Medicare 'shared savings' program may elude smaller dermatology practices

March 1, 2011

The federal government has not fully defined what the Medicare shared savings program mandated by healthcare reform legislation will look like, but sources say its advent likely will put dermatologists at a disadvantage.

National report - The federal government has not fully defined what the Medicare shared savings program mandated by healthcare reform legislation will look like, but sources say its advent likely will put dermatologists at a disadvantage.

The Patient Protection and Affordable Care Act (PPACA) requires that by Jan. 1, the Department of Health and Human Services (HHS) establish a shared-savings program that "promotes accountability for a patient population and coordinates items and services under (Medicare) parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery."

Under this program, groups of healthcare providers organized into accountable care organizations (ACOs) that meet performance standards set by HHS will earn portions of the savings their efforts generate. The PPACA also tasks HHS with establishing ACO criteria.

"Currently, all these laws and associated guidelines favor hospital-based systems with employed physicians," writes Michael D. Maves, M.D., MBA, AMA, executive vice president and CEO. Conversely, nearly 80 percent of U.S. office-based physicians work in practices with nine physicians or less, AMA says.

"Few dermatology practices are employed by hospitals," adds William D. James, M.D., American Academy of Dermatology immediate past president, in a letter to CMS. ACO relationships "should be such that practices can operate independently of any associated hospital or health system," he says.

Nevertheless, says Tim Coan, CEO of ALN Medical Management, most experts believe ACOs will be fundamentally rooted in large-hospital integrated delivery systems. "If you're trying to put a physician network together to (assume) risk for delivering patient care, there is no way you want to string together a bunch of independent physicians. The work will take way too long."

Andrew P. Lazar, M.D., a Modesto, Calif.-based dermatologist in a multispecialty group practice, says it's clear that "dermatologists will have to try to join with a hospital or large single- or multi-specialty group to remain viable in the long run."

Adds Mr. Coan, "Most dermatology groups won't have a seat at the table in forming the ACOs. The heavy lifting will be done by hospital systems, primary care groups" and large specialties. "Once they get it figured out, they will say, 'We need some dermatologists to take care of a handful of patients.'

"We tell all specialty physicians that if they are not in conversations with their competitors in their market about how a subset of them can come together for leverage, they're foolish," he adds.

CMS plans a "listening session" to hear stakeholder ideas on ACOs this summer, the organization says.