This analysis of the Centers for Medicare and Medicaid Services (CMS) proposed rule for Medicare Shared Savings Accountable Care Organizations (ACOs) from Ingenixis subtitled “An Important First Draft, But Fixes – and Private Sector Efforts – are Needed”. The report begins with an acknowledgement of the challenge before CMS: “the draft rules are a Herculean first effort with much to admire, especially given the enormously complicated health care system that health reform is trying to reshape, the often conflicting stakeholder views, and the ambitious nature of the ACO concept.  Specifically, the draft seems an honest attempt to move the ball forward by balancing divergent views and addressing unanswered questions. ”

However, the analysis then concludes that the proposed regulations discourage broad participation, discourage innovation, and don’t do enough truly align incentives. Specifically, the analysis notes as problematic the complicated regulatory demands for ACO formation, application, operation, and reporting; difficulty in achieving return on investment; delays in access to data that will delay shared savings payments; a weak, retrospective attribution mechanism; and not enough movement toward properly aligned incentives.

Finally, the analysis makes specific recommendations for changes in the final regulations, including a three-track model, with the first track being a no risk/loss model, the second track being the proposed two-sided model proposed by CMS, and a third track that would allow partial to global capitation, with prospective attribution of participating beneficiaries and ability to incentivize beneficiary co-payments for increased patient engagement.

Ingenix has promoted the term “Sustainable Health Communities” as an alternate to accountable care organizations.

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