Obama Administration "Defensive" of Proposed ACO Regulation

Modern Healthcare reports that officials at the Centers for Medicare and Medicaid Services (CMS) are on the defensive after their proposed regulation on Accountable Care Organizations (ACOs) has received high levels of criticism from even those in favor of ACOs in theory.

Among the negative feedback so far about the proposed ACO rules: That they will lead to hospitals “dominating” practices, that they will contribute to overwhelming providers with requirements to collect yet another set of quality measures, and that they will burden providers with “bureaucratic” constraints.

Yesterday, in our brief introduction to ACOs, we gave two examples of health care experts who have serious concerns about the proposed ACO regulation. Here's another example from Michael Stephens who writes the following:

Some of my colleagues have asked me whether accountable care organizations (ACOs) have a realistic chance of meeting expectations as proposed in the recently-announced regulations from CMS. My answer is that they do not. In attempting to craft a politically acceptable program, CMS has failed to address key issues on the one hand, or over-regulated by providing prescriptive parameters for ACO operations that do not allow for local innovation on the other.

We'll address whether ACOs are a good idea at a later date. But in its proposed form, even the proponents of ACOs are saying that the Obama Administration's approach is too bureacratic to succeed.

The clamour is so loud that now CMS officials are admitting that changes will be made to the final regulation in response to the criticism.