Cleveland Clinic CEO: Proposed ACO rules create ‘significant barriers’

Dr. Delos “Toby” Cosgrove

Cleveland Clinic‘s chief executive blasted proposed federal rules for accountable care organizations, saying they create “significant barriers” that would discourage hospitals from adopting the new model of care.

Clinic CEO Toby Cosgrove made the comments in an eight-page letter addressed to Donald Berwick, top administrator for the the Centers for Medicare and Medicaid Services (CMS), though Cosgrove stressed that the Clinic supports the concept of accountable care organizations (ACOs).

Cosgrove said the Clinic was “generally disappointed” with the details of the proposed 429-page regulations that describe how ACOs would be set up and function. The letter was posted by Modern Healthcare.


“Rather than providing a broad framework that focuses on results as the key criteria for success, the proposed rule is replete with 1) prescriptive requirements that have little to do with outcomes, and 2) many detailed governance and reporting requirements that create significant administrative burdens,” the letter states.

ACOs are a new type of healthcare model designed to reduce costs and improve care coordination for Medicare patients, and were a key part of last year’s controversial federal health reform package. In the most basic terms, an ACO is a network of doctors and (one or potentially more) hospitals that manage the care of a population of Medicare patients.

To be considered an ACO, an organization would agree to manage all of the health needs of a minimum of 5,000 Medicare beneficiaries for at least three years, according to proposed federal guidelines. The concept of ACOs is appealing to hospitals because ACOs that save Medicare money will be eligible to share in some of that savings themselves.

CMS is accepting public comments on its proposed ACO rules and is expected to issue a final rule later this year. Like the Clinic, a number of leading hospitals across the country have criticized the rules as being too onerous and providing too little potential financial gain.

In their current form, the rules create “significant barriers to potential applicants, and, in our opinion, will discourage [hospitals’] engagement with this innovative concept,” according to Cosgrove’s letter.

The Clinic offered several recommendations for changing the proposed rules’ provisions on governance, shared savings and quality measures.

By publicly releasing the letter, the Clinic — a world-renowned health system that’s been lauded by President Obama — is likely looking to turn up the heat on CMS and pressure the agency into ceding to some of the ACO changes it’s recommending.

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