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.

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Accountable Care Organizations: A Look at ACO Design and Implementation

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

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