How a Bipartisan Bill Could Improve ACOs

Two weeks ago, we discussed results from two different Accountable Care Organization (ACO) programs in Medicare, which showed an improvement in quality but only modest savings so far. But ACOs are still in their early stages, giving policymakers plenty of opportunities to learn lessons on how to fine-tune them to better serve Medicare beneficiaries and taxpayers. Last week, Reps. Diane Black (R-TN) and Peter Welch (D-VT) released a bill (H.R. 5558) to do just that, establishing greater incentives for high-quality, low-cost care from providers and more engagement with patients. Many of these goals are consistent with policy options that were discussed at the Dartmouth Medicare conference, co-sponsored by Fix the Debt, where experts emphasized ways to achieve more coordinated care and better patient engagement.

The bill would make a number of changes to give ACOs greater flexibility to accomplish their goals, specifically:

• Providing regulatory relief for ACOs that use two-sided risk models and that make greater use of telehealth and remote patient monitoring;
• Authorizing reduced cost-sharing for primary care services; and
• Allowing ACOs to establish other incentive programs for patients to ensure their own wellness.

In addition, beneficiaries would be prospectively assigned an in-network primary care physician, who would be required to give beneficiaries information about the ACO at initial check-ups.

The Welch-Black bill would also instruct the Department of Health and Human Services (HHS) to undertake demonstrations to see how ACOs could be improved. The HHS Secretary would be required to look into constructing payment benchmarks to account for regional differences in spending and care patterns among patients with different socioeconomic statuses. In addition, the bill would have the HHS Secretary establish a global capitation payment model in which the ACO could get a fixed payment for care and assume the risk for the actual cost of care over a certain period of time.

Welch-Black partially overlaps with a plan put out by Senate Finance Chairman Ron Wyden (D-OR) and Sen. Johnny Isakson (R-GA) earlier this year (Welch co-sponsored the House version of that bill).

It's encouraging to see lawmakers trying to boost efforts to reform health care delivery and move away from fee-for-service reimbursement. Hopefully, they remain engaged as further data comes in on ACOs and other alternative payment models, so they can build on what's successful.