Leadership Conference Call Bundling and Accountable Care Organizations – The Potential Opportunities
Accountable Care Organizations
The House Health Care Reform bill proposes a 3-5 year ACO pilot to test different payment incentive models beginning no later than 1/1/2012. These organizations are modeled after the Physician Group Practice Demonstration which started in 2005.
Reduce cost growth and improve health outcomes
Encourage investment in infrastructure and care redesign
Reward physicians for high quality & efficiency
An ACO must:
Have a legal structure that allows ACO to receive/distribute incentive payments
Have sufficient PCPs to serve enrolled beneficiaries
Report on required quality measures & other performance data
Contribute to a best practices network/website established by CMS
Utilize patient-centered processes of care
Enroll Medicare beneficiaries (excludes Medicare Advantage and PACE) & notify them of the pilot
DEFINITION: An ACO is a group of physicians or physician practices organized to provide physician services. Permits other provider organizations to affiliate with or participate in an ACO.
Proposed ACO Pilot Payment Models
Performance Target Model: I ncentive payments occurs if beneficiaries expenditures are less than targeted spending or growth rate, & savings exceed normal variations
Partial Capitation Model: Financial risk for some, but not all, Part A & B services.
Can limit the testing of this model to highly integrated care systems and those capable of bearing financial risk.
Payments (base + incentives) must be cost neutral .
Other incentives may be developed for efficiencies, best practices, or to achieve pilot program goals.
May limit risk for high cost patients to encourage participation by smaller organizations.
Pilots maybe extended after initial 5 years, if achieve target cost reductions in first three years and consistently exceed quality standards.
Current Contracts for Value Based Purchasing These are the sites of the current contracted Value Based Purchasing that cover all sites of services for Medicare. These are not demos or pilots but have targets for reductions in readmissions, ambulatory sensitive admissions, etc. and pay across sites of service Source: Barry Straub, MD, CMS Medical Director – MedPac Presentation 6/09
House Health Reform bill (HB 3200) proposes bundling payment for the following Medicare-funded, post-acute care services:
SNF – Inpatient acute rehab
LTC hospitals – Home health
Home health – Hospital outpatient rehab
Bundled Payment Pilot Goals:
Improve coordination, quality, efficiency of services
Improve outcomes, such as reduce readmissions.
Expand current Acute Care Episode (ACE) demonstrations to pilots that include post acute services beginning 1/1/2011
Current demos bundle payment for acute care and physician services for certain cardiovascular and orthopedic diagnoses.
Bundling methodologies under discussion
All physician services
All services including ESRD drugs
Bundle services related to hospitalization for common DRGs (MedPAC)
Bundled Payments Pilots
HHS Secretary to define the details for bundling payments pilots, i.e.:
Who can receive bundled payments?
Which services should be included (e.g. should inpatient payment)?
What duration of service does the bundled payment cover?
Which inpatient providers should be included, (i.e., Critical Access Hospitals)?
Define the relationships between providers, such as terms of contracts, gain sharing, anti-referrals, anti-kickbacks, etc.
What are the expected payment offsets for efficiencies achieved?
What are the payment rates, (i.e., national, regional, etc.)?
What consumer protections are needed to assure quality care and access?
What standard assessment tool should be used? (building off the CARES tool)
What is the estimated extent to which transitions of care would be improved?
What are the proposed quality measures?
Should current program rules apply? If not, which ones should be waived? (e.g. post-acute transfer payment rules, the SNF three-day acute care rule, the 65% rehab rule)
Which providers can form an ACO? – physicians, LTC, hospitals, specialists
Which providers would lead an ACO vs. subcontract?
What does this mean for hiring, staffing in the near term?
How will subcontractor care delivery behavior change in an ACO?
What skills or staff does an ACO owner need to be successful? (e.g., risk management, financial, etc. )
If provider isn’t the ACO owner…
How can an organization position itself to be included as a subcontractor?
How does a subcontracting provider get paid? How much can they expect?
What leverage do they have in contracting with the ACO?
What is the organizational structure of an ACO and how will control be shared?
What is the appropriate size – revenue, number of physicians --for an actuarially sound ACO?
What must providers do in Phase I of ACOs/bundled payments? Phase II? Phase III? Etc.
What are the Opportunities for LarsonAllen
Develop models to:
Develop interactive models to demonstrate impact of delivery changes (e.g., reduction in hospital days/bed need, Physician compliment required, SNF short stay changes, etc.)
Help providers assess financial impact of being an ACO or participating in ACO.
Identify model organizational structures, contracting arrangements, etc.
Assist in developing implementation strategies
Develop new performance measurement dashboards to match new incentives
Assist in identifying & implementing Best Practices
Tools for preparing their business for each phase of ACOs and bundled payments