A prominent insurance company leader pushed back on the notion of easing financial risks, citing concerns that such a step would soften the impact of the ACO program.


Sept. 26—The former Medicare official credited with ushering in accountable care organizations (ACOs) raised concerns about their future viability this week.

Richard Gilfillan, MD, was a leading proponent of Medicare’s effort to launch ACOs when he served as director of the Center for Medicare & Medicaid Innovation (CMMI) at the Centers for Medicare & Medicaid Services (CMS). He has continued supporting ACOs since his move several years ago to the private sector. This week he raised new warnings about their future viability.

“The irony of the ACO world, of course, is that CMS is starving ACOs, making the deals as hard as they can be and forcing ACO providers to say, ‘I’m just in it so I can move people to Medicare Advantage,’ which will cost the federal government more,” Gilfillan said at a Washington meeting of the National Academy of Medicine (NAM).

Gilfillan, president and CEO of Trinity Health, said it was time to “make some significant adjustments” to Medicare’s ACO program.

“We need accountable care 2.0,” Gilfillan said. “Why would we think we got it right to begin with? This is so complex; we know we’re going to get it wrong.”

Gilfillan’s criticism of the current Medicare ACO models does not stem from a lack of hands-on experience. His health system—the largest not-for-profit system in the nation—operates a Next Generation Medicare ACO among its 15 ACOs.

“I’m not up here saying we’re not trying to do it; we are doing it, but most providers are not in a position to do it,” Gilfillan.

A contrary view was offered by Lewis Sandy, MD, executive vice president for clinical advancement at UnitedHealth Group.

“My reaction is to aim higher,” Sandy said at the NAM event. “I’m a little worried about making it easier to play by having a relatively modest impact.”

As Gilfillan sees it, the need for changes does not stem from provider resistance to the ACO approach.

“The difference between now and the 1990s is that providers feel good about the accountable care work that is going on,” Gilfillan said. “It’s not like the nastiness of gatekeeping and everything we had in the 90s. Providers feel good about this.”

Poor financial incentives are the obstacle keeping more providers from embracing ACOs—specifically, Track 1 of the Medicare Shared Savings Program (MSSP). That model is the most popular entrance point for providers into ACOs, with 95 percent of the 434 Medicare MSSP ACOs currently in Track 1, which initially carries upside-only risk.

“It doesn’t make sense to go there,” Gilfillan said, referring to the current financial incentive structure of MSSP Track 1.

Needed Changes

Specific ACO changes that are needed, according to Gilfillan, include moving to allowing participating providers to earn up to 80 percent—instead of the current 50 percent limit—of shared savings generated in the upside-only MSSP model “for a while.”

Gilfillan quoted a founder of the British National Health Service, Aneurin Bevan, who said he was able to get physicians to agree to the system by designing it to “stuff their mouths with gold.”

“I don’t think mandatory is the way to go; I’m optimistic there’s still a chance to engage our provider system in willingly embracing Triple Aim care,” Gilfillan said.

The latest evidence of physicians’ negative views of ACOs was provided by a new national surveyof 17,236 physicians by The Physicians Foundation. Only 18.5 percent of physicians in ACOs viewed them as likely to enhance quality or decrease costs, according to the survey. Meanwhile 37.5 percent of ACO physicians said they are likely to decrease quality and increase costs.

Other needed changes apply to rules implementation for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), specifically to allow more physicians to qualify for participation in alternative payment models (APMs). The list of qualifying APMs in the proposed rule excluded Track 1 MSSP ACOs. Gilfillan also urged the use of waivers to give physicians up to five years to get results before kicking them out of the APM track.

The experience of high-performing integrated practices showed that it takes time to provide highly coordinated, effective care, so UnitedHealth’s Sandy agreed that providers may need more time to meet ACO requirements. Medicare also should give ACO participants “the tools and supports they need to succeed,” Sandy said.

Additional Changes

Other needed changes include technical changes to ACO benchmarking, according to Gilfillan.

An analysis by Premier found the percentage of an ACO’s shared savings in the latest MSSP resultswas somewhat related to the size of its historical benchmark.

Peter Orszag, a vice chairman at Lazard and former senior Obama official, agreed that Medicare should avoid mandating ACO participation and urged more use of mandatory payment bundles. However, Orszag lamented the “discouraging” recent resultsfrom Medicare’s Bundled Payments for Care Improvement (BPCI) initiative, on which the recent CMS mandatory bundled payment pilots were based.

The ACO changes urged by Gilfillan followed calls by other stakeholders for other changes to the program. For instance, Premier recently urged refinement of the MSSP initiative to include permanent payment waivers, additional shared savings for top performers, relief from sequestration, and more flexibility to move up the risk continuum.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Monday, September 26, 2016