Accountable Care Organizations: A Look at ACO Design and Implementation

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This presentation briefly reviews the definition of ACOs, and details the recent (3/31/11) CMS rulings that further defined them. …

This presentation briefly reviews the definition of ACOs, and details the recent (3/31/11) CMS rulings that further defined them.

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  • 1. Accountable Care Organizations
    A Look at ACO Design and Implementation
    Keith Marple
    Keithmarple.com
  • 2. Accountable Care Organizations
    Theory of ACOs
    ACO Examples
    CMS Shared Savings Program Legislation
    My Take
  • 3. Theory of ACOs
    Defined by Elliott Fisher, MD/MPH in 2009
    Seeks to address the following problems:
    Current Incentives and System
    Fragmentation prevent providers from
    managing the health of their patient population
    Provider incomes are tied to service volume and intensity
    Patients believe that more care is better care
  • 4. Theory of ACOs
    Fisher’s Solution
    ACOs care for patient populations using integrated care teams, evidence-based medicine, and a focus on primary care.
    Legal Provider Entity
    Attributable and Significant Patient Base
    Invisibly assigned by empirical methods
    Risk-Adjusted Cost Benchmarks
    Quality Measurement and Reporting
    Shared Savings
  • 5. Some ACO Examples
    Some examples I’ll cover…
    CMS Physician Group Practice Demonstration Project
    Geisinger Health System, Danville, PA
    Montefiore Medical System, Bronx, NY
    And some in Massachusetts you probably already know about…
    Commonwealth Care Alliance
    BCBS Alternative Quality Contract Participants
    Caritas Christi Health Care
  • 6. CMS Physician Group Practice Demo
    2005 Demonstration Program to test ACO concept
    10 large physician groups chosen
    Focused on management of diabetes patient population
    Fee-for-service payment plus payment incentives for cost and quality results
    Results in Year 1
    All 10 groups improved quality of diabetes management
    8 of 10 experienced lower cost increases than national average
  • 7. Geisinger Health System
    Integrated Delivery Network Located in rural Pennsylvania
    Includes Health Plan with 250,000 covered lives, which allows Geisinger to be financially incentivized for low-cost, high-quality care
    Introduced ProvenCare model:
    Standard, evidence-based care processes
    Surgical checklists
    Money-back “Warranty” on complications
    Introduced with CABG surgeries, rolled out to other acute services
  • 8. Geisinger Health System
    Introduced ProvenCare Navigator for Case Management
  • 9. Montefiore Medical Center
    Includes 1,500 bed medical
    center and health plan with
    150,000 covered lives
    Located in poor urban neighborhood in the Bronx
    (27% below poverty line)
    Provides in-home and remote case management and chronic disease management, even with low commercial payments
  • 10. ACOs in Practice: The CMS Shared Savings Program
    Section 3022 of the Patient Protection and Affordable Care Act: CMS must establish a “Shared Savings Program” by 1/1/2012
    Final CMS rule scheduled to be published this December 2010 (Update: actually published 3/31/11)
    Participants must have:
    Formal legal structure
    PCPs with 5000+ Medicare patients
    3 year commitment to program
    Information systems to manage care and reporting
    Processes to provide evidence-based care and coordinate care across the ACO
  • 11. ACOs in Practice: The CMS Shared Savings Program
    ACO must take responsibility for >5000 Medicare beneficiaries
    Beneficiaries must be notified at time of care
    Patient cannot be limited to ACO provider network
    Shared savings available in two tiers:
    Low risk (shared savings in years 1-3, shared losses in 3)
    Up to 50% of saved dollars above 2% threshold
    More risk (shared savings and losses in years 1-3)
    Up to 60% of all saved dollars, up to 10% of shared losses
    Savings only available when reported quality benchmarks are met, and savings amounts based on total quality score of ACO
    Anti-trust and kickback laws exempt for shared savings $$
    HHS estimates $960 million in savings
  • 12. My Take on Shared Savings Program
    “Voluntary and Incremental”
    A good first step. The lack of a closed network is limiting but…
    Effects on cost and quality will be muted but still evident
    Commercial payers will follow suit, multiplying incentives
    Existing providers will be moderately successful
    By improving quality and reducing unnecessary and duplicative services
    But at the cost of excessive restructuring costs and losses
    Tightly integrated PCP networks best positioned (Harvard Vanguard)
  • 13. What’s Next
    New capital will be infused in the market for:
    Reclamation projects of struggling systems including PCP networks(ex. Caritas Christi)
    With nothing to lose, the change process in these systems will be greatly aided
    Brand new systems designed for prevention and low-cost, high-touch mid-level care teams
    Follow-on legislation will include
    Full capitation
    Limited networks
    Rate setting?