primary care providers who are
providing the appropriate primary care services to beneficiaries. CMS defines the services on the basis of the
select set of HCPCS identified in the ACA, including the G-codes associated with the annual wellness visit
and Welcome to Medicare Visit.
As CMS knows, primary care includes services in several settings such as the office, inpatient, critical care,
long-term care, home care, etc, therefore the AOA recommends that the definition of primary care services
include inpatient E&M codes: Observation – 99218-99220/Initial, 99224-99226/Subsequent; Hospital
Inpatient – 99221- 99223/Initial, 99231-99233/Subsequent; and Hospital Inpatient Consultation – 99251-
Prospective vs Retrospective Beneficiary Assignment to calculate Eligibility for Shared Savings/
Majority vs Plurality Rule
CMS proposes a combined approach of retrospective beneficiary assignment for purposes of determining
eligibility for shared savings balanced by the provision of beneficiary data and aggregate beneficiary level data
for the assigned population of Medicare beneficiaries during the benchmark period.
The AOA supports prospective beneficiary assignment that is updated quarterly with a retrospective review
to adjust for any changes to the beneficiary population that may occur during the performance year. As the
agency noted, proponents of the prospective approach cite “it is fundamental to population management to
be able to profile a population, identify individuals at high risk, develop outreach programs, and proactively
work with patients and their families to establish care plans.” The AOA believes the agency’s proposal makes
it difficult to determine which patients are participating in the program, thus creating obstacles for the ACO
in planning and investing in its overall program and impede the ACO’s ability to address patient needs in the
most effective way.
In addition, the agency proposes to implement the method of using a plurality of allowed charges for primary
care services to assign beneficiaries to ACOs. The AOA is concerned about the “snowbird effect”. If a
patient resides in Michigan, but spends six months of the year in Arizona, how will that individual be assigned
to an ACO? If the patient is assigned to an ACO in Michigan, how will that ACO maintain control over the
patient’s care in Arizona? Will the ACO be held accountable for the care in Arizona?
Beneficiary Information and Notification
The AOA supports the agency’s intent to develop a communications plan, including educational materials
and other forms of outreach to provide beneficiaries with information about the Shared Savings Program,
their utilization of services, the possibility of being assigned to an ACO, and the possible sharing of their
health information. The AOA believes the agency should collaborate with stakeholders on educating
beneficiaries about ACOs and the Program and seek stakeholder input on the materials CMS intends to
Quality and other Reporting Requirements
In general, the AOA believes nationally-accepted, reliable and validated clinical measures focused on
ambulatory and inpatient care should be used by ACOs to measure performance and efficiency and evaluate
patient experience. These measurement processes should be transparent, and informed by input from primary
and specialty care physicians and other healthcare professionals participating in the ACO.
In addition, ACOs should implement clinically integrated information systems to provide relevant
information at the point of care and assist in care coordination among multiple clinicians and across
transitions and sites of care. The AOA also believes recognition as an ACO and rewards for its performance
should be based on processes that combine achievement relative to set target levels of performance,
achievement relative to other participants, and improvement that have been developed with significant input
from primary and specialty care physicians and other healthcare professionals.
The AOA agrees with several of the principles CMS used to establish its quality measures, such as: Improve
individual health and population health; address an array of quality domains, priorities and aims including the
Institute of Medicine (IOM) six quality measures and the National Quality Strategy, support the goals of the
Shared Savings Program; align with other Medicare incentive programs; include quality performance
standards that are accepted by the professional and provider community (such as through National Quality
Forum (NQF) endorsement), offer opportunities for improvement, and exhibit sensitivity to administrative
However, the AOA believes the quality standards CMS has proposed--based on those principles-- are too
high. CMS proposes 65 measures. CMS proposes for the first year that the quality performance standard be at
the level of full and accurate measures reporting; for subsequent years, CMS plans to expand on the measures
and base the quality performance standard on a measures scale with a minimum attainment level. However,
according to the participants in the physician group practice (PGP) demonstration, “on average, it costs about
$30,000 just to program a single new quality metric.”
As we stated earlier, the agreement period should be expanded to five years. With that expansion, CMS
should use the first two years to phase in the quality standards which will allow ACOs time to implement the
quality measures and to ensure that their IT systems can handle the data. ACOs then could move from
reporting the measures in the first two years to being evaluated on performance in years three through five.
CMS discusses the use of the GPRO tool. The agency proposes that the existing GPRO tool be built out,
refined and upgraded to support clinical data collection and measurement reporting and feedback to ACOs
under the Shared Savings Program. According to CMS, the GPRO tool was first used by 36 large group
practices and integrated delivery systems to report quality measures under Physician Quality Reporting
System (PQRS) in 2010. The AOA questions whether the GPRO tool has been fully tested. Given the fact
that the GPRO tool will need to be built out, that means the GPRO tool will need to be thoroughly tested
before utilized in the Shared Savings Program.
The AOA commends CMS for its attempt to align the measures with existing incentive programs in an effort
to reduce the administrative requirements. CMS needs to provide more details on the measure specifications
and we call on CMS to solicit physician feedback at that time. CMS also proposes that 50 percent of an
ACO’s primary care physicians are meaningful EHR users by the start of the second Shared Savings Program
performance year in order to continue participation in the program.
The 50 percent requirement in the second year of the program is inconsistent with the EHR meaningful use
timeline. For example, participation in the EHR Incentive Program just began this year. The proposals for
Phase II of meaningful use have not yet been released. It is our understanding that implementation of phase
II may be postponed. In addition, the last year to initiate participation is 2014 and payment adjustments for
those who are not meaningful users do not go in effect until 2015. The AOA recommends that CMS phase in
the 50 percent requirement over the recommended five year agreement period.
According to CMS, the aggregated domain scores will determine the ACO’s eligibility for sharing up to 50
percent of the total savings generated by the ACO under the one-sided model and 60 percent under the two-
sided model. Under the AOA’s recommended five-year agreement plan, which does not include the two-
sided model, the scoring would not begin until year three. The AOA recommends that the shared savings be
increased to 70 percent for ACOs for years three through five. Given the level of investments that will be
required of ACOs, we believe their level of shared savings should be higher otherwise participating in the
Shared Savings Program will be cost prohibitive.
CMS proposes to set benchmarks for each measure using Medicare Fee-For-Service (FFS) claims data,
Medicare Advantage (MA) quality performance rates, or where appropriate, the corresponding percent
performance rates that an ACO will be required to demonstrate. CMS would determine the Medicare FFS
rates by pulling a data sample and modeling the measures. For MA rates, the agency would check the
distribution from annual MA quality performance data and set the benchmark accordingly. However, the
agency’s description of benchmarking the measures is somewhat unclear. CMS needs to provide more clarity
on how it will set the thresholds for each of the quality measures. In general, the AOA believes the agency’s
proposals for scoring, benchmarking, and minimum attainment levels are too complex.
In addition, the AOA commends CMS for aligning the quality measures with current programs such as PQRS
and the EHR incentive program. However, physicians participating in PQRS have experienced challenges
since the beginning of the program. The criteria, quality measure specifications, the performance level and
scoring mechanism must be clear and transparent in the Shared Savings Program. In addition, ACOs must
have an opportunity to challenge the determinations of CMS if there are discrepancies or disagreements
regarding the scoring. It is only within this past year, that CMS instituted an informal review process for
participants in the PQRS program.
The AOA also is concerned about the large amount of data that CMS will receive and whether the agency has
the resources to handle the incoming data. Data submissions will vary based on what software system is used
by the ACO and several of the measures cannot be extracted from electronic health records.
The ACA provides that ACO participants will continue to receive payment under the original Medicare FFS
program under Parts A and B in the same manner as they would otherwise be made. The AOA recommends
that ACOs and ACO-participating physicians not be obligated to accept payment based upon the traditional
fee-for-service payment system. We recommend that ACOs be encouraged to develop and implement new
and innovative payment models that promote care coordination and eliminate fragmentation in payment
methodologies such as blended fee-for-service payments, prospective payments, episode/case rate payments,
and partial capitation payments.
The AOA’s recommendation regarding shared savings and related proposed provisions is based on a five-year
agreement period with a minimum beneficiary threshold of 20,000. Once the Minimum Savings Rate is
exceeded, ACOs should be eligible for shared savings on a first dollar basis in years 1 and 2. In years three
through five, the requirement for ACOs would continue to be phased in. The methodologies for the shared
savings would take effect as proposed by CMS with the following modifications: the maximum sharing rates
for the one-sided model would be increased; the Minimum Savings Rate would be a flat two percent. There
would be no minimum loss rate. The maximum sharing cap would be 10 percent. Also in year three, primary
care practices must be recognized as Patient Centered Medical Homes. In addition we support the agency’s
proposal to increase the shared savings rate for ACOs that include a federally qualified health center (FQHC)
and/or rural health clinic (RHC).
At no time should ACOs be subject to a 25 percent withholding rate as proposed by CMS. The AOA
recommends that CMS withdraw this proposal. The financial investment to establish an ACO could run as
high as $2 million. ACOs need their cash flow to keep the organization running. To subject the ACO to the
25 percent withhold would undermine their ability to remain viable.
CMS has acknowledged the necessity of upfront capital for ACOs when it announced that the Center for
Medicare and Medicaid Innovation (CMMI) is considering an Advance Payment Initiative to test whether and
how pre-paying part of future shared savings could increase participation in the Program. CMMI has
proposed this initiative to address the concerns of providers about the lack of upfront capital for meeting the
requirements and participating in the Program. While the AOA commends the agency for considering this
initiative, we believe eliminating the 25 percent withhold also would alleviate the financial strain of the
Program and provide upfront capital for ACO investments. In addition, CMS proposes that an ACO must
make payment in full to CMS of any shared losses within 30 days of receipt of notification. In light of the
nation’s economic and financial challenges, the AOA recommends that the payment timeline be extended to
CMS is required by law to establish a benchmark for each agreement period for each ACO using the most
recent three years of per-beneficiary expenditures for parts A and B services for Medicare fee for service
beneficiaries assigned to an ACO. The benchmark shall be adjusted for beneficiary characteristics and other
factors the Secretary determines appropriate.
As we stated earlier, the AOA opposes the agency’s proposal to use retrospective beneficiary assignment to
calculate eligibility for shared savings. ACOs will not know if a patient’s costs will be included until the end
of the agreement year. The benchmarking is based on projections and therefore ACO will not know its actual
benchmark. If ACOs lack information on their expenditure benchmarks, they will be unable to estimate their
shared savings which will discourage participation. CMS also proposes to calculate a single benchmark risk
score for each ACO. The benchmark risk score will be calculated by applying the CMS-Hierarchical
Condition Category (HCC) model to the assigned beneficiary population in each year of the three year
benchmark. Changes in the assigned beneficiary population-risk-score from the three–year benchmark
period during the performance year will not be incorporated. Determining an adequate risk adjustment
strategy is challenging. The AOA questions the reliability of the agency’s proposed method to adjust for
patients who are sicker and require closer follow-up and more expensive treatments.
We agree with CMS decision to not remove indirect medical education (IME) and disproportionate share
hospital (DSH) payments from the per capita costs included in the benchmark for an ACO. The AOA
supports the agency’s proposal to exclude Medicare expenditures or savings for incentive payments and
penalties for value-based purchasing initiatives such as PQRS, electronic prescribing (E- Rx), and EHR
incentives from the computations of both benchmark and actual expenditures during the agreement period.
CMS proposes to employ a national growth rate in Medicare Parts A and B expenditures for FFS
beneficiaries for trending forward the fixed benchmark. In addition, CMS proposes to update the benchmark
by the projected absolute amount of growth in national per capita expenditures. The AOA supports these
Future participation of underperforming organizations
CMS proposes that an ACO which experiences a net loss during its first three-year agreement period may not
re-apply to participate in the Shared Savings Program. Given the fact that it takes two years for an ACO to
become completely operational, it is likely that an ACO will experience a net loss during its three-year
agreement, which is why the AOA recommends that the agreement period be extended to five years. We
believe the longer agreement period will decrease the ACO’s likelihood of experiencing net losses. The AOA
believes ACOs should be allowed to re-apply to participate. Denying ACOs an opportunity to re-apply would
discourage the development of ACOs.
Monitoring and Termination of ACOs
CMS proposes that ACOs and its participants give the Department of Health and Human Services (HHS) the
right to inspect all books, contracts, records, documents and other evidence sufficient to enable an audit,
evaluation and inspection. Based on its experience, CMS knows that audits are costly and burdensome to
Medicare providers. The agency must have just cause to audit an ACO.
Monitor Avoidance of At Risk Beneficiaries
The AOA believes the structure and related payment systems of the ACO should be implemented and
monitored to prevent "adverse unintended consequences," such as poor access to physicians, denial of
needed care, or discrimination against the treatment of the more medically complex or difficult-to-treat
patients. We also believe that at-risk patients should include non-compliant patients. However, the AOA also
questions the likelihood of an ACO taking steps to avoid at-risk patients, since CMS is responsible for
assigning the patients to the ACO.
The ACA authorizes the Secretary to waive certain fraud and abuse laws to carry out the provisions of the
Shared Savings Program. ACOs should be adequately protected from existing antitrust, gain-sharing, and
similar laws that currently restrict the ability of providers to coordinate care and collaborate on payment
models. The AOA agrees in principle with the measures to create safety zones to help ACOs avoid anti-trust
conflicts. However, the methodology to be used raises questions and the need for clarification. For example,
the PSA analysis will be a costly burden on physicians attempting to form an ACO. In addition, ACOs that
fall between the safety zone of 30 percent and 50 percent mandatory review are not required to undergo a
review even though they are outside the safety zone. This creates a gray area and uncertainty for the ACO.
Finally, CMS does not specify how an ACO should distribute its shared saving with its individual ACO
participants. In general, the AOA believes payment models and incentives implemented by ACOs must align
mutual accountability at all levels, fostered by transparency and focused on health promotion and healthy
development, disease prevention, care management, and care coordination. Those models and incentives
should adequately reflect the relative contributions of participating physicians and other healthcare
professionals to increased quality and efficiency and demonstrate value in the delivery of care. Payment
models also should recognize effort required to involve family, community/educational resources and other
pertinent entities and activities related to care management/care coordination of patients with complex
conditions. In addition, practices participating within the ACOs that achieve recognition as medical homes
by NCQA, other nationally accepted certification entities, and/or related processes (e.g. state government
recognition) should be provided with additional financial incentives.
The AOA believes ACOs hold great promise in improving the quality of patient care while holding down
costs, as the Nation moves toward a more integrated health care system. However, creating a program under
Medicare that is overly burdensome and costly will slow down such progress. We hope CMS will give serious
consideration to the comments it receives and works to revise the Medicare Shared Savings Program so that it
does not hinder us in providing high quality and efficient patient-centered health care.
Karen J. Nichols, DO
C: Jonathan Blum, Director of Medicare Services
Richard Gilfillan, MD, Director, Center for Medicare and Medicaid Innovation