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Tangle of Medicare Rules Becoming Problematic for Subspecialists

Internal medicine subspecialists are expressing concern that their practices may be harmed by Medicare rules that govern how Accountable Care Organizations are structured and paid, according to representatives of the American College of Physicians.

Neil Kirschner, senior associate for health policy and regulatory affairs in ACP's Washington office, said that some internal medicine subspecialists and other specialty groups believe that ACOs are actively routing away patients who normally would be referred to them.

"If they aren't a formal participant in an ACO, patients who typically would have come to them are being channeled to the participants in the ACO and not to them," Kirschner said.

In addition, subspecialists are concerned that Medicare billing rules will either require their exclusive participation in one ACO, limiting their potential pool of patients, or force them to accept an affiliate status with ACOs that may result in limited opportunity for input on the ACO's procedures as well as reduced payments.

Though traditional Medicare rules state that patients can go to any subspecialist of their choice, "we are hearing that some of the ACOs are not making clear that these patients have freedom of choice for where they want to go," Kirschner said.

The problem revolves around the Medicare Shared Savings Program, which provides financial rewards for Accountable Care Organizations that control health care costs while maintaining or improving the quality of the care they provide.

ACOs are defined under the program as a group of providers who assume accountability for the health care delivered to a specific population of patients. "Their payment is significantly influenced by the quality and efficiency of care provided," Kirschner said.

To figure out who should be rewarded for which services, Medicare requires that patients be "attributed" to a specific ACO if they receive most of their primary medical care from participants in that ACO, he said. However, the rules also require that a practice involved in providing primary care that leads to a patient's attribution to an ACO must become an exclusive participant in that ACO.

"If a practice has the potential to be used for attribution, it is covered by the exclusivity rule," Kirschner said. "It's the only way, based on their current methodology, they can make sure the providers responsible for the care are being held accountable and are provided the rewards for the services they provide."

The wrinkle came when the Centers for Medicare and Medicaid Services realized that some patients receive most of their primary care through a subspecialty practice.

"Initially it was only going to be primary care doctors who determined patient attribution, if they provided the plurality of care and they belonged to that ACO," Kirschner said. "But it was finalized so that any internal medicine subspecialty or other specialty that uses one of these primary care service codes, and a lot of non-primary care practices do, would be covered by the exclusivity rules."

"In essence, it covers most subspecialty practices," he said. "If a patient cannot be attributed based on a primary care physician, CMS can see if a subspecialty practice is providing the plurality of care. If any specialty practice has the potential to be included in the attribution process, even if they're not, then they have to be exclusive."

Subspecialists can get around the exclusivity requirement by contracting with multiple ACOs as an affiliate provider.

However, subspecialists are skeptical that they will be able to negotiate affiliate contracts that will provide them with adequate input into the ACO's procedures or a share of profits equal to that received by full-fledged ACO participants.

"We're basically on the grace of God on how we'll be dealt with under these affiliate agreements," said Dr. John Cox, a Dallas oncologist who belongs to the Texas Oncology group subspecialty practice. "My experience is the affiliate contracts offered by the ACOs are very general. They aren't going to negotiate on specific items to determine how the savings will be split up."

In essence, Kirschner explained, such subspecialty practices are not true participants in the ACO but rather have an independent service contract with it. "The contract has to spell out what their rights and privileges are, but their ability to make demands can be limited," he said. "Will they be able to get a share of the shared savings? That has to be agreed upon in the contract. Will they have any say in the governance of the ACO? If it's a subspecialty practice where they have very little competition in the area, then they will have a lot of leverage and it won't be an issue. If there are a number of subspecialty practices in the area, then they will be left out."

The rules governing Affordable Care Organization payment and exclusivity have raised a number of problems for internal medicine subspecialists and other specialists who had not expected to be part of the ACO discussion.

For instance, ACOs may stress to their patients the virtues of the Accountable Care Organization, including the fact that they will get better coordination of care if they receive treatment from providers in the ACO. "It's part of the beast if an ACO is functioning well that they will get the patients treated at practices affiliated with the ACO, so they can coordinate care and save money," Cox said.

"But that's a real concern to subspecialists, particularly subspecialists that are in very competitive specialties within their market," he said. "There's going to be pressure on patients through this process of engagement. If the system is going to work, the ACOs are going to have to cajole patients."

Texas Oncology also has come up against another problem inherent in the exclusivity rule, Cox said. The rule assigns a specialty group to an ACO based on the group's taxpayer identification number used to bill Medicare for services provided to patients.

But Cox's group includes more than 400 physicians working in more than 60 different practice sites, all billing Medicare under a single tax ID number.

"The problem is that if I as a physician wanted to participate in one ACO and I sign an agreement, I bind all the physicians under our tax identification number to that ACO," Cox said. "Obviously, our organization doesn't want to do that, and the ACO doesn't want that because they would be held accountable for patients they don't treat."

CMS representatives declined to comment on the record. Rather, they referred physicians who want clarification on the matter to two Web postings: an FAQ on the Medicare Shared Savings Program and information on affiliate agreements.

Kirschner said that ACP wants to hear from members who are experiencing problems because of the exclusivity rules of the Medicare Shared Savings Program so the College can collect information and lobby for changes.

ACP would like CMS to:

  • Improve communication with subspecialists regarding the affiliate contract option
  • Make sure ACOs are not misinforming patients about their continued right to see whatever subspecialist they want to see
  • Change its methodology so subspecialty practices can opt out of exclusivity and patient attribution and participate in multiple ACOs

Physicians affected by the exclusivity rules can e-mail Kirschner with the details at

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July 17, 2013
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