Major healthcare stakeholders speaking out with criticisms of federal ACO rules

It may be that the Obama administration bit off more than it can chew with its first release of proposed rules for Accountable Care Organizations (ACO). Lining up in opposition to these rules is an impressive list of the nation’s most respected healthcare organizations. Included are Mayo Clinic, Geisinger Health System, Cleveland Clinic, and Intermountain Healthcare.

Pathologists and clinical laboratory managers will undoubtedly recognize the significance of this opposition. Health officials within the Obama administration have regularly stated that ACOs should be organized to deliver the same type of tightly integrated healthcare that is the standard at Mayo Clinic, Geisinger Health, Cleveland Clinic, and Intermountain Health. Thus, it is not auspicious for the Obama administration that these four institutions are making public statements that, under the ACO rules as now written, they are not inclined to participate.

Significant Criticism Directed at Federal Rules for ACOs

In its analysis of the situation last month, the Commonwealth Fund’s Washington Health Policy Week in Review published statements about ACO participation from leaders within these health systems. First up was Rochester, Minnesota-based Mayo Clinic:

“We think the principles and concepts are very good and very important and we’ve worked long and hard to provide accountable care,” said Patricia Simmons, the Medical Director of Government Relations at the Minnesota-based Mayo Clinic. “Are we interested? Absolutely. But is it feasible? There’d have to be substantial revisions for us to participate.”

Washington Health Policy Week in Review next published comments from the Cleveland Clinic, located in Cleveland, Ohio:

Oliver “Pudge” Henkle, the Chief Government Relations Officer at the Cleveland Clinic, said, “The assumption has been that Cleveland Clinics of the world are ideally suited for this. We are very supportive of the idea. It’s clearly the right way to go and the journey is a good one. But it’s a matter of recommending ways in which we think CMS can make the ACO model and its structure better.” Henkle said the clinic will soon send CMS officials a comment letter outlining what he called “constructive recommendations.” The current proposal contains a long list of barriers that clinic officials believe need to be reconsidered.

Washington Health Policy Week in Review also reported the comments made by one executive at Geisinger Health, which is based in Danville, Pennsylvania:

A similar theme was struck by Thomas Graf, Chairman of the Community Practice Service of Geisinger Health System in Pennsylvania. Geisinger is already participating in a different demonstration program and would only be eligible to join the ACO program after that concludes. But Graf said it’s unclear whether Geisinger officials would want to take part in the ACO program at that point.

“The concept of the ACO program is certainly sound: the idea of improving quality while reducing cost,” said Graf. “It’s the regulations themselves that many organizations have a large number of concerns with. A lot of the detail-level work is problematic. It seems to be very prescriptive and restrictive with a fair amount of administrative and regulatory oversight.”

There were similar comments from Intermountain Healthcare, located in Salt Lake City, Utah. Washington Health Policy Week in Review wrote:

“We’re way past [the ACO concept],” said Brent James, the Executive Director for Intermountain Healthcare’s Institute for Healthcare Delivery Research. “I look at the ACOs coming out as almost fluff and distraction on the side, not that it’s not good but it’s just that the mainstream is already moving out there on the front line [to other ideas].”

It is significant when the leaders from these four respected healthcare delivery systems state their unwillingness to participate in ACOs, assuming that the current language of the federal ACO rules stands. As recently reported by Dark Daily, many of nation’s most influential medical associations were quick to criticize the ACOs rules. (See Dark Daily, “Medicare’s Final Rule for Accountable Care Organizations (ACO) Draws Fire from Healthcare Provider Groups,” May 31, 2011.)

AMA and AHA Identified Issues of Concern with ACO Rules

Both the American Medical Association (AMA) and the American Hospital Association (AHA) were among the first healthcare associations to issue statements critical of the ACO rules. Leaders from both groups have sent detailed letters to the Department of Health and Human Services (HHS) that identify problems with how the rules are written. These letters also include suggestions for how to address these issues and improve the ACO program—at least from the perspective of providers like hospitals and physicians.

Some of the specific problems that providers have with the federal ACO rules were identified in a letter that was sent to officials at the Center for Medicare and Medicaid Services (CMS) on May 26 by Delos Cosgrove, M.D., CEO of the Cleveland Clinic.

On behalf of the Cleveland Clinic, CEO Delos Cosgrove, M.D., sent a letter to the federal Centers for Medicare and Medicaid Services (CMS) with criticisms of the federal rules for Accountable Care Organizations. Delos’ letter also offered a number of suggestions for improving the rules. (Photo by

On behalf of the Cleveland Clinic, CEO Delos Cosgrove, M.D., sent a letter to the federal Centers for Medicare and Medicaid Services (CMS) with criticisms of the federal rules for Accountable Care Organizations. Delos’ letter also offered a number of suggestions for improving the rules. (Photo by

Delos noted that: “Rather than providing a broad framework that focuses on results as the key criteria of success, the Proposed Rule is replete with 1) prescriptive requirements that have little to do with outcomes; and, 2) many detailed governance and reporting requirements that create significant administrative burdens.” He also wrote “The combination of these factors creates significant barriers to potential applicants and, in our opinion, will discourage their engagement with this innovative concept.”

Pathologists and Clinical Lab Managers Can Learn More about ACOs

Even as these criticisms of the federal ACO rules pile up, there is no visible reduction in efforts by hospitals, health systems, physicians, and private payers to organize accountable care organizations. The ACO trend continues to be a significant trend, particularly as many hospitals continue to purchase private medical groups as a way to bring more physicians into their nascent accountable care organization.

To help pathologists and clinical laboratory managers understand more about ACOs, Medical Homes, and other models of integrated care, The Dark Report is conducting a special audio conference titled “ACOs and Medical Homes: Preparing Your Lab for Dramatic Changes in How Physicians Use Clinical Laboratories.” It will take place on Thursday, June 23.

You’ll hear from two experts who are involved in supporting hospitals and health systems with their efforts to develop ACOs and Medical Homes. One speaker is Brian R. Jackson, M.D., MS, who is the Medical Director of Medical Informatics at ARUP Laboratories. Joining him is James M. Crawford, M.D., Ph.D. who is Professor and Chair at the Department of Pathology and Laboratory Medicine in the Hofstra North Shore-LIJ School of Medicine, and Senior Vice President for Laboratory Services, North Shore-LIJ Health System in Manhasset, New York.

It is widely expected that physicians practicing in ACOs and Medical Homes will be motivated to change how they order clinical laboratory tests and how they use the laboratory test results. This is one important reason why medical laboratory executives and pathologists should be tracking the evolution of ACOs and Medical Homes. This is one topic that will be covered during the upcoming audio conference on June 23. You can use this link to register, or for more information.


DATE: Thursday, June 23, 2011

TIME: 1 p.m. EDT; 12 p.m. CDT; 11 a.m. MDT; 10 a.m. PDT

PLACE: Your telephone or speakerphone

COST: $245 per dial-in site (unlimited attendance per site)

TO REGISTER NOW: Click here or call 1-800-560-6363 toll-free

Related Information:

Mayo, Geisinger, Cleveland Clinic May Not Participate in ACOs

Model ACO Health Centers Skeptical of Proposed Rule

No Medicare ACOs for Mayo Clinic

Mayo opposes key health reform provision

Medicare’s Final Rule for Accountable Care Organizations (ACO) Draws Fire from Healthcare Provider Groups

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