ACOs prospering but high start-up costs, regulations holding them down, expert says

Share this content:

Waiving the current three-day inpatient hospital stay required for beneficiaries in Accountable Care Organizations to qualify for Medicare skilled nursing coverage could help reduce regulatory burdens for the organizations, according to a new published report. 

Bloomberg BNA's Wednesday report on the organizations found that the number of ACOs is growing — 480 in the Medicare Shared Savings Program as of 2017, compared to 220 in 2013. The report also cited a May Health Affairs study that showed ACOs participants had a $14, or 2%, reduction in Medicare spending per beneficiary each month.

Despite those positive figures, many ACOs are still facing hurdles like regulations and high startup costs, experts shared with Bloomberg.

“Coming up with these funds is difficult for a lot of organizations, especially rural ACOs and smaller ones,” Allison Brennan, vice president of policy at the National Association of ACOs, told Bloomberg. “Funding for things like health IT, data analytics, and care coordinators are the biggest and costliest obstacles.”

She added that the Centers for Medicare & Medicaid Services could improve ACOs by limiting their regulatory burdens and boosting transparency around program methodologies.

“Medicare typically requires that beneficiaries have a prior inpatient hospital stay of no fewer than three consecutive days in order to be eligible for Medicare coverage of inpatient skilled nursing facility care,” Brennan said. “This requirement should be waived for ACOs to allow beneficiaries to receive skilled nursing facility services without first having the 3-day inpatient hospital stay.”

A bill introduced in 2016 aimed to do just that, allowing ACOs a waiver of the three-day stay rule. Provider groups praised the bill for its potential to improve the MSSP program. Brennan said the bill likely will be re-introduced in the House this summer.