Maria Todd: Why I still have serious doubts about many ACOs’ viability

When I tendered my manuscript in Physician Integration and Alignment: IPAs, PHOs, MSOs, ACO and beyond (2012, CRC Productivity Press), I was very candid about my dubious impressions of the Pioneer ACO models.  I was not far from accurate. CMS received pushback and contention with the 32 Pioneer ACOs in 2013. The Pioneers asked CMS to reconsider the quality metrics they are required to report on in 2013, urging CMS to hold them to reporting status only in 2013 instead of tying payments to performance. In April, CMS denied that request.  we all know what happened after that:  Nine Pioneer ACOs quit the program. Seven announced they planned to transition to the MSSP program, while two dropped out of CMS’ ACO program completely.

On the commercial side, other integrated health delivery organizations (I refuse to call them ACOs because they weren’t deemed such by CMS and this is an official designation) have grown significantly, much like what we experienced in the 1990s, when I consulted to about 250 of them in all shapes, sizes, configurations, states, and specialties.  I was instrumental in strategic planning, organizational infrastructure, setting the leadership and culture, selecting the software and operations teams, and marketing the networks to health plans, insurers, and employers. Many made a lot of money, some failed. Some were the victims of poor legal counsel, one was the victim of such poor counsel that the president almost went to jail in orange scrubs, courtesy of the Securities Exchange Commission. I testified in that one as an expert on the economic losses sustained by the IPA and MSO, when they sued the attorney together with a high profile forensic economist in a case that took months and months and a massive appeals court action to win. (MainLine -Philadelphia).

In these commercial networks, many are being sponsored by the health plans themselves as a new twist on contracting. Some alarm me in what they expect the doctors to swallow hook, line, and sinker.  I am also alarmed by the lack of training and skills and poor due diligence vetting before agreeing to share financial risk with payers.  Even those “ACOs” operated by larger health systems don’t appear to have the right training and robust policies and procedures to carry out due diligence before accepting risk. Perhaps they don’t know what they don’t know?  In these cases, I have put many of them on a private “watch list”.  I consider their prognosis “guarded at best”.

If your ACO has been invited to participate in a contractual relationship, it is important that you ask the right questions — about age, gender, enrollment, zip code distribution, socioeconomic status, lifestyle implications, occupation and SIC codes of the plan members you will be assigned. There are many predictive modeling tools out there, some of which may cost you $25,000 to $50,000 to run the data on your own, but that should be provided as part of the due diligence checking and business information shared by the plan BEFORE you sign and accept risk.

If you are unsure about what I am so concerned about, please call me to chat or as your question below. I am happy to give you a complimentary private 15-minute “curbside consult”.  What I share might save your ACO from financial distress of the worst kind.

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