Revisions to Medicare ACO Proposed Rule Needed to Protect Physician Training, Say AAFP, Academic Groups

June 28, 2011 03:10 pm Barbara Bein

Noting their long-standing support for reforming graduate medical education, or GME, funding under Medicare, the AAFP and four academic family medicine organizations say that unless CMS' proposed Medicare accountable care organization, or ACO, model is modified, it could harm the training of family doctors and other primary care physicians and further exacerbate physician workforce shortages in the United States.

In a letter to CMS Administrator Donald Berwick, M.D(4 page PDF)., the Academy and the Council of Academic Family Medicine, or CAFM, suggest several ways that the proposed Medicare ACO program could be changed to provide a more favorable educational environment to family medicine and primary care.

"Our belief is that the method of educational support within Medicare must change in order to increase the needed family medicine workforce. We're very hopeful that CMS will take into consideration our recommendations concerning educational support embedded within Medicare, largely represented by significant GME funding to teaching hospitals, in the formation of the ACO," AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, told AAFP News Now.

The CAFM is composed of the Society of Teachers of Family Medicine, the Association of Departments of Family Medicine, the Association of Family Medicine Residency Directors and the North American Primary Care Research Group.

The June 6 letter, which focuses on education issues, was submitted during the comment period for the CMS proposed rule(, "Medicare Shared Savings Program: Accountable Care Organizations." It follows a May 20 letter from the Academy to CMS regarding the overall proposed rule.

According to the June 6 letter, the groups support "the intent of the proposed ACO program to promote affordable, evidence-based, high-quality care delivered by interprofessional teams that rely on a foundation of primary care."

However, according to the letter, provisions that include GME payments to teaching hospitals in the ACO benchmark and performance expenditure calculations will have negative effects. GME funding is tied to Medicare hospital payments, so Medicare admissions to teaching hospitals incur higher Medicare payments than those to nonteaching hospitals. Thus, to increase their shared savings allocation, ACOs will be encouraged to recommend that patients receive care in nonteaching hospitals. As a result, patients will have fewer care options, and physician trainees will not receive as much exposure to innovations in the health care system that improve outcomes and reduce costs.

In addition, because one of the goals of the Medicare ACO program is to reduce inpatient bed days, indirect medical education payments also will be reduced. To avoid these "untoward effects," the groups ask that the GME payments to teaching hospitals be excluded from the calculations.

In an interview with AAFP News Now, Robert Bennett, federal regulatory manager in the AAFP Division of Government Relations, explained. "The overall goal of the Medicare ACO program is for hospitals and physicians to work together collaboratively, share information and prevent patients from being hospitalized and having complications," he said.

"But Medicare payment for GME education goes through the hospitals. A reduction in Medicare payments to hospitals could negatively impact physician training programs," said Bennett.

According to the letter, excluding both direct and indirect GME funding for primary care physician training from the baseline in Medicare ACO savings calculations will dissuade ACOs from reducing spots in primary care training to maximize their savings.

The groups also recommend that the Medicare ACO program provide financial incentives for developing primary care training in new models of care, such as patient-centered medical homes, federally qualified health centers and other ambulatory settings. Specifically, they say that CMS, through the Medicare ACO program, should take the lead in providing payment incentives for developing these new models of care. These models of care can only develop appropriately if medical students and residents are trained in these settings, and that goal, in turn, can only be met when financial incentives are provided to initiate curriculum and faculty development programs.

The groups recommend that CMS launch a pilot project to provide financial incentives that would

  • support primary care training in all sites where care is delivered;
  • provide structured GME payments for primary care residencies to directly fund the entity where education is the primary mission;
  • increase payments for primary care training to support added costs of training in community-based settings, as well as to encourage medical students who chose a primary care career; and
  • provide incentives for training in rural and underserved areas.

"We recognize that funding for innovative educational programs is not currently part of the ACO model, but we believe that CMS should consider financial incentives for the development of innovative educational systems in all its new programs," the groups say in the letter.

"We believe it important that all funding mechanisms in accountable care settings recognize the importance of education, both for the training of an appropriately equipped physician workforce and for the future success of the model," they say, calling for payment incentives to promote more balance than the present model in which all CMS payment for medical education is allocated to hospitals.

The groups said that blended payment systems -- for example, those that combine fee-for-service with care coordination -- "are essential to the most effective health system reform, and therefore must be supported in the ACO structure."