Accountable Care Organizations Larry J. Witmer, D.O. Associate Family Medicine Director UH Richmond Medical Center Family Physician UHMP Twinsburg Family Medicine
Objectives The Patient Protection and Affordable Care Act Define Accountable Care Organizations (ACOs) Differentiate ACOs from Payment Reforms Guiding Reform Principles How does an ACO work? Key Features Potential Problems Legal Concerns
The Patient Protection and Affordable Care Act Section 3022 of the Patient Protection and Affordable Care Act (PPACA) creates the Medicare Shared Savings program, allowing ACOs to contract with Medicare by January 2012. According to the PPACA, the Medicare Shared Savings program, "promotes accountability for a patient population and coordinates items and services under part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery".
The Patient Protection and Affordable Care Act The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it The ACO shall enter into an agreement with the government to participate in the program for not less than a 3-year period The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments for shared savings to participating providers of services and suppliers The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO under subsection
The Patient Protection and Affordable Care Act At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the ACO program The ACO shall provide the government with such information regarding ACO professionals participating in the ACO as the government determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2) The ACO shall have in place a leadership and management structure that includes clinical and administrative systems
The Patient Protection and Affordable Care Act The ACO shall 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, remote patient monitoring, and other such enabling technologies The ACO shall demonstrate to the government that it meets patient- centeredness criteria specified by the government , such as the use of patient and caregiver assessments or the use of individualized care plans The ACO participant cannot participate in other Medicare shared savings programs The ACO entity is responsible for distributing savings to participating entities The ACO must have a process for evaluating the health needs of the population it serves
Accountable Care Organization An Accountable Care Organization is a type of payment and delivery reform model that seeks to tie provider reimbursements to quality measures and reductions in the total cost of care for an assigned population of patients A group of coordinated health care providers form an ACO, and would then provide care to a group of patients TV analogy
Accountable Care Organization The ACO may use a range of different payment models (capitation, fee-for- service with asymmetric or symmetric shared savings, etc.). The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided.
Accountable Care Organization According to the Centers for Medicare and Medicaid Services (CMS), an ACO is "an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.“ Estimate of 78 million Americans on Medicare in 2030
Accountable Care Organization The phrase ACO is attributed to Dr. Elliot Fisher of Dartmouth Medical School. Dr. Fisher has led the Dartmouth Atlas Project — a project that has, for the last 30 years, documented the variation in care across the United States. The Dartmouth Atlas has focused on both the quality of health care as well as its cost.
Increased Cost doesn’t equal better Care More importantly, they have reported on the relationship between the two, and their findings are nothing short of an indictment of our current paradigm Specifically, their findings illustrate that there exists wide variations in the cost of care across the country, and profoundly, that the regions that spend more per patient do not necessarily obtain better outcomes.
Different than Payment Reforms Term ACO “grew out of an exchange between physician colleagues in which they were trying to determine a proper “locus for shared accountability” for a patient’s health care HMO’s and other health insurers are obvious candidates, but as Dr. Fisher noted, HMOs only comprise a small percentage of the current market, and health plans in general have focused on negotiating favorable prices within relatively open networks of providers The “medical home” (also referred to as a Patient Centered Medical Home) is another candidate, but is taken out of the running by Dr. Fisher because of the untested nature of medical homes, and their requirement of new payment mechanisms
Reforming Provider Payment Health care reform for those without insurance Gaps in quality Rising health care costs Variations in healthcare spending bear little correlation to quality US system doesn’t reward higher-value care Some areas, we spend 3x more on Medicare patients than others and no quality difference Preventative services underused Proven therapies for chronic disease not used Medical errors and safety concerns (EMRs not mainstream)
Reforming Provider Payment Promote high-volume and high-intensity care regardless of quality Does not support innovative approaches to coordinating care or preventing avoidable complications or services
Guiding Reforming Principles Local accountability Continuity of care is extremely important and requires coordination of multiple healthcare professionals Healthcare system must facilitate and encourage coordination Flexibility Variation of strategies based on practice types must be put in the place which will allow improvement in care
Guiding Reforming Principles Value Payment system needs to be shifted Must reward improved care at lower cost, not volume Encourage collaboration and shared responsibility among providers Consistent set of incentives must be offered to providers ACOs wouldnt do away with fee for service but would create savings incentives by offering bonuses when providers keep costs down and meet specific quality benchmarks, focusing on prevention and carefully managing patients with chronic diseases. In other words, providers would get paid more for keeping their patients healthy and out of the hospital.
Guiding Reforming Principles Transparency Measures of overall quality, cost, and general performance Consumers can make informed decisions with providers and services Consumers’ confidence may increase if they have some say in their decision-making Payment reforms already in place Bundled payments Disease management Pay-for-performance
How Does ACO Work? Establishes a spending benchmark based on expected spending If an ACO can improve quality while slowing spending growth, it receives shared savings from the payers Greater reimbursement to providers with coordination of services, wellness programs, using less resources Shared savings is incentive for ACOs to avoid expansion of healthcare capacity that often drive increased costs Medical Home with PCP as driver of care-lower spending growth, presumably better care Organizations and providers alike need to be willing to collaborate their care in a structured framework to allow this to work such as organizations in the city like University Hospitals and CCF
How Does ACO Work?Different than HMO in that patient not required to stay in network ACOs aim to replicate "the performance of an HMO" in holding down the cost of care Avoiding the structural features that give the HMO control over [patient] referral patterns
ACOs Key Features Local Accountability collaborations between primary care and specialty physicians, hospitalist, and nursing home care (to name a few)
ACOs Key Features Shared Savings Specific expenditure benchmarks based on historical trends and adjusted for patient mix Contingent on meeting designated quality thresholds If you spend less, you receive more Reinvest money saved for medical homes, slow down healthcare costs Federal health officials predicted that the government would pay $800 million in such shared savings to providers in the next three years. Even after these payments, they said, Medicare would save $510 million, and its savings could be as much as $960 million over three years.
ACOs Key Features Performance Measurement Quality of care provided based on meaningful outcome and patient experience data
ACOs: Laying the Foundation to be Successful Engagement of key local stakeholders including insurance providers, purchasers, and patients History of successful innovation and reform with respect to health IT adoption and clinical innovations Structural foundation in place at the outset Incentivizing medical students to enter into primary care 55,000-200,000 primary care shortage by 2020
ACOs: Laying the Foundation to be SuccessfulSome degree of integration within thehealthcare delivery system includingprimary care and specialistsAgreement and process in place fordistributing shared savings for providers
ACOs: Key Design Components Organization of the ACO needs to be well-defined Scope of ACO has to include primary care providers as the gatekeepers Spending and benchmarks must be projected accurately based on historical data in order to provide confidence that savings can be achieved Distribution of shared savings must be negotiated and distributed appropriately
ACOs: What Can Go Wrong?Hospital mergers and consolidation leavingfewer independent hospitals and physiciansGreater market share can lead to leverage withnegotiations with insurers, ultimately drivinghealthcare costs up again
ACOs: Legal Concerns Concern of antitrust and anti-fraud laws Limit market power the drives up prices and stifles competition If an ACO becomes so large, they would employ the majority of providers in a particular region US Justice Department Antitrust Division promises an expedited antitrust review process for these new doctor-hospital partnerships that controlled more than 50% of the local market
Conclusions ACOs are coming and soon! Reimbursement is going to slide while demands will be higher Not enough primary care physicians to handle load Cost doesn’t equal care according to studies May decrease autonomy for private and even employed physicians Pressures to “dot the I’s and cross the T’s” will be higher than ever
Question 1: What does ACO stand for in this lecture?1. Accountable Care Organization2. Animal Control Officer3. Academy of Clinical Oncology4. Administrative Compliance Order 25% 25% 25% 25% Correct answer is… 1 10 1 2 3 4 Countdown
Question 2: What are some key features of the ACO?1. Local Accountability2. Shared Savings3. Performance Measures4. All of the above 25% 25% 25% 25% Correct answer is… 4 10 1 2 3 4 Countdown
Question 3: What is the official date in which ACOs can contract with Medicare?1. January 20112. January 20123. January 20134. January 2014 25% 25% 25% 25% Correct answer is… 2 10 1 2 3 4 Countdown
Question 4: What is the minimum length of time in which the ACO has to maintain its contract with Medicare?1. 1 year2. 2 years3. 3 years4. 4 years 25% 25% 25% 25% Correct answer is… 3 10 1 2 3 4 Countdown
References "Medicare "Accountable Care Organizations" Shared Savings Program - New Section 1899 of Title XVIII, Preliminary Questions & Answers". Centers for Medicare and Medicaid Services. Retrieved January 10, 2010. http://www.healthreformwatch.com/2010/03/11/a-guide-to-accountable-care-organizations-and- their-role-in-the-senates-health-reform-bill/ Fisher ES, Shortell SM (2010). "Accountable Care Organizations: Accountable for What, to Whom, and How". JAMA 304 (15): 1715–1716. doi:10.1001/jama.2010.1513. PMID 20959584. Gold, Jenny (Jan 18, 2011). “Accountable Care Organizations, Explained”. Kaiser Health News: http://www.npr.org/2011/04/01/132937232/accountable-care-organizations-explained. Pear, Robert (March 31, 2011). “Standards Set for Joint Ventures to Improve Health Care”. NY Times: http://www.nytimes.com/2011/04/01/health/policy/01health.html