Berkowitz, Scott - Accountable Care Organization "ACO": Early Experiencies


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Berkowitz, Scott - Accountable Care Organization "ACO": Early Experiencies

  1. 1. Accountable Care and Johns Hopkins Medicine Accountable Care Organization “ACO”: Early ExperiencesMIHealth: Health Management & Clinical Innovation Forum May 25, 2012 Scott A. Berkowitz, MD, MBA Medical Director; Accountable Care Assistant Professor of Medicine, Division of Cardiology No Disclosures
  2. 2. Issues to Cover• Background. What were the goals of the Affordable Care Act, and why did it include delivery system reforms, like creating Accountable Care Organizations (ACOs)?• “ACOs”. What is an ACO, who can participate, what are the “rules”, what is the governance and how is quality assessed?• Accountable Care and Johns Hopkins. Why would an academic medical center like Johns Hopkins consider accountable care arrangements like ACOs? Scott A. Berkowitz MD, MBA
  3. 3. BackgroundHealth Care Reform Scott A. Berkowitz MD, MBA
  4. 4. Quality is Inconsistent “The Cost Conundrum” by Atul Gawande (New Yorker, 2009) $/Pt Technology Med Mal Quality Tests/DevicesMcAllen, TX $15K NICU, PET, Same > 2/25 metrics +60% stress; +1- Cardiac, laws 200% CABG, #MDs ICD, PMEl Paso, TX $7.5K comparable Same > 23/25 metrics Less utilization laws Dartmouth Atlas Scott A. Berkowitz MD, MBA
  5. 5. Costs are Unsustainable Scott A. Berkowitz MD, MBA
  6. 6. Chronic Conditions and Spending• 5% of beneficiaries (greatest utilizers) consume 50% of total health expenses; 50% of beneficiaries (lowest utilizers) consume only 3%.• Multiple chronic conditions (CC) 7x greater cost than 1 CC.• Between 2000 and 2030, the number of Americans with CC will increase by 46 million.• Health care spending: 1 CC = 4x greater costs than without; and >=5 CC = 25x greater costs than without. Scott A. Berkowitz MD, MBA
  7. 7. United States and 100 Years of Health Reform• 1912 – Theodore Roosevelt first tries to pass a universal coverage health care bill.• 1940’s – Harry Truman fails to enact compulsory health insurance, and then develops a plan to provide 60 days of hospital care for Social Security recipients.• 1965 – Lyndon Johnson signs Medicare and Medicaid.• 1973 –Richard Nixon signs Health Maintenance Organization Act.• 1985 – Ronald Reagan signs COBRA.• 1997 – Bill Clinton signs the Children’s Health Insurance Program (CHIP).• 2003 – George W. Bush signs Medicare Modernization Act• 2010 – Barack Obama signs Affordable Care Act. Scott A. Berkowitz MD, MBA
  8. 8. Affordable Care Act Insurance Expansion/Reform– Coverage expansion - Insured Americans will increase from 83% (of non-elderly population) to 94% by 2019 (+32 million).– Preserves Employer-Based System (“If like what have, keep it”).– Establishes State-based “Exchange” marketplace for coverage.– Medicaid (and CHIP) eligibility increased to at least 133% FPL.– Tax credits and premium assistance for those up to 400% of Federal Poverty Level; substantial assistance for small businesses.– Individual and employer responsibility requirements (“mandates”)– No pre-existing condition exclusion (adults/kids).– Prohibit lifetime limits; Secretary establishes benefits for which insurers can set annual limits.– Children up to age 26 can stay on their parents policy. Scott A. Berkowitz MD, MBA
  9. 9. Affordable Care Act Financing• Per Non-Partisan Congressional Budget Office – <$1T total cost, but Net Deficit Reduction with offsets – Deficit Reducing in 1st 10 years and >$1T deficit reduction in 2nd 10 years (0.5% of GDP) – “Bends” curve in health spending – Extends Medicare solvency by 10 years (2016 -> 2026) – “Offsets” include: Medicare Payroll (HI) Tax, Fees on Manufacturers/Insurers, High Premium “Cadillac” Excise Tax, Productivity/MB adjustments, etc. Scott A. Berkowitz MD, MBA
  10. 10. Affordable Care Act Quality and Delivery System Reform• Paying for High Value Care. Includes: value-based purchasing, bundled payments, avoidable readmissions, accountable care organizations (ACOs) and investments in primary care.• Center for Medicare & Medicaid Innovation (CMMI) Develop, support and expand new patient-centered care and payment models to encourage evidence- based high quality care.• Independent Payment Advisory Board. Starts in 2015. Present proposals to Congress to reduce cost growth and improve quality for Medicare beneficiaries. Congress needs to take or match savings. Scott A. Berkowitz MD, MBA
  11. 11. Program Basics Accountable CareOrganizations (“ACOs”) Scott A. Berkowitz MD, MBA
  12. 12. Health Reform and ACOs• Section 3022 of the Affordable Care Act (ACA), created the Medicare Shared Savings Program.• Voluntary program that can impact Medicare “fee- for-service” payments (Parts A and B).• These are Accountable Care Organizations (ACOs) under Medicare. Scott A. Berkowitz MD, MBA
  13. 13. What is an “ACO”?• A provider-based care delivery arrangement, in collaboration with a payer, where the providers are accountable for the quality, cost and overall care of a set of patients. In the MSSP, the payer is Medicare.• The goal is to organize and coordinate the end- to-end delivery of services for each participant across the care continuum. Scott A. Berkowitz MD, MBA
  14. 14. ACOs: ACA and Rule-makingAffordable Care Act (ACA):• Basic Framework• March 30, 2010.Proposed Rule:• 400 pages• March 31, 2011.Final Rule:• 700 pages (>1300 Comments)• October 20, 2011.• First cycles: Apr 1 and Jul 1, 2012 Scott A. Berkowitz MD, MBA
  15. 15. Medicare ACO Patients and Providers• 3-year participation agreement.• Patients. Patients are free to choose any provider they would like. There is NO network “lock in”.• >5000 beneficiary minimum.• Eligible Providers. Includes: ACO professionals in group practice arrangements, networks of individual practices of ACO professionals, partnerships or joint venture arrangements, hospitals employing ACO professionals, Federally Qualified Health Centers and Rural Health Clinics. Scott A. Berkowitz MD, MBA
  16. 16. Medicare ACO Attribution• Prospective Assignment: 2 Step process:• Step 1: For beneficiaries receiving at least one primary care service from an MD, use plurality of allowed charges for primary care services for primary care MDs.• Step 2: If not primary care services by primary care MD, use plurality of allowed charges for primary care services by an ACO professional.• MDs and NP/PAs treated differently. Scott A. Berkowitz MD, MBA
  17. 17. Medicare ACO Quality Measurement CMS-1345-F 327• Phased-in Reporting and Performance Table 2: ACO Agreement Period Pay for Performance Phase-In Summary Performance Year 1 Performance Year 2 Performance Year 3 Pay for Performance 0 25 32 Pay for Reporting 33 8 1 Total 33 33 33• Method of Submission. Survey (7);have modified this finalGPRO Final Decision: In summary, in response to comments, we Claims (3); rule Web Interface (22); EHR Incentive Reporting (1) the by reducing the measure set to 33 measures total, or 23 scored measures when accounting for• Measure “Weight”. Each Domain isnothing diabetes and 25%. patient experience survey modules scored as 1 measure and the all or Weighted CAD Each measure iseach. We believe judiciously removing certain redundant, is measures scored as 1 measure generally 2 points, except EHR doubled at 4orpoints. measures would still provide a high standard of quality operationally complex, burdensome for participating ACOs while providingScott A. Berkowitz MD,with other CMS and HHS quality greater alignment MBA
  18. 18. Table 3: Sliding Scale M easure Scoring Approach Quality Points EHR M easure ACO Performance Level (all measures except EHR) Quality Points90+ percentile FFS/MA Rate or 90+ percent 2 points 4 points80+ percentile FFS/MA Rate or 80+ percent 1.85 points 3.7 pointsCMS-1345-F 35870+ percentile FFS/MA Rate or 70+ percent 1.7 points 3.4 points Quality Points EHR M eas ure ACO Performance Level (all measures except EHR) Quality Points60+ percentile FFS/MA Rate or 60+ percent 1.55 points 3.1 points50+ percentile FFS/MA Rate or 50+ percent 1.4 points 2.8 points40+ percentile FFS/MA Rate or 40+ percent 1.25 points 2.5 points30+ percentile FFS/MA Rate or 30+ percent 1.10 point 2.2 points<30 percentile FFS/MA Rate or <30 percent No points No points Table 4: Total Points for Each Domain within the Quality Performance Standard Total Total I ndividual Potential Domain Domain Total M easures for Scoring Purposes M eas ures Points Per Weight (Table F1) DomainPatient/Caregiver 1 measure with 6 survey module measures 7 4 25%Experience combined, plus 1 individual measureCare Coordination/ 6 measures, plus the EHR measure double- 6 14 25%Patient Safety weighted (4 points)Preventative Health 8 8 measures 16 25% 7 measures, including 5 component diabetesAt Risk Population 12 composite measure and 2 component CAD 14 25% composite measureTotal 33 23 48 100%
  19. 19. Medicare ACO Payment• Maintains “fee-for-service” but allows for shared savings if meet high quality standards and reduce cost versus trend. Eases into the ACO model.• 2 Tracks: – “Track 1” (one sided; shared savings; carrots only) for duration of 1st agreement period (3 years). Max up to 50% shared savings. – “Track 2” (two sided; shared risk; carrots/sticks) so some can take on performance-based risk with more reward. Maximum up to 60% shared savings. – 1st dollar savings after minimum savings rate. Scott A. Berkowitz MD, MBA
  20. 20. Medicare ACONumber of Beneficiaries Scott A. Berkowitz MD, MBA
  21. 21. Medicare ACO Governance and Leadership• Shared Governance. Board is responsible for the success or failure of the ACO, and has control over ACO Leadership. Providers in the aggregate must retain at least 75% Board control, and the Board is to have at least 1 beneficiary (applicant can seek exceptions).• Leadership. The ACO must be managed by an executive. Clinical management directed by senior-level medical director (can be part-time) who is board-certified and in the ACO. Must have a compliance officer. Each ACO participant/provider/supplier must demonstrate a meaningful commitment to the ACO. Scott A. Berkowitz MD, MBA
  22. 22. Medicare ACO Other• TINs/Legal Entity. ACO is a collection of Tax ID Numbers (TINs). Any one TIN can only participate in one Medicare shared savings program. Must be a Legal Entity Capable of Distributing Shared Savings.• Data. De-identified data available. Notify patients of additional data sharing options with the opportunity to decline.• Electronic Health Records Use. Important quality measure. Scott A. Berkowitz MD, MBA
  23. 23. Medicare ACO Other• Indirect Medical Education & Disproportionate Share Hospital Payments (IME/DSH). Now excluded from both benchmark and performance in calculations (important for AMCs).• No Mandatory Anti-trust Review. Prior was a requirement depending on the concentration of providers/services.• Marketing. Strict requirements with significant transparency. “File and use” after 5 days and certify compliance. Scott A. Berkowitz MD, MBA
  24. 24. Other ACO Model “Pioneer ACO Model”• Started January 1, 2012.• 32 participants including: Partners, Beth Israel Deaconess, Dartmouth, University of Michigan, among others.• Designed for experienced healthcare delivery entities more ready to assume risk.• In year 3, if savings achieved, allowed to transition from a shared savings model (strictly “fee for service”) to a population-based payment model (receive monthly population-based payment and 50% FFS payments).• More than 50% revenues in outcomes-based contracts (ie. shared savings) by end of year 2 (MC, Private, etc). Scott A. Berkowitz MD, MBA
  25. 25. Johns Hopkins Medicine and Academic Medical Centers (AMCs) Accountable Care:Challenges And Opportunities Scott A. Berkowitz MD, MBA
  26. 26. Will AMCs form ACOs?• Yes, some will.• Pioneer ACOs: University of Michigan, Partners (MGH/Brigham) and Dartmouth. Others will apply to the MSSP.• Although some AMCs may choose to form ACOs or other accountable care arrangements, there are challenges and opportunities for AMCs in considering novel payment and care models.• Early challenges will be financial and cultural. Scott A. Berkowitz MD, MBA
  27. 27. Accountable Care and JHM N Engl J Med 2011; 364:e12. Feb 17, 2011. Scott A. Berkowitz MD, MBA
  28. 28. Challenges Financial• Shared Savings Dilemma/Opportunity. If reduce Medicare charges by 10%, and can keep 50% of difference, you end up with 95% of current charges. Need improved efficiency, to back-fill beds, and reduce costs.• Risk. How much financial risk will AMCs be willing to assume?• Population Health. Need to Coordinate.• Health IT/Investment. Costs can be substantial. Scott A. Berkowitz MD, MBA
  29. 29. Challenges Cultural• AMC culture. – AMCs contain many “silos” but need integration among Divisions and Departments. – JHH #1 for over 20 years. Why change? – Trainee Education/Autonomy• Promotion/Advancement. – Generally based on “scholarship” rather than providing high quality clinical care.• “80%/20%” Research/Clinical Care. – Sufficient numbers of providers to ensure access? – Motivations and Incentives. Scott A. Berkowitz MD, MBA
  30. 30. Opportunities Care Delivery• Clinical Integration and Culture Alignment. Promotes care coordination and focus on improved quality and reduced cost across the care continuum.• Incentivizes Primary Care Access/Expansion. Primary care expansion improves access, preventive care and post-acute care. Creates opportunities for more patients to enter the Hopkins system.• Payment Models. Shared savings or other payment mechanisms can allow for more investment in improved care. Scott A. Berkowitz MD, MBA
  31. 31. Opportunities Education and Research• Education. Modernize programs. “Flexner Report 2.0”.• Become a “Learning Laboratory”. Use research in care delivery design, study the impact of interventions, and promote continuous process improvement.• Measurement. Develop, pilot and disseminate new patient-centered measures.• Novel funding mechanisms. – CMMI ($10B for new models) – CER ($500M per year by 2015) – NIH – AHRQ (Innovation Grants, etc.) – Others Scott A. Berkowitz MD, MBA
  32. 32. Accountable Care and JHM Bottom Line• Synergy. Accountable care opportunities (ACOs and others) allow JHM to build upon new EHR, organizational structure (“JHM 3.0”), managed care plan, and other transformation efforts as a modern Academic Medical System (AMS).• Inter-Dependence and Vision. Accountable care opportunities are inter-related. Must plan ahead.• Lead by Example. Accountable care can allow JHM and other AMCs to lead in promoting “value”, implement innovative delivery models, modernize medical/nursing education and expand the research enterprise. This supports our tripartite mission and our community. Scott A. Berkowitz MD, MBA
  33. 33. The Wisest “Doctor” – Dr. Seuss Scott A. Berkowitz MD, MBA