Do ACOs Stack the Deck Against Private Practice Family Medicine?

ACOs have been shopped as possessing flexible application along the spectrum of clinical practice. Indeed, comments by CMS administrators have explicitly contended that the model was created to allow all physician practice groups – large to small – to have the opportunity to join in the shared savings program. However, once you dig into the regulations behind the rhetoric, it quickly becomes apparent that small private practice is meant to quickly sink, and private practice in general may barely be able to swim. It is beyond clear that the specifics of the ACO rules and regulations are outside of the scope of outpatient medicine, if not exclusionary to the private practice setting altogether.

1) Start-Up Cost

The cost of starting an ACO is the first preventive hurdle – and it is quite a big hill. While CMS conservatively proposed an estimated cost between $1,700,000 - $1,800,000, the American Hospital Association (AHA) sees it more in the range of $5,315,00 - $12,000,000. And those are just estimated start-up costs, they do not take into account annual maintenance requirements. Needless to say, this is well beyond the scope of most private practice settings.

Robert Jeibenluft recently suggested in the New England Journal of Medicine that, “provider networks that do not achieve meaningful clinical integration will probably not receive shared savings from Medicare, and most will ultimately fail”1

2) Quality Measure Reporting

ACOs will be required to measure and report along 65 specific quality metrics. This is an all-or-nothing approach, and each ACO has no flexibility in reporting. Most importantly, there is some concern that it will be impossible to meet all 65 requirements outside of the hospital setting. For example, among the discussed quality measures to report include hospital readmission numbers and assessment of the nine hospital-acquired conditions. How does a large scale family practice setting adjust to these requirements?

A flood of comments were submitted to CMS regarding these concerns. While the regulations are still a product of the proposed rule, it is to be seen how CMS will respond. At this stage in the game, awareness is fundamental. While the ACO model has been marketed well from a national standpoint – and it is gaining traction and popularity – it is important to recognize this is not necessarily an all-inclusive or all-applicable solution. Sure, the big hospitals have the chance to buy into the shared-savings program. But, let’s just hope it doesn’t drive out the little guy at the heart of medicine – the private practice family physician.

1. Leibenluft, Robert F. J.D. (2011) ACOs and the Enforcement of Fraud, Abuse, and Antitrust Laws. New England Journal of Medicine, 364: 199-101.