Faced with a cost control problem, federal regulators are once again pushing back an Affordable Care Act deadline. One of the few measures the law included to help bring down costs was provisions to establish entities called Accountable Care Organizations (ACOs). ACOs are partnerships between hospitals and health care providers that treat Medicare patients. The program governing them establishes a benchmark of spending on health care. If the providers seek reimbursements at a level lower than the benchmark, they get to spilt whatever they save with the government. If they spend over the benchmark, though, they have to pay Medicare.A nice idea, but one which hasn’t been very successful in practice, as only 11 out of the 32 in one pilot ACO program saw any savings and 13 left the program (there is also a wider data set for more ACOs not in that pilot program). Now in what seems like an effort to stop further hemorrhaging, regulators are considering putting off the enforcement of penalties against ACOs for three more years. The current rules already gave ACOs three years in which they could get bonuses for savings but avoid penalties for overspending, and the proposed change would double that grace period. Kaiser Health News:
Sean Cavanaugh, Medicare’s director, said the change was one of many prompted by concerns raised by ACOs. “The notion that 36 months later you’re going to be at downside financial risk is pretty intimidating,” he said in an interview.However, the extra time would come at a price: ACOs that after their first three years decide to avoid penalties for the next three could keep no more than 40 percent of the money they save Medicare, rather than the 50 percent maximum they can keep during their first three years.
This has become a theme with the ACA: in its implementation we have seen a large number of provisions get delayed amidst doubts and worries about the impact of some part of the law, either on the Democratic party’s political future or on Americans interacting with the law. Because of that strategy we still don’t have a clear idea of what the full consequences of the law will be.