Proposed Medicare ACO Rules Need to Strike Better Risk-Reward Balance to Facilitate Academic Health Center Participation

Jun 09, 2011, 11:30 ET from Association of Academic Health Centers

AAHC Urges Revisions to Increase Interest, Protect Patient Access to Care

WASHINGTON, June 9, 2011 /PRNewswire-USNewswire/ -- Earlier this week the Association of Academic Health Centers (AAHC) submitted formal comments to the Centers for Medicare & Medicaid Services (CMS) concerning CMS' proposed rulemaking relating to Accountable Care Organizations (ACOs).  "Although ACOs are conceptually aligned with academic health centers' mission, the proposed rule appears to offer too few rewards and imposes too many startup costs and financial risks to be embraced by more than a handful of academic health centers," said Dr. Steven A. Wartman, AAHC President & CEO, urging CMS to modify the proposed rule to remove barriers to academic health center participation.

"Academic health centers, with their strong voluntary (and often mandatory) social missions, their commitment to evidence-based medicine, their track record of innovation, and their growing focus on the social determinants of health, are natural partners for ACOs," Dr. Wartman continued.  "As a result, the success of the ACO program would be seriously compromised if academic health centers do not participate in the program in significant numbers.  Unfortunately, it appears that few academic health center leaders currently believe the proposed rule strikes a sufficient balance of risks and rewards to justify the substantial investment necessary for them to organize or participate in an ACO."

AAHC member institutions cite several reasons for their reluctance to organize or participate in ACOs, as currently constituted in the proposed regulations:

  • The extensive compliance and reporting requirements are overly burdensome, even for fully-integrated academic health centers that own their hospitals and practice plans.
  • The inclusion of IME and DSH payments in the benchmark strongly discourages academic health center participation in ACOs, which will have a significant adverse impact on access to care for vulnerable beneficiaries who rely on academic centers as providers of last resort.
  • The uncertain upside gain from organizing or participating in an ACO does not sufficiently offset the substantial downside risk and start-up costs associated with organizing or participating in an ACO for most academic health centers.

The comment letter can be downloaded from the AAHC website,

An academic health center, as defined by AAHC, is an educational institution that includes a medical school and at least one additional health professions school (e.g., nursing, dentistry, pharmacy, allied health, public health, veterinary medicine, graduate school), and either owns or is affiliated with a hospital or health system.  In the course of carrying out their mission to advance and apply knowledge to improve health and well-being, academic health centers engage in three essential activities: educating the nation's health workforce through their health professions schools; conducting cutting-edge biomedical and clinical research; and providing comprehensive patient care.

SOURCE Association of Academic Health Centers