ACOs who apply for this first wave of the Medicare Shared Savings Program will be shouldering significant risk, especially given the unknowns left after the Proposed Rules were released. Few organizations will be in a position by January 2012 to even apply for participation in the shared savings program, in all probability. Those ACOs that apply for participation in later years will position themselves to learn from the “early adopters.”
First, the cost in both time and money to complete the application is steep. There are a number of provisions that require an ACO to create from scratch various processes, defend those processes to CMS in their application, and then wait for CMS to decide whether the ACO meets the CMS requirements. CMS stated repeatedly in the Proposed Rules that it does not intend to allow all ACOs that apply to participate.
Although the rules provide some guidance, many of the details are lacking in the proposed regulations. For example, CMS left with little or no comment various ACO statutory requirements. Instead, CMS expects in the ACO application to the Shared Savings Program a description, among other things, of how the ACO proposes to:
- distribute the “shared savings” it will receive from CMS;
- implement evidence-based medicine;
- promote beneficiary engagement; and
- coordinate care.
These are among the requirements that the proposed rule suggests should be well explained and supported in the ACO application, but does not give much guidance as to what CMS expects.
The costs required for an ACO to qualify for the Shared Savings Program are not limited to the procedural. The Proposed Rules suggest that CMS is requiring sophisticated health IT systems for coordination of care, reporting metrics, developing a population health data management capability, and implementing practice and physician level data capabilities. Further, until the Shared Savings Program has some history, it is unclear whether the cost of developing and implement an ACO will be more than the potential shared savings to the ACO.
We will comment on the application process in a future blog. But suffice it to say, there will be a steep learning curve for the first wave of ACOs applying to participate in the Medicare Shared Savings Program. CMS notes in its commentary on the open-ended application requirements regarding processes to promote evidence-based medicine and patient engagement that “over time, as we learn more about successful strategies in these areas and as we have more experience assessing specific critical elements for success, the Shared Savings Program eligibility requirements . . . may be revised.” Smaller networks, or those entities with less tolerance for risk or without adequate development dollars, may be well advised to wait out the initial period of uncertainty.
This is not to suggest that organizations should delay reorganization in anticipation of future participation in the Shared Savings Program. Structural changes should be undertaken as soon as practicable should providers want to create an ACO. But the first applicants for the Shared Savings Program will have the responsibilities that come with a program under development.
