ACO Insider: Avoid the ‘default future’



As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”

This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.

But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.

This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.

Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.

A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.

As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”

You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.

It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”

But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.

Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.

The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.

Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.

In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”

Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at or 919-821-6612.

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