2. The Patient Protection &
Affordable Care Act (ACA)
Became law in March 2010.
Supreme Court upholds constitutionality of ACA
June 2012.
Authorized creation of Medicare Shared Savings
Program (MSSP).
3. Medicare Shared
Savings Program (MSSP)
MSSP designed to improve beneficiary outcomes
and increase value of care by promoting:
Accountability for patient population;
Coordination of care for services;
Investment in infrastructure; and
Redesign of care processes.
4. What are ACOs?
ACOs are the vehicles through which
providers/suppliers participate in the MSSP.
A legal entity designed to manage and coordinate care
for Medicare fee-for-service beneficiaries under the
MSSP.
5. Fundamental Principles of ACOs
Improve
Care for
Beneficiari
es
Enhance Health
in its
Population
Reduce
Growth of
Beneficiary
Expenditur
es
What are ACOs?
6. ACO Providers
Providers:
Hospital;
Critical Access Hospital ("CAH");
Skilled Nursing Facility;
Comprehensive Outpatient Rehabilitation Facility
("CORF");
Home Health Agency;
Hospice participating in Medicare;
Clinic;
Rehabilitation Agency;
Public Health Agency (limited); or
Community Mental Health Center (limited).
7. ACO Suppliers
& Professionals
Suppliers:
Physician or other practitioner, or an entity other than a
provider, that furnishes health care services under
Medicare.
ACO Professionals:
An ACO provider/supplier who is either:
1) a physician; or
2) a practitioner (a physician assistant, a nurse practitioner,
or a clinical nurse specialist).
8. ACO Participants
ACOs are a collaboration of Participants, Providers,
Suppliers and Professionals.
Participants: Individual or group of ACO
providers/suppliers that alone or together with one
or more other ACO Participants comprises an ACO.
9. ACO Formation
& Participation
There is a distinction between individuals and
entities that are permitted to form an ACO and those
that are merely allowed to participate in an ACO
that has already been created.
10. There are seven groups of ACO Participants eligible to form an
ACO:
ACO professionals in group practice arrangements;
Networks of individual practices of ACO professionals;
Partnerships or joint venture arrangements between hospitals
and ACO professionals;
Hospitals employing ACO professionals;
CAHs that bill under Method II;
Rural Health Clinics ("RHC"); and
Federally Qualified Health Centers ("FQHC").
Who Can Form an ACO?
11. Other Medicare-enrolled Providers and Suppliers are eligible to
participate in an ACO:
Who Can Participate in an ACO?
• Skilled Nursing
Facilities
• Pharmacies
• CORFs
• Home Health
Agencies
• Nursing Homes
• Medicare-Enrolled
Hospices
• Outpatient Clinics
(limited)
• Rehabilitation Agencies
or Public Health
Agencies
• Long-Term Care
Hospitals
• Community Mental
Health Centers (limited)
12. ACO Legal Structures
The Structure of an ACO must allow for:
Receipt and distribution of MSSP payments to
participating providers and suppliers;
Repayment of shared losses to CMS;
Mechanisms for compliance with quality care and
performance standards; and
Fulfillment of the governance, leadership and
management and patient-centeredness criteria of the
MSSP.
13. ACO Legal Structures
The ACO must be a legal entity formed under
applicable State, Federal or Tribal Law.
Partnership;
Corporation;
Limited Liability Company;
Foundation; or
Other Legal Entity.
14. ACO Legal Structures
Do you form a new entity or can you use an existing
entity for your ACO?
15. Types of ACOs
Integrated Delivery System Model ACO
CMS
Health System ACO
Hospital Physicians
Skilled
Nursing
Facility
Etc.
16. Types of ACOs
PHO Model ACO
PHO
ACO
Hospital
Independent
Practice
Assn.
CMS
17. Types of ACOs
Independent Practice Association Model ACO
IPA
ACO
CMS
PhysicianPhysicianPhysicianPhysician
18. Types of ACOs
Group Practice Model ACO
Group
Practice
ACO
CMS
SpecialistsHospital
19. ACO Governance
& Governing Body
An ACO must establish a mechanism for shared
governance.
An ACO must maintain an identifiable governing
body with appropriate authority.
ACO Participants must have meaningful
participation in both the composition and control of
the ACO's governing body.
20. ACO Governance
& Governing Body
ACOs are designed to be provider-led
organizations.
At least 75% of the control of the ACO's governing
body must be held by ACO participants.
21. ACO Governance
& Governing Body
The ACO governing body must include at least one
Medicare beneficiary representative.
Goal: Ensure that patients' interests are properly
represented as the ACO seeks to improve care for
beneficiaries and enhance health in the population.
The governing body of a Pioneer ACOs must also
include a Consumer Advocate.
22. ACO Governance
& Governing Body
The type of governing body used by an ACO will
have will depend on its corporate structure.
Corporation – Board of Directors
Limited Liability Company – Board of Managers
Foundation – Board of Trustees
23. Legal Risks to ACOs
Fiduciary Duties and Ethical Conflicts
Corporate Practice of Medicine
Stark Laws, Anti-Kickback Statute and Civil
Monetary Penalties
24. ACO Operations:
Leadership / Management
An ACO's leadership and management structure is
designed to be a dual system:
Administrative; and
Clinical.
26. ACO Operations:
Clinical Systems
Clinical management and oversight of the ACO
must be managed by a senior-level medical director
who is a physician and one of the ACO's
providers/suppliers.
Board-certified physician;
Licensed in a State in which the ACO operates; and
Physically present on a regular basis at a location
participating in the ACO.
27. ACO Operations:
Administrative Systems
The appointment and removal of the ACO's
operational leader must be under the control of the
ACO's governing body.
An ACO's operations must be managed by an
executive, officer, manager, general partner, or
similar party.
Must have the ability to influence or direct clinical
practice to improve efficiency processes and
outcomes.
28. Required Processes &
Patient-Centered Criteria
An ACO must promote:
evidence-based medicine;
patient and caregiver engagement;
reporting on quality and cost measures; and
coordinating care.
An ACO must also have a patient-centric focus that
is promoted by the governing body and integrated
into practice by leadership and management.
29. CMS prefers that an ACO have a certain number of
assigned Medicare beneficiaries to participate in the
MSSP:
ACO – 5,000 beneficiaries; and
Pioneer ACO – 15,000 beneficiaries.
ACO Membership
30. During the application process, CMS evaluates the
number of beneficiaries historically assigned to the
applicable ACO participants during each of the
three years preceding the proposed effective date of
the ACO contract.
A beneficiary is assigned to an ACO based on that
beneficiary’s utilization of primary care services by
an ACO physician during an MSSP cycle.
ACO Membership
31. ACO Membership
5% of Members
= 45% of costs
15% of Members =
35% of costs
80% of Members = 20% of
costs
32. Physician Networks
Need to have enough ACO Professionals so that
most health care services can be provided through
the network.
33. Utilization Management
Predictive Modeling for Last 2 Years of Life:
Medical homes
Home Calls
Care Plans
Navigators
ER / Hospital
Hospice
Multiple Chronic Diseases:
Medical home
Care Plans
Team Care
Navigator
ER / Hospital
34. Utilization Management
Chronic Disease:
Medical Home
Care Plans
Team Care
ER / Hospital
All Others:
Medical
Contact & Education
Care Plans
ER / Hospital
35. Payment Evolution
Insurance License.
Claims Processing.
Alignment of Fee Structures.
Incentive to Move from Volume to Value.
Quality Monitoring Systems.
37. ACO Audits
42 CFR 425.314(a) – Right to Audit
Applies to ACO, ACO Participants, ACO
Providers/Suppliers and other related entities.
May audit activities related to:
Compliance with Shared Savings Program;
Quality of services performed;
Amounts do to or from CMS under participation contract;
Ability of ACO to break risk of potential loss & repay losses
to CMS.
38. ACO Audits
Main Audit Concerns for CMS:
Is the MSSP Program working?
Are ACOs operating in a compliant manner?
How are ACOs performing?
Are ACOs reporting data correctly?
Are ACOs avoiding at-risk beneficiaries?
Are ACOs receptive of beneficiary/provider/population
concerns and needs?
Are ACOs delivering appropriate levels of care?
39. ACO Audits
The Audit Process:
Quality Data
Data Reported through Group Practice Reporting Option
(GPRO)
Evaluate Beneficiary Medical Records
Evaluated by Measure; looking for discrepancy of 10%
Financial Data
Annual and Quarterly Financial Reports
Beneficiary and Provider Complaints
Business Processes
Coding, Billing, Overpayments, Etc.
40. ACO Audits
ACO Responsibilities 42 CFR 425.314(b):
Maintain appropriate records:
Medicare utilization and costs, quality performance
measures, shared savings distributions and other financial
arrangements related to ACO operations
Maintain records for 10 years
Final date of agreement period, or date of completion of any
audit, evaluation or inspection, whichever is later
Exceptions could extend period.
ACO is ultimately responsible for ACO operations
under contract with CMS – Must manage other
Participants, Providers/Suppliers, etc.