Accountable Care OrganizationsInitial Thoughts…Next steps

Response to the CMS Proposed Regulations- March 2011

Medicare ACOsCMS program beginning January 2012, with

shared savings/shared risk opportunities.Requires integration across providers and care

settingsDemands genuine focus on quality and care

coordinationOffers framework for providers to be in charge

Long awaited rule released March 31.BUT, the proposed rule includes heavy

administrative and operational requirements- greater than expected.

Assignment of BeneficiariesAssigned based on “plurality” of primary care

services with a PCP in an ACO.Based on allowed charges, not a simple count

of services.Assigned retrospectively for calculating

savings.CMS will provide list of beneficiaries

prospectively.PCPs can only participate in 1 ACO.

Quality Measures and Reporting65 quality measures, 5 domains

Patient SafetyPatient/Caregiver experiencePreventive HealthCare CoordinationAt-risk population/Frail elderly

To be eligible for shared savingsReport in Year 1Years 2 and 3, meet threshold levels and earn

performance points.

Shared SavingsMeet all minimum quality performance

standards.Achieve spending less than benchmark.Savings greater than minimum savings

requirement.

Shared SavingsTwo types

One-sided- Savings only for 2 years Capped at 7.5% of benchmark Share 50% of savings over minimum up to cap Weighted by quality score Year 3 move to upside/downside model

Two-sided Savings or losses Savings capped at 10% of benchmark Share 60% of savings over minimum up to cap Weighted by quality score Losses capped at 5% Year 1, 7.5% Year 2, 10% Year 3.

Concerns – Initial ACO RegulationsTechnology

50% of PCP’s in ACO must meet “Meaningful Use” Criteria for an EHR

ACO’s Need to aggregate patient data from different provider systems (HIE) and have analytical skills to mine, review and act on the data (Data Informatics)

Not a cheap or Quick Implementation and we are not there

Beneficiary LimitationBeneficiaries can seek care outside an ACO where they are

assignedNot clear on if CMS will allow for beneficiary inducements

to keep them in networkNo Stick….No Carrot…No Nothing

Concerns – Initial ACO Regulations Legal Issues

CMS has addressed various legal issues involving how ACO’s can operate and not run afoul of the Physician Self-Referral Law, Federal Anti-Kickback Statute by outlining proposals where ACO’s can share cost savings

OK but if you want to do things different you must get a ruling

CMS has not addressed anything related to malpractice protection. Since one of the main goals on an ACO is to cut out unnecessary care, participating in an ACO could conceivably put a practitioner attempting to practice a different style of medicine from the community at risk of malpractice

Go ahead…stick your neck out, it won’t hurt

Concerns – Initial ACO RegulationsFinancial

Costs are large to start an ACOFinancial returns are measured by CMS after the fact based upon

their risk adjusted dataInitial Shared Savings limited (greater opportunities if downside

risk shared)Initial results for Physician Group Project on which ACO’s are

based has had mixed results and negligible savings (approx. $300 per member) with some groups having no savings after large cost expenditures.

This is complicated stuff……At this point, are the limited financial gains worth the large start up costs and regulatory risk?

Concerns – Initial ACO RegulationsPCPs can only participate in 1 ACO. What if it’s not

yours?50% of participating PCPs must hit meaningful

use by end of 2012.Can’t add new physicians to ACO during

Agreement period.Must be prepared to accept potential losses by

Year 3.Degree of transparency/admin burden required.Patient notification and opt-outQuality measures reporting is onerous and must

be met to share in any savings.

Health Care TrendsThe USA and the Deficit Crisis – the current state cannot continue as Medicare and Medicaid are the main drivers of current and future deficits

Democrats pushing for CMS appointed body to essentially ration care from central government

Republications pushing for voucher type system to slow the growth of care and push decisions to beneficiaries

The Landscape is rapidly changing to move towards tighter cost controls – ACO’s or no ACO’s

Health Care Trends (Continued)The era of unchecked Fee For Service is Ending

Bundled PaymentsACO’sLimited Provider NetworksIncreased Medical ManagementHigh Deductible Health Plans

Quality Measurements are going to be an increasing part of the pictureHealth GradesPhysician Quality Reporting Initiatives (PQRI)Move towards population management and disease

management

Key Strategies to Get in Place before an ACO…Put 1st things 1st

Relationship / Linkage with Primary Care Physicians Information Technology

Investing in Electronic Health Records Technology PCP’s Specialists Hospitals

Linking providers through a Health Information Exchange (HIE) within system or as part of a larger regional entity (likely)

Reviewing Current Quality Measures and Developing Clinical Pathways

Monitor Provider performance to pathways through system reportsDevelop Relationship with Neighboring Referral Facilities and

begin groundwork to discuss relationship to link through technology and, if it makes sense works towards becoming an ACO

Rethink how you define growth New revenue will equal better outcomes vs. one more surgery/MRI. New physicians added based on their quality/cost effectiveness, not

availability and volume