Ken PerezRemember Myspace? It is a waning social networking site that succeeded Friendster and at one time grew to be dominant. Wikipedia recounts, “From 2005 until early 2008, Myspace was the most visited social networking site in the world, and in June 2006 surpassed Google as the most visited website in the United States. In April 2008, Myspace was overtaken by Facebook in the number of unique worldwide visitors, and was surpassed in the number of unique U.S. visitors in May 2009…Since then, the number of Myspace users has declined steadily in spite of several redesigns.” 

I wonder if the Centers for Medicare & Medicaid Services (CMS)—which helped advance the accountable care organization (ACO) concept and the Medicare Shared Savings Program (MSSP; section 3022 of the Affordable Care Act) by issuing proposed and final rules for the program in March and October 2011, respectively—is at risk of becoming the Myspace of ACOs, overtaken by commercial payer-led ACOs, which are gaining momentum.

According to a National Association of ACOs survey, about two thirds of the MSSP ACO participants are not likely to adopt a two-sided risk model in the next round of contracting. Further, in an April letter to Patrick Conway, acting director of CMS’s Innovation Center, the American Hospital Association (AHA) warns that “very few—if any—additional health care organizations will apply to participate in the Pioneer ACO model as currently constructed.” The AHA recommends a handful of salient changes to the Pioneer ACO model and nine specific changes to the MSSP. Not surprisingly, all of these recommendations seek to ease the rules of the programs, making ACOs easier to operate and more financially attractive for provider organizations.

How will CMS respond to these requests? Based on history and political realities, I would contend that CMS will agree with many of the recommendations and modify the programs accordingly.

After receiving severe criticism of its proposed rule for the MSSP, CMS incorporated several of the requested changes in the MSSP’s final rule, to the applause of several provider associations. Thus, CMS has demonstrated an ability to be flexible with its ACO programs. 

Politically, because ACOs are the lead dog in the ACA’s pack of fee-for-value healthcare delivery reforms, the Obama administration cannot afford to have mass departures of ACOs or negligible sign-ups for the next classes of the MSSP and Pioneer programs. Given the National Association of ACOs survey results and the AHA letter to CMS, it is likely that a hard-line stance by CMS would result in a significant decrease in the number of Medicare ACOs, which could signal the beginning of the end for the Medicare ACO experiment. If that were to occur, healthcare providers might accelerate their participation in less-risky and more financially attractive commercial ACO programs.

This year is a defining moment in the evolution of Medicare ACOs. I’m betting that CMS will help healthcare providers walk before it asks them to run. 

Ken Perez is vice president of healthcare policy for Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.


Publication Date: Thursday, June 05, 2014