More ACO BS by Pat Conrad MD


The newest exciting chapter in the ACO saga is a proposed “Next Generation ACO” developed by the CMS Innovation Center (CMMI). Of course Marvel Studios couldn’t make ACO’s interesting, and the CMMI has got to win most oxymoronically titled institution of the decade.

In the lead paragraph, the authors state, ” Providers will have complete autonomy in how they manage the health of their population” and then, ” The payer will pre-define the ACO’s population and its spending benchmark.” Satisfactorily explain that juxtaposition to me, and I’ll name you the new head of the CMMI.

This article states that the flaws of the original ACO’s were:

  • They only shared in 50% of the profit, and amount waaayyyy to low to fund new structures and physician incentives (think an administrator actually said that?)
  • Physicians didn’t know until year’s end which patients they were financially responsible for, making it tough to effectively target the rationing, uh, “care management interventions.”
  • Patients had no financial incentive to remain in ACO networks.

The authors (one of whom worked in the White House, the other two work for a company selling this crap) fawningly describe the Next Gen ACO structure as “progressive”, and built upon feedback from the old Medicare Shared Savings Program (MSSP). This sentence, “Next Gen ACOs should have access to the full toolkit of benefit- and network-design strategies found in Medicare Advantage and other provider-led offerings” is so unbelievable as to be vomit inducing. What “toolkit”? What design “strategies”? ACO’s – meaning CMS, meaning the government – are still going to designate what the savings will be, what the expenditure and quality benchmarks will be, and will still dampen any potential savings to the doc (less the administrator’s cut, of course) with gobs of gooey, toxic Medicare regulations. And in the Next Gen risk adjustment, financial targets may be adjusted by up to 3% if the population’s risk status increases. What if the financial exposure increases 5%, or 10%, who eats the difference? And if the population’s risk status decreases, will the bonuses increase? Does anyone smell a conflict of interest there?

Why do ACO’s even exist? To save money! Why is that a goal? Because Medicare LOSES MONEY. It always has, and it always will.

CMS wants the pressure on, and is giving would-be ACO participants till Jan 1 to sign up. The cheerleading authors sum up with, “The Next Generation ACO Model may come to be seen as the cornerstone of CMS’s efforts to shift the majority of its payments towards value-based care. For health systems it represents an opportunity to secure provider-friendly deal terms and help define their own destiny in a rapidly-evolving Medicare payment landscape.” Until they lose more money, and change the rules again, which is the only certainty in this big lie.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected]

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5 Responses

  1. Sir Lance-a-lot says:

    “… the CMMI has got to win most oxymoronically titled institution of the decade.”

    I dunno. I think “Internal Revenue Service Center” gives it a run for it money…

  2. Seneca says:

    Medicare remains a looming financial disaster, as presciently predicted by some at its inception in 1965. If CMS is genuinely interested in saving money NOW why do they not consider the following:

    1. Why is CMS paying facility fees to offices which are owned by hospital systems, but provide no more services than the competing private practices?

    2. Has there been any effort on the part of CMS to reduce or cap administrative fees which, by a report in the hospital administrator’s own journal (Becker’s Hospital review), is estimated to be fully 25% of inpatient costs? Let that sink in. A $2500 hospital day–outrageous to begin with– includes some $600 in administrative fees. Talk about low hanging fruit!

    3. Does anyone consider obliging the beneficiaries to have some interest in cost efficient care? 80/20 cost sharing arrangements were once common but now are almost unheard of.

  3. Perry says:

    But, it was so great before how could they possibly improve on it? Blechhhh.

  4. Steve O' says:

    That law of Reality, sadly, is that reality does not care about superstitious gibberish. The Lords of Medicine are trying out all manner of incantation and spells to bend reality to their wishes, as two-year-olds are wont to do. In the second part, they fall into heroic sulks and fits because Reality does not bend to their wishes, and sometimes bite Mother or Dad out of frustration.
    Two-year-olds will outgrow their misperceptions; bureaucrats will not. Both groups construct unbelievable phantasies, and blame what is un-doable on the lack of vision and effort from the ones tasked to carry out their will. Coupled with a population that is frustrated and ready to punish the identified Enemy, it is dangerous.

  5. Thomas Guastavino says:

    ACOs and bundled payments, i.e., throw meat into the cage and watch the dogs fight over it, then take credit for the show.

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