Credentialing for ACOs: What the proposed CMS regulations mean for medical staffs in the future

The age of accountable care organizations (ACOs) has arrived. On March 31, the Centers for Medicare & Medicaid Services (CMS) released the long awaited proposed regulations that provide guidance for implementing the portion of the Patient Protection and Affordable Care Act (better known as healthcare reform) that establishes ACOs. ACOs are one of the strategies CMS has undertaken in pursuit of a program referred to as value-based purchasing. This initiative, which predates the healthcare reform debate of 2009–2010, reflects a self-conscious change in the CMS focus from serving as a passive payer of claims to an active purchaser of services on behalf of Medicare beneficiaries. Beginning in 2007, the Institute for Healthcare Improvement (IHI) gave voice to the goals embraced by the value-based purchasing program through what is known as the IHI Triple Aim: improving care for individuals, improving the health of populations, and reducing the rate of growth for healthcare expenditures.  

The healthcare reform bill requires CMS to implement ACOs by January 1, 2012. After a 60-day comment period, CMS will issue the final regulations, which will take effect on that date. We are already seeing challenges to the law in the courts and in Congress, but it is unlikely any of these will alter this implementation date. The healthcare industry is preparing for the onset of convulsive activity as hospitals, physician groups, health systems, and others rush to implement ACOs.

In a prior edition of Medical Staff Leader Connection, I discussed some of the credentialing challenges likely to arise as organizations design and implement ACOs. While this article was written before the recent proposed regulations became available, we can now confirm that the questions we tackled back then are the same questions that credentialing specialists in ACOs must tackle in the future. So it’s time to get to work on answering those questions:

1. Will all physicians on your hospital’s medical staff initially be eligible to participate in the ACO? Why or why not?
2. Once physicians join the ACO, will there be performance criteria regarding quality and cost effectiveness to maintain this eligibility?
3. If criteria for initial or ongoing eligibility for ACO participation are established, who determines these criteria?
4. How will you ensure the quality and cost effectiveness data used to determine eligibility is valid and accurate given the challenges our field already has with collecting accurate peer review data?
5. Who will do all the work of credentialing, gathering the data, reporting it, and dealing with the inevitable pushback physicians will give to the data?

The proposed ACO regulations contain a surprising element that ups the ante on getting the answer to these questions right. ACOs will not only have an opportunity to earn a portion of savings for the care provided to Medicare beneficiaries, but they will also be responsible for “paying back” a portion of any expense overages. Physicians and hospitals will continue to be paid fee-for-service through the Medicare fee schedule. However, after the end of the year, if total costs for all Medicare beneficiaries assigned to the ACO exceed the target amount, physicians and the hospital will be required to pay some of that overage back. ACOs will likely operationalize payback with some type of withhold arrangement rather than demanding that providers write a check to pay back some of the compensation they already received.

ACOs will have an key effect on the medical staff: a decision to let all physicians on a medical staff join the ACO at the outset, regardless of their cost effectiveness, puts all the other providers in the ACO at risk for having to pay back some of what they would have received on straight fee-for-service Medicare fee schedule. The same applies to keeping a high-cost provider in the ACO once data on their cost effectiveness is known. At the very least, this situation will create greater conflict and controversy as ACOs develop their approaches to credentialing members of the ACO. And where there is conflict, there will be unhappy physicians, which means lawsuits are likely to follow. So getting this right in the beginning should be a goal for all hospitals and physicians embarking on the ACO journey. This will require much thoughtful dialogue and effective leadership. It is now clear that the ACO journey will not be for the feint of heart.

Richard A. Sheff, MD, CMSL, is chair and executive director of The Greeley Company, a division of HCPro, Inc., in Danvers, MA.