May 12, 2011 — An association representing the nation’s largest multispecialty medical groups is telling the Obama administration to simplify proposed rules for accountable care organizations (ACOs) if it expects physicians to sign up for them.

Created by the new healthcare reform law, ACOs bring together physicians, hospitals, and other providers in various combinations for the purpose of coordinating the care of Medicare patients who otherwise might fall through the clinical cracks and run up a higher bill as a result. Beginning in 2012, ACOs can share in any savings they produce for Medicare, provided they also meet certain quality-of-care standards. The bonus would come on top of their usual fee-for-service revenue.

The Centers for Medicare and Medicaid Services (CMS) touts ACOs as a way to reward providers for the quality of their patient care, as opposed to the quantity of services rendered. First, however, it must persuade physician groups to sign up, which may be a hard sell. In a letter sent yesterday to CMS Administrator Donald Berwick, MD, the leader of the American Medical Group Association (AMGA) said that 93% of its members would not enroll in an ACO under proposed regulations that CMS released March 31.

“On its face, [the proposed rule] is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive,” wrote AMGA President and Chief Executive Officer Donald Fisher, PhD. His association represents large medical groups such as the Mayo Clinic and integrated healthcare delivery systems, in which more than 113,000 physicians practice.

Dr. Fisher said AMGA members find fault in particular with the formula for splitting Medicare savings with providers, the requirement for risk-sharing that exposes providers to financial losses, and quality measurement requirements. As it stands now, ACOs would have to meet 65 different quality standards to receive any bonus.

For example, at least 50% of primary care providers must demonstrate “meaningful use” of electronic health record (EHR) systems by the start of the second year of a 3-year “shared savings” program. The expression “meaningful use” comes from the economic stimulus legislation of 2009 that promises incentive payments under Medicare and Medicaid to providers if they deploy EHRs in ways that improve patient care while cutting costs.

Leaders in organized medicine worry that small physician practices may lack the resources — such as sophisticated EHRs — needed to jump through ACO hoops. The medical groups in the AMGA are arguably the most sophisticated, computerized, and well-heeled of all, and the fact that even they find the ACO too complicated to participate in is telling. Dr. Fisher hinted as much when he wrote, “As you know, most policy experts believe multi-specialty medical groups are best poised to become ACOs in the short term.” Then he dropped the bombshell that the vast majority of his members view ACOs as unattractive.

The AMGA promised to submit a more detailed critique of the proposed ACO regulations during the official comment period, which runs through June 6. Other provider associations are filing responses as well, all in the hopes of reducing the hassle factor. CMS is expected to release a final version of its regulations this summer. More information about ACOs is available on the federal Web site