August 2011 ACO Special Edition

Industry Comments Show Some Consensus in Provider Opposition to Key Components of CMS’s Proposal for the Medicare Shared Savings Program

By R. Brent Rawlings, McGuireWoods LLP, Richmond, VA1
and Scott P. Downing, McGuireWoods LLP, Chicago, IL 2

AuthorAuthorA number of influential trade associations representing key stakeholders in the debate over accountable care have submitted comments to The Centers for Medicare & Medicaid Services (CMS) in response to its April 7, 2011, notice of proposed rulemaking regarding implementation of the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs). This article provides a review and comparison of the letters submitted by three such associations representing healthcare providers: the Medical Group Management Association (MGMA),3 the American Hospital Association (AHA),4 and the American Medical Association (AMA),5 in an effort to gauge industry reaction to some of the more significant features of CMS’s proposed rule.

MGMA, AHA, and AMA each support the MSSP and development of ACOs in concept, but all express significant concerns with various aspects of the program as it is proposed by CMS. Based on a review of the comments, there appears to be some consensus among providers on how CMS should redress its initial proposal with respect to some of the more significant features of CMS’s proposed rule.

Beneficiary Assignment or “Attribution” Models

CMS proposed a retrospective attribution model for assigning beneficiaries to an ACO for purposes of calculating shared savings, in part, seeking to encourage a uniform standard of treatment and accountability to all patients, not just those assigned to the ACO. MGMA, AHA, and AMA all urged CMS to eliminate retrospective attribution in favor of assigning patients on a prospective basis. While the explanation of why prospective assignment is necessary varied across the associations, the gist of the position is that it is not possible to act in an accountable fashion without the ability to identify beneficiaries within the ACO in advance and proactively manage the care that they receive. The associations provided these additional recommendations to CMS:

  • MGMA recommended fixing the assigned population upfront for the full agreement period, giving ACOs the option to exclude beneficiaries where claims data suggests that they receive a significant percentage of their care outside the geographic area of the ACO (i.e., snowbirds).6
  • AHA urged CMS to assign beneficiaries to ACOs on a prospective basis, with a retrospective reconciliation on an annual basis, similar to the approach included in the Pioneer ACO model proposed by CMS.7
  • AMA recommended that CMS take the additional measure of creating a payment option that allows beneficiaries to voluntarily elect participation in an ACO and making ACO payments based only on the beneficiaries who make that election.8

Shared Savings Percentage

CMS proposed that Track 1 ACOs should have a maximum shared savings rate of 50 percent and Track 2 ACOs should have a maximum shared savings rate of 60 percent. CMS also proposed that ACOs would only share in the amount of savings above the minimum savings rate (MSR). MGMA, AHA, and AMA urged CMS to increase the percentage of shared savings and allow shared savings on a gross or “first dollar” basis once the MSR is exceeded, thereby rewarding ACOs with a greater amount of the savings achieved and a greater return on their investment.9

Shared Losses

CMS proposed a two-track model for shared savings and shared losses. Under Track 1, one-sided model, the ACO would only share in savings for the first two years of the agreement, then would be required to share in savings and losses for year three. Under Track 2, two-sided model, the ACO would share in savings and losses for all three years of the agreement.

AHA and AMA urged CMS to include a model for shared savings only, without mandatory shared losses and MGMA urged CMS to eliminate loss sharing from the MSSP altogether. The associations recommended these alternatives if shared losses are included:

  • MGMA proposed allowing CMS to terminate the agreement after the second year if the ACO is not generating adequate savings.10
  • AHA proposed extending the term of the agreement to five or six years, with the adoption of loss sharing in the fifth or sixth year after the ACO has had more experience.11
  • AMA proposed, at a minimum, that CMS could provide a shared savings option, without downside risk, for certain smaller ACOs. In addition, AMA recommended that, if shared losses are included, CMS should authorize payment for services that are not currently paid for by CMS, including telephone calls and non-face-to-face services, to support better and more efficient care for patients.12

Primary Care Physicians

CMS proposed to assign or attribute beneficiaries based upon receiving a plurality of their primary care services from primary care physicians within the ACO and defined primary care physicians as physicians specializing in family practice, internal medicine, geriatrics, and general practice. Both AHA and AMA recommended expanding the definition of primary care:

  • AHA urged CMS to expand the definition of primary care to include nurse practitioners and physician assistants, especially for small or rural providers that rely heavily on these professionals to provide primary care. AHA also recommended that the definition of primary care be expanded to include the specialties of nephrology, oncology, rheumatology, endocrinology, pulmonology, neurology, and cardiology where these specialists provide a significant portion of primary care services to the beneficiary.13
  • AMA similarly recommended that plurality of care determination should be expanded to include primary care services delivered by any physician, not just certain primary care physicians as defined by CMS. AMA also urged CMS to allow providers of primary care services to participate in more than on ACO.14

MGMA did not specifically recommend expanding the definition of primary care, but did suggest that ACOs should have the option of excluding those patients that are expected to receive a high percentage of their care from non-primary care physicians, concluding that opportunities for savings with such beneficiaries is limited unless the specialists are also participants in the ACO.15

Quality Measures

CMS proposed to collect information on, and measure performance for, 65 different quality measures within five domains. MGMA, AHA, and AMA urged CMS to reduce the number of quality measures initially and expand them only as the program progresses. AMA and MGMA also recommended that quality measures should be aligned with other Medicare initiatives (e.g., EHR Incentive Program and Physicians Quality Reporting System).16

Meaningful Use Requirement

CMS proposed that 50 percent of ACO primary care physicians must be “meaningful users” of a certified electronic health record by the second year of the agreement. MGMA, AHA, and AMA expressed strong opposition to this requirement requesting elimination of a percentage-based meaningful use requirement established by CMS to allow greater flexibility.17


While there are many differences across these and other trade associations in their views about how best to design the MSSP, the similarities across these significant provisions of the proposed rule demonstrate what may be a resounding response to CMS on changes that healthcare providers view as necessary for successful development of ACOs under the Medicare program.


R. Brent Rawlings is an attorney with McGuireWoods LLP in Richmond, Virginia and is Co-Chair of the firm’s ACO Task Force along with co-author of this article Scott P. Downing. Mr. Rawlings’ practice includes representation of hospitals and health systems, academic medical centers, physician groups, managed care plans, and other healthcare providers in a variety of matters including state and federal regulatory compliance; managed care contracting and operations; development of provider networks (IPAs, PHOs) and antitrust; Medicare, Medicaid and private payor regulation and fraud and abuse compliance; healthcare contracts; joint ventures; and merger, acquisition, and affiliation of healthcare providers. He may be contacted at or 804.775.1126.


Scott P. Downing is a partner with McGuireWoods LLP in Chicago, Illinois and is Co-Chair of the firm’s ACO Task Force along with co-author of this article R. Brent Rawlings. Mr. Downing focuses his practice on structuring issues for healthcare companies, including joint ventures among various providers and with non-provider third parties. He has also participated in numerous transactions involving the purchase or sale of healthcare facilities representing both buyers and sellers of such companies. He has extensive experience assisting ancillary service providers with all of their healthcare regulatory and corporate needs, including ambulatory surgery centers, dialysis facilities and specialty hospitals, as well as counseling large physician practices on the appropriate way to structure the provision of ancillary services by such practices.


Letter from William F. Jessee, M.D., FACMPE, President and Chief Executive Officer, Medical Group Management Association, to Donald M. Berwick, M.D., Administrator, Centers for Medicare and Medicaid Services (June 1, 2011) (“MGMA Letter”). The letter is available online at


Letter from Rick Pollack, Executive Vice President, American Hospital Association, to Donald M. Berwick, M.D., Administrator, Centers for Medicare & Medicaid Services (June 1, 2011) (“AHA Letter”). The letter is available online at



Letter from Michael D. Maves, M.D., M.B.A., Executive Vice President, CEO, American Medical Association, to Donald M. Berwick, M.D., Administrator, Centers for Medicare and Medicaid Services (June 6, 2011) (“AMA Letter”). The letter is available online at



MGMA Letter, pps. 4-5.

7 AHA Letter, p. 14. The Pioneer ACO Model is separate from the Medicare Shared Savings Program and is designed to offer a “fast-track” approach for ACOs that have extensive experience with systematic care improvement efforts, and either already have entered or are prepared to enter payment arrangements with other payers that include financial accountability and performance incentives. More information about the Pioneer ACO Model is available online at

AMA Letter, pps. 10-12.


See MGMA Letter, p. 6., AHA Letter, p. 9, and AMA Letter, p. 5.


MGMA Letter, p. 6.



AHA Letter, p. 8.


AMA Letter pps. 2-4.


AHA Letter pps. 12, 15.


AMA Letter p. 14.


MGMA Letter p. 4.


See MGMA Letter, p. 7 and AMA Letter, pps. 15-19. CMS EHR Incentive Programs provide incentive payments for adopting, implementing, upgrading or demonstrating meaningful use of certified electronic health record technology. More information is available online at CMS Physician Quality Reporting System is a physician quality reporting system that includes incentive payments for eligible professionals who satisfactorily report data on quality measures for covered professional services furnished to Medicare beneficiaries. More information is available online at


See, MGMA Letter, p. 8. AHA Letter, p. 17. AMA Letter pps. 23-24.

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