WASHINGTON – CMS issued the final rules for accountable care organizations (ACO) on Thursday and, in so doing, sparked excitement throughout healthcare with what initially appears to be a more achievable set of qualifying parameters. But it will take some time for the healthcare industry to absorb and understand the changes.

George Roman, senior director of health policy at American Medical Group Association (AMGA), spoke with Government Health IT Editor Tom Sullivan Thursday afternoon, following the CMS conference call announcing the new rules.

Stipulating that he'd read just the first 60 pages of the 696-page document, and clear that his answers are based on that, Roman shared his first impressions of the final ACO rules.

Q: What was the biggest surprise in the final rules?

A: The biggest surprise at first blush is the fact that CMS seems to have listened more than it typically does to the commenters and it appears to have made changes of some consequence. That’s a pleasant surprise. Now, I cannot say that applies to everything because I have not read everything yet, but on several matters there are clear improvements. Whether that’s enough to make the program attractive remains to be seen. The devil is in the details.

I can give you some examples. In the proposed framework there was a two-sided model that involved shared savings and shared losses. We and many others commented that this was a methodology that didn’t render the ACO model as very attractive. Why should people engage in risk if they can be guaranteed Medicare payment if they don’t participate? This is still fee-for-service, after all. CMS heeded that and has offered one of the participation tracks to be one-sided where there is just shared savings risk and no downside.

[Reporter's notebook: Biggest surprises within the final ACO regs.]

Another thing I read that I liked was the reduction of the required quality measures from 65 to 33. We commented that 65 is way too much – it’s onerous, it’s burdensome, doesn’t necessarily advance anything and it may not be possible to attain. So it’s a serious disincentive. Now, I don’t know what the new measures are yet, but having said that the fact they reduced the number and the burden is a very favorable sign.

Q: During the comments period, a lot of health experts said there was a chasm between the regs and reality. Has CMS successfully addressed that with the final rules?

A: I hate to be trite, but let me characterize the final rule as a mosaic, and each component is a tile of that mosaic. The full assessment and value of participation is going to have to be taken into account by individual entities evaluating them within their own context. So, even though some of the various tiles have changed for the better, the full picture is what counts. In addition to that, there are various external documents which will play a very significant role in whether or not, methodology aside, this will be attractive. Those come from HHS OIG, IRS, FTC, DOJ, etc. And I believe the documents were almost concomitantly released with this rule.

The rule itself as a methodological document is critical but without some greater assurance that they’re not going to put the handcuffs on me as an executive of a large entity seeking to form such an ACO, that would dampen my interest considerably. The assurances offered in the preliminary documents were not enough.

Q: AMGA this summer cited a member survey that found 93 percent of respondents "indicated that they would not participate in the ACO program unless the requirements in the final rule reflect major modifications to the proposals.” What would you put that percentage at now that the final rules are out?

A: I wouldn’t venture into that realm now – not because I wouldn’t want to give you an assessment, but because I am not able to, and I’ll you why. Go back to my rather trite but reasonably illustrative mosaic example. It depends what all the pieces are together and how they’re viewed by individual participants. And it has to be viewed in the context of these other documents I mentioned a moment ago. So I don’t know, but based on a preliminary reading, if the improvements and changes and changes as reflected in the limited thing I’ve talked about are carried forward through the entire rule and the attendant anti-trust anti-kick back documents then it certainly will produce something more attractive, but the devil remains in the details. I haven’t read the whole document yet; I’d be foolish to opine beyond what I’ve said.