The Accountable Care Organization · Physician Group Practice (PGP) ... by meeting ever increasing...
Transcript of The Accountable Care Organization · Physician Group Practice (PGP) ... by meeting ever increasing...
The Accountable Care Organization
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Kim Harvey [email protected]
615-850-8722
3968555
ACOs: Will I Know One
When I See One?
• Relatively New Concept Derived from
Various Demonstration Programs
• No Set Structure
• ACO is a Goal, not Necessarily a
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• ACO is a Goal, not Necessarily a
Mechanism
Physician Group Practice (PGP)
Demonstration Project
• Initiated by CMS in April 2005
• Offered 10 large practices opportunity
to earn performance payments for
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to earn performance payments for
improving the quality and cost-efficiency
of health care delivered to Medicare
fee-for-service beneficiaries
PGP Demonstration Program
• Billings Clinic: Billings, MT
• Dartmouth-Hitchcock Clinic: Bedford, NH
• The Everett Clinic: Everett, WA
• Forsyth Medical Group: Winston-Salem, NC
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• Geisinger Health System: Danville, PA
• Marshfield Clinic: Marshfield, WI
• Middlesex Health System: Middletown, CT
• Park Nicollet Health Services: St. Louis Park, MN
• St. John’s Health System: Springfield, MO
• University of Michigan Faculty Group Practice:
Ann Arbor, MI
PGP Demonstration Results
• All physician groups improved clinical management of patients
• Some physician groups saved CMS money and shared in savings
Year 3: 5 groups shared in 25.3 M savings for
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• Year 3: 5 groups shared in 25.3 M savings for achieving 2% per year reductions in spending growth below “control” populations
• Program provided initial insight into ability of physicians to manage a population of patients (FFS)
Healthcare Reform: Patient Protection
and Affordable Care Act
• Shift in the reimbursement system from traditional FFS payment toward a more risk-based approach to payment or “accountable payment.”
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• Create incentives for providers to become more coordinated, more integrated, more reliable, lower cost, and more focused on treating chronic disease in a sustainable way.
• No more “the more care you provide, the more money you make” and hospitals will need to work to keep people out of the hospital
What Are ACOs?
• Entity willing to become accountable for
the quality, cost, and overall care of
Medicare FFS beneficiaries assigned to it
• Expected to meet specific organizational
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• Expected to meet specific organizational
and quality performance standards
(still to be determined)
• If standards met, eligible to
receive cost sharing
ACA: Who Can Be an ACO?
• Physicians in group practice arrangements
• Networks of individual practices of physicians
• Partnerships or joint venture arrangements
between hospitals and physicians
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between hospitals and physicians
• Hospitals and their employed physicians
• Such other groups of providers of services and suppliers as the Secretary determines appropriate
� Providers continue to submit individual claims and
be paid separately.
� If targets are met, the ACO receives back-end
percentage of the shared savings which are shared
across providers.
Accountable Care Organizations
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“…a percent (as determined appropriate by the Secretary) of
the difference between such estimated average per capita
Medicare expenditures in a year, adjusted for beneficiary
characteristics, under the ACO and such benchmark for the
ACO may be paid to the ACO as shared savings and the
remainder of such difference shall be retained by the program
under this title. The Secretary shall establish limits on the total
amount of shared savings that may be paid to an ACO under
this paragraph.”
H.R. 3590: Patient Protection and Affordable Care Act
• Division of savings between ACO and Medicare is
unspecified
• ACO organizations responsible for determining how
savings split among themselves
• Secretary authorized, but not required, to use other
payment models
Accountable Care Organizations
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payment models
• Partial capitation – arrangement under which
highly integrated care systems assume full
financial risk in return for fixed monthly payment
per beneficiary
• Risk corridors – ACOs’ potential for
profit or loss is limited
• Must establish a mechanism for shared governance and formal legal structure to receive and distribute payments for shared savings
• Prohibited from taking steps to avoid patients at
risk in order to reduce likelihood of increasing
Accountable Care Organizations
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risk in order to reduce likelihood of increasing costs to ACO
• Secretary may impose sanctions on ACO that tries to avoid such patients, up to and including termination from Medicare program
ACO in Healthcare Reform Legislation
• ACOs will be eligible to receive a percentage of the cost savings that they have realized under the traditional fee-for-service Medicare system
• ACO shall enter into a three-year agreement with HHS whereby the ACO must agree to contain at least 5,000 Medicare beneficiaries, while being prevented from
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Medicare beneficiaries, while being prevented from engaging in risk selection
• ACO must define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth or other remote patient monitoring tools
• ACO must also demonstrate to HHS that it meets defined criteria for “patient-centered care”
It’s Going to Be All about “Quality”
• ACOs need to have the ability to capture and report
data, at the group and individual provider level,
relating to measures necessary to evaluate the
quality of care furnished
• ACOs will be expected to meet third party (e.g.
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ACOs will be expected to meet third party (e.g.
Medicare) performance standards measuring the
quality of care furnished
• The bar will not be static – ACOs will be expected to
improve the quality of care furnished over time
by meeting ever increasing standards for
purposes of assessing quality of care
• To earn incentive payment, the ACO will be
expected to meet certain quality thresholds
Potential Issues with ACOs
• Anti-Kickback Statute and CMP Law
• Requirement of hospitals, physicians and other
providers to accept one payment for services and
share financial incentives could be in violation of
previous interpretations
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previous interpretations
• Antitrust consequences
• Uncertainty may deter precompetitive,
innovative arrangements
• Nonprofit hospitals
• Determine whether involvement with for-profit
physician practices complies with IRS guidelines
for nonprofit institutions
Center for Medicare and Medicaid
Innovation
• New entity within CMS established
by ACA
• Has authority to test proposed methods of
coordinated care delivery such as ACOs
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coordinated care delivery such as ACOs
• To test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals
• Preference to be given to models that also improve the coordination, quality, and efficiency of healthcare services
• The CMI shall consult representatives of relevant Federal
Center for Medicare and Medicaid
Innovation
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• The CMI shall consult representatives of relevant Federal agencies, and clinical and analytical experts with expertise in medicine and health care management
• Use open door forums or other mechanisms to seek input from interested parties
• Select models to be tested from models where the Secretary determines that there is evidence that the model addresses a defined population for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures
Challenges for ACOs
• Critical mass of provider participation
• Critical mass of payor participation
• Adequate financing for ACO start-up costs:
IT, analytic capabilities, clinical support
infrastructure, time and effort
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infrastructure, time and effort
• Technical issues – patient assignment algorithm,
performance measures and budgeting methodology
• Changing provider culture and patient behavior
– Medicare: No enrollment, no lock-in, no change
in benefits
– Modest financial incentives (at least with Level I –
shared savings)
Notice of Proposed Rulemaking
• Draft regulation for shared savings program for ACOs in the fall of 2010 (December or January)
• CMS currently soliciting input from providers, patient advocacy groups and other stakeholders
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– Written comments or statements may be sent via e-mail to: [email protected] or sent via regular mail to: Attn: ACO Legal Issues, Mail Stop C5–15–12, Centers for Medicare & Medicaid Services,
7500 Security Boulevard, Baltimore, MD 21244–1850.
Systems Implementing ACOs
• Kaiser Permanente: integrated model, 35 hospitals employ 14,000 physicians, thereby removing incentives for providers to
over-utilize care, Kaiser has also improved clinical outcomes for
chronic disease patients under coordinated care model
• Geisinger Health System: Charges flat rate for coronary bypass
procedures, which has reduced readmission rates and cost of
care
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care
• Baylor Health Care System: Converting 13 of its 26 hospitals to
an ACO model by 2015
• Montefiore: 2,500 salaried physicians, including 500 community-based primary care – to provide unified system of care. Enrolled
150,000 members under its own HMO. Flat annual fee.
Extensive EHR system.
• Piedmont: Piedmont Physicians Group and Cigna launch an
ACO pilot program in Atlanta for better care coordination in September 2010.
Secretary of HHS
• Required to establish shared savings program specifically relating to ACOs no later than January 1, 2012
• Final authority over:
– Establishment of quality performance
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– Establishment of quality performance standards and assessment of ACO’s performance
– Assignment of Medicare fee-for-service beneficiaries to ACO
– Determination of whether ACO eligible for shared savings and amount of shared savings
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BUT, ACA does:
• Permit Secretary of HHS to waive
requirements of Anti-kickback Statute,
Stark and CMP laws as necessary to
administer ACOs
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“You’ve Got a Friend in Me”
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FTC Chairman Jon Leibowitz
• FTC will consider New Safe Harbors for
ACO Arrangements
• FTC will consider establishing Expedited
Review Process
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Review Process
HHS Inspector General Daniel Levinson
• Fraud and abuse laws should not stand
in the way of provider innovation to
improve quality and reduce costs
• OIG looking closely at how HHS
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• OIG looking closely at how HHS
Secretary can effectively use the waiver
authority to develop new safe
harbors and regulatory exception
to facilitate ACO development
CMS Administrator Don Berwick
• ACO Goals
– Improving individual patient care
– Improving the health of communities
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– Lowering the cost of healthcare
services without any diminution
in quality
ACOsMedicalHome
BundledPayments
Comparison of Payment Reform
Models(The Dartmouth Brookings Accountable Care Organization Learning Network)
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ACOs
MedicalHome
BundledPayments
Comparison of Payment Reform Models(The Dartmouth Brookings Accountable Care Organization Learning Network)
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NCQA Draft ACO Criteria
• Whether the criteria should specify the types of specialists that should be included in the ACO and, if so, whether the specialists
must be part of the organization’s legal structure.
• The capabilities that should be expected for each of the four proposed ACO levels.
• Whether the eligibility criteria proposed by NCQA capture the organization types that have the capability to act as ACOs.
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organization types that have the capability to act as ACOs.
• Whether the criteria align with stakeholder expectations for
ACOs and whether the criteria fails to address areas that should
be included.
• Whether organizations seeking to become ACOs will be able to
demonstrate compliance with the criteria, and, if not, which areas
of the criteria will be most challenging.
• Whether there are critical functions not included in the current
draft standards.
Note: Deadline for comments – November 19.
Some say accountable care organizations
are like unicorns – they want to believe
in them, but they’ve never seen one.
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Others say ACOs do exist and they know
this because they have seen them in
California.
54% of insured population in California
covered by ACO-like arrangements.
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covered by ACO-like arrangements.
— Modern Healthcare Cover Story,
November 1, 2010.
ACO Lessons Learned in California
• Structure is important, but at least as important as structure is an organization’s capabilities, culture, and infrastructure, as well as the alignment of goals between the organization and its individual physicians.
• Alignment of incentives between physician organizations and hospitals offer important opportunities for performance
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and hospitals offer important opportunities for performance improvements across the entire continuum of care.
• Capitation can be effective, but payment methods should vary depending on ACO’s ability to assume risk. Note: Fee for service payment with shared savings has not been successful for efficient delivery of care.
• Health plans working together on payment methods and performance measures helped facilitate growth of ACOs in California.
ACO Lessons Learned in California
• ACOs are not the be all/end all for healthcare spending control.
• ACOs must be agnostic to insurance type.
• Difficult to balance patient choice with the desire to decrease costs and effectively coordinate care.
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• Regulation of the financial solvency of provider organizations is important to ensure market stability.
• Consumer protections from capitated provider organizations need to be balanced, not overburdening.
• Establish ACOs in geographic areas with identifiable social and economic challenges.