Agenda What is an Accountable Care Organization?


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  • Confusing aims
    Absent or poor measurement
  • (Defined by insurance carrier)
  • An alternative to Gainsharing model, is to set up co-management model.
    No shelf life, can be enduring.
    Describe model
    Scope of Services flexible
    Variation with only one physician group participating, where you can eliminate legal entity and just develop a contract with group.
    Care must taken in establishing metrics for incentive payout
    Application to both inpatient and outpatient services.
  • Agenda What is an Accountable Care Organization?

    1. 1. 2October, 2010 Agenda 1. What is an Accountable Care Organization? 2. Industry Changes and Drivers • Who can be an ACO? Reality testing… • Role of Specialty Hospitals & NCI CCCs • ACO Physician / Hospital Alignment Options • ACO Development Challenges 3. ACO Pilots & US Oncology: What are they doing?
    2. 2. 3October, 2010 What is an Accountable Care Organization (ACO)?
    3. 3. 4October, 2010 ACOs can strengthen ongoing reform efforts • Medical home, • HIT ACOs can operate in conjunction with current payment structures  FFS  Bundled payments  Partial/full capitation ACOs ACOs address fundamental health policy challengesConfusing aims Absent or poor measurement Fragmented care Wrong financial incentives ACO Reform consistent with Other Reforms
    4. 4. 5October, 2010 Summary of current CMS ACO Criteria CMS Requirements for an ACO: 1. Have a formal legal structure to receive and distribute shared savings 2. Have a sufficient number of primary care professionals for the number of assigned beneficiaries (to be 5,000 at a minimum) 3. Agree to participate in the program for not less than a 3-year period 4. Have sufficient information regarding participating ACO health care professionals as the Secretary determines necessary to support beneficiary assignment and the determination of payments for shared savings 5. Have a leadership and management structure that includes clinical and administrative systems 6. Have defined processes to (a) promote evidence-based medicine, (b) report the necessary data to evaluate quality and cost measures (this could incorporate requirements of other programs, such as the Physician Quality Reporting Initiative (PQRI), Electronic Prescribing (eRx), and Electronic Health Records (EHR), and (c) coordinate care 7. Demonstrate it meets patient-centeredness criteria, as determined by the Secretary. 8. Additional details regarding these requirements will be available in the proposed regulations expected by December 2010. Source: Patient Protection and Affordable Care Act
    5. 5. 6October, 2010  Establish robust HIT infrastructure  Implement cost-saving and quality- improving medical interventions  Evaluate performance at the system level  Restructure payment incentives to support accountability for overall quality and costs across care settings Key Design Elements  Pay for better value – improved overall health while reducing costs for patients  Provide timely feedback to providers  Require providers to report on utilization and quality New model: It’s the system - Establish organizations accountable for aims and capable of redesigning practice and managing capacity Realign incentives – both financial and clinical – with aims Core Principles Clarify aims to emphasize better health, better quality care, lower costs – for patients and communities Better information that engages physicians, supports improvement, and informs consumers Accountability, “Systemness” & Incentives
    6. 6. 7October, 2010 1 2 3 Important Caveats • ACOs are not gatekeepers and don’t have closed networks (e.g., HMO networks) • ACOs do not require changes to benefit structures • ACOs do not require patient enrollment ACOs differ but share a few, key Elements
    7. 7. 8October, 2010 Payer / Provider Requirements 1. Sharing savings between payers and providers if performance exceeds both financial and quality targets 2. Set financial targets for assigned population based on historical spending and trend using a standardized actuarial methodology 3. Use standardized attribution methodology to assign patients to providers exclusively affiliated with that ACO 4. Ensure a minimum “risk pool” size to sustain meaningful measurement and acceptable statistical stability • e.g., 15,000 commercial, 10,000 Medicaid, or 5,000 Medicare patients 5. Use a minimum common core set of quality measures (can add more) 6. Provide data feeds to ACOs in a timely manner 7. Work with providers on other steps to help the ACO in lowering costs and improving quality
    8. 8. 9October, 2010 Providers sign agreement to participate with ACO Patients are assigned to their PCP based on the majority of their outpatient E&M visits • Defined by the ACO • PCPs must be exclusive to one ACO ­ Limits concerns about selection and dumping • Specialists can be part of multiple ACOs • Uses data from insurer How are patients assigned to the ACO?
    9. 9. 10October, 2010 Community Providers Accountable Care Organizations Bonus- Eligible Providers (ACO defined) Community Providers are not part of the ACO, although they may provide care to ACO patient. Some community providers may have contractual relationships with the ACO or routinely receive referrals, while others may have no relationship with the ACO or be out of area, such as Oncology Centers. ACO Providers: These providers are members of the ACO and, for physicians exclusive to the ACO, can have patients assigned to them. Providers not used for patient assignment may participate in multiple ACOs. ACO members have governance rights. Bonus-Eligible Providers: Each ACO prospectively determines eligibility for and the allocation of shared savings to ACO members, which could range from a subset to all ACO members. The treatment of providers can vary (e.g., all PCPs could receive bonuses, while only some specialists might), and the amount of bonuses could also vary by provider. Providers Used for Patient Assignment (ACO Defined) Understanding Provider Relationship
    10. 10. 11October, 2010 Key considerations for ACO Providers 1. Patients can only be attributed to providers who are members of one ACO  Allowing patients to be assigned to providers participating in more than one ACO greatly complicates attribution and raises risk selection concerns 2. ACO Membership, Governance, and Referrals  ACO members have governance rights • The ACO decides bonus allocation  Providers may direct referrals to ACO members and non-members • The ACO monitors utilization and can establish referral policies 3. Shared Savings (or Losses)  Timely performance reporting essential for successful ACO  The ACO decides how to allocate shared savings bonus among its members  For ACOs selecting “symmetric risk” (level II), all ACO members would have fees cut if spending exceeds budget target
    11. 11. 12October, 2010  ACO receives mix of FFS and prospective fixed payment  If successful at meeting budget and performance targets, greater financial benefits  If ACO exceeds budget, more risk means greater financial downside  Only appropriate for providers with robust infrastructure, demonstrated track record in finances and quality and providing relatively full range of services  Payments can still be tied to current payment system, although ACO could receive revenue from payers and distribute funds to members (depending on ACO contracts)  At risk for losses if spending exceeds targets  Increased incentive for providers to decrease costs due to risk of losses  Attractive to providers with some infrastructure or care coordination capability and demonstrated track record  Continue operating under current insurance contracts/coverage models (e.g., FFS)  No risk for losses if spending exceeds targets  Most incremental approach with least barriers for entry  Attractive to new entities, risk- adverse providers, or entities with limited organizational capacity, range of covered services, or experience working with other providers Level 1 Asymmetric shared-savings Level 2 Symmetric Model Level 3 Partial Capitation Model ACOs offer a wide range of approaches Performance Payment Framework
    12. 12. 13October, 2010  ACOs use more complete clinical data (e.g., electronic records, registries) and robust patient-generated data (e.g., Health Risk Appraisals, functional status)  Well-established and robust HIT infrastructure  Focus on full spectrum of care and health system priorities  ACOs use specific clinical data (e.g., electronic laboratory results) and limited survey data  More sophisticated HIT infrastructure in place  Greater focus on full spectrum of care  ACOs have access to medical, pharmacy, and laboratory claims from payers (claims- based measures)  Relatively limited health infrastructure  Limited to focusing on primary care services (starter set of measures) Beginning Intermediate Advanced Beginning, Intermediate, and Advanced Quality Measures Over time, measures should address multiple priorities, be outcome-oriented, and span the continuum of care
    13. 13. 14October, 2010 Starter set of measures Domain Beginning Measures* Overuse Low back pain: use of imaging studies Appropriate Testing for Children With Pharyngitis Avoidance of Antibiotic Treatment in Adults with Acute Bronchitis Appropriate treatment for children with upper respiratory infection (URI) Population Health Breast Cancer Screening Cervical Cancer Screening Colorectal Cancer Screening Diabetes: HbA1c Management (Testing) Diabetes: Cholesterol Management (Testing) Cholesterol Management for Patients with Cardiovascular Conditions (Testing) Use of appropriate medications for people with asthma Persistence of Beta-Blocker Treatment After a Heart Attack Safety Annual monitoring for patients on persistent medications Care Coordination** 30-day all cause (risk-adjusted) readmission rate * Most are HEDIS measures ** Test measure
    14. 14. 15October, 2010 ACOs and Oncology Clinics – A Need for Cooperation and “Systemness” Need  ACOs need to organize/coordinate services and be accountable for quality and a budget • For Primary Care inside the ACO • For some Specialty Care inside the ACO • For many types of Specialty care outside the ACO Role for Oncology Clinics  High value/efficiency • Proof that patients are provided with cost-effective care • A single oncology clinic/group will likely serve several ACOs • Possibly use of episode bundles for payment  High quality, efficient care • What are the right outcomes to measure? • Are those metrics available today?
    15. 15. 16October, 2010 ACOs and Oncology Clinics Many Oncology Clinics will:  Not be a part of the ACO medical staff • ACOs will have mainly Primary Care MDs using a primary care team approach (NPs, PAs, MAs) • Some medical specialists (e.g., cardiologists, endocrinologists)  Serve multiple ACOs • In a large metropolitan area, competing Oncology groups/clinics • Most efficient/highest quality groups will get more ACO referrals • As ACOs monitor their budgets and quality scores, they will need cooperative specialist partners
    16. 16. 17October, 2010 Oncology Clinic Challenges Measuring quality of processes and outcomes  Are there useful measures today?  Who does the measurement? Measuring efficiency  Does CMS measure efficiency for Medicare beneficiaries?  Do private plans or ACOs do the measurement for <65 enrollees? What is the role of ACOs with new cancer treatments?  At what site should most treatment take place?  Who makes choices about expensive new technology (e.g., proton therapy)?  What role does Comparative Effectiveness play?  What role with the new Patient Centered Outcomes Research Institute (PCORI) under ACA play?  Will the EMRs of ACOs collect data for evaluation of treatment efficacy?
    17. 17. 18October, 2010 Key Challenges for ACOs and Specialist Groups Will “critical mass” of providers and clinics join?  Enough assigned patients?  Will there be a Clinic assignment for MediCaid members? Will payers agree to participate?  Will private insurers partner with ACOs? Is they willing to do gain-sharing? Are there enough savings to be found through ACO changes?  Will specialists (e.g., oncology) show enough savings? Adequate financing for ACO start-up costs?  Infrastructure, IT, analysis, limiting ER use, etc.?  Foundation or health plan grants? Can ACOs change patient behavior & provider culture?  No enrollment, no “lock-in”, no change in benefits? Roll of the ACO for overall community population health (e.g., for obesity, smoking cessation, vaccinations, etc.)  What’s the role in prevention for the ACOs and Oncology clinics? Early treatment?
    18. 18. 19October, 2010 Why ACOs Might Succeed (Over Time) Broad, flexible system built on essential core principles  Lots of local variation possible within ACO concept 3 ACO Levels permit tailoring to different circumstances  Broadly applicable throughout the country, with “Training Wheels” for newly formed Level I ACOs  Level II offers more reward/more risk (but still limited)  Partial Capitation for highly sophisticated Level III entities, extending their model to FFS Medicare and PPOs Pathway to fundamentally shift incentives from FFS revenue centers to population health & accountable care Opportunity to change clinical and business environment  Timely data and analysis  Working collaboratively as part of a system of care  Patient involvement and responsibility
    19. 19. 20October, 2010 Health Reform, Oncology’s Role in ACOs and ACO Physician / Hospital Alignment Options
    20. 20. 21October, 2010 Health Reform and emphasis on Quality
    21. 21. 22October, 2010 What’s Driving the Development of ACOs? 1. Medicare eliminated payment for never events beginning September 1, 2008. 2. The National Quality Forum list of never events is currently at 28 and continues to grow. 3. Legislation has also proposed tighter restrictions on payment for readmissions. 4. In the IPPS FY 2009 Final Rule, CMS included 10 categories of conditions that were selected for the Hospital Acquired Conditions payment reduction provision. 5. Private payers are also no longer paying for never events and selectively paying for hospital acquired conditions. Additionally, there is mounting evidence that commercial payers are shifting risk to the providers due to healthcare reform. 6. Demonstrations are already in effect for providing care outside of traditional settings. 7. Sustainable growth rate reimbursement continues to decline. Congress is looking for a permanent fix to this increasingly burdensome problem. 8. Demonstrations are already in effect for physician and hospital partnerships.
    22. 22. 23October, 2010 Quality is going to BE the bottom line • Prevention of sickness, resource consumption, redundancy, wasteful inputs • Right care, right place, right time, right provider (based on outcome evidence) • Reduced lengths of stay and unnecessary services (admissions; re-admissions) • Reduced direct cost of care delivery; greater efficiency • Reduced double-whammy of incurring costs for non-reimbursable preventable events • Potential to earn/keep gains (or avoid penalties) in payment arrangements providing quality incentives • Reduced risk of malpractice losses • Competitive advantage as a provider of choice, fueling consumer demand & revenue growth • Community health improvement; mission fulfillment Anticipated Outcomes
    23. 23. 24October, 2010 Who can be an ACO? The role of Specialty Cancer Hospitals and NCI CCCs
    24. 24. 25October, 2010 What Forms of Organizations May Become an ACO? 1. Physicians and other professionals in group practices 2. Physicians and other professionals in networks of practices 3. Partnerships or joint venture arrangements between hospitals and physicians / professionals 4. Hospitals employing physicians / professionals 5. Other forms that the Secretary of Health and Human Services may determine appropriate Source: Patient Protection and Affordable Care Act Physician / Hospital ACO Example Primary Care Physicians have the ability to create an ACO without including Hospitals and/or Specialists but do they have the resources, leverage and infrastructure to manage the risk inherent in ACOs. Key Takeaway
    25. 25. 26October, 2010 Reality Testing - ACO Organizational Requirements 1. Have a formal legal structure to receive and distribute shared savings. 2. Have a sufficient number of primary care professionals for the number of assigned beneficiaries (to be 5,000 at minimum). 3. Agree to participate in the program for not less than a 3-year period. 4. Have sufficient information regarding participating ACO health care professionals as the Secretary determines necessary to support beneficiary assignment and for the determination of payments for shared savings. 5. Have a leadership and management structure that includes clinical and administrative systems. 6. Have defined processes to (a) promote evidence-based medicine, (b) report the necessary data to evaluate quality and cost measures, and (c) coordinate care. 7. Demonstrate it meets patient-centeredness criteria, as determined by the Secretary. Requirements #2 and #4 prevent Specialty Cancer Hospitals and NCI CCCs as acting as their own ACOs but they have the expertise and knowledge to cost effectively produce predictable outcomes for very complex diseases. They will have to prove they can do it at a sustainable cost level to become the preferred solution to many ACOs in the market. Key Takeaway
    26. 26. 27October, 2010 ACO Levels & Clinical Integration • Improved access to care • Reduction in preventable ER visits and admissions • Appropriate use of testing / referral • Prevention and early diagnosis • Improved efficiency of patient care • Reduction of adverse events • Reduction in preventable readmissions • Use of lower-cost treatment options • Improved management of complex cases • Use of lower-cost, high quality providers • Use of lower-cost, more accessible settings and methods for delivery of care • Coordinated health and social services support ALTERNATIVE METHODS OF PAYMENT CapitationFFS + Shared Savings Bundled Payments Global Payments CLINICAL INTEGRATION (Additive Levels of Healthcare Providers) COSTREDUCTIONOPPORTUNITIES Oncology’s Involvement in ACOs
    27. 27. 28October, 2010 Cancer’s Role in ACOs It is important to recognize that the goal of an ACO is to take responsibility for managing the costs and quality of care provided, not providing the care itself. What does this mean for hospitals and specialists? •Hospitals: It can be beneficial to have a hospital in an ACO if the hospital is committed to the goals of the ACO of reducing costs and improving quality. •Specialists: Specialists will have an important role in patient care, but their services do not necessarily need to be part of the ACO itself. What does this mean for Specialty Cancer Hospitals and NCI CCCs?
    28. 28. 29October, 2010 Specialty Cancer Hospital ACO Role Option #1 Denton Frisco & McKinney Fort Worth Dallas Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice SCH •ACOs are formed without including Specialty Cancer Hospitals (SCH). •ACOs contract with the SCH for specialty cancer cases. Option Summary Dallas / Fort Worth Metroplex •The SCH will have to demonstrate high quality, cost-effective care to be attractive for ACOs to refer their patient population to the SCH. •To off-set lower patient admission rates, the SCH: • Will have to establish arrangements such as gain-sharing with their hospitalists and specialists to find ways to cut costs; and / or • Will have to specialize in treating more complex cancer patients to prevent outmigration of cases to NCI CCCs. SCH Position
    29. 29. 30October, 2010 Specialty Cancer Hospital ACO Role Option #2 Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Fort Worth DallasDenton Frisco & McKinney Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Specialty Cancer Hospital •ACOs are formed including Specialty Cancer Hospitals (SCH). •The SCH assists in coordinating care for several ACO patient populations. Option Summary •With its extensive administrative resources and skills, ranging from information technology to finance to quality improvement tools, the SCH is in the position to facilitate the coordination of cancer care in ACOs, instead of participating in cancer delivery at the whim of other ACOs as in Option #1. SCH Position
    30. 30. 31October, 2010 NCI CCC Multiple ACO Referral Model Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice NCI CCC designation •ACOs contract with NCI CCCs in the region (if not nationally) for highly- specialized cancer cases. •The NCI CCC will accept bundled / episode payments from the referring ACOs. Summary •Like the SCH, the NCI CCC will have to demonstrate high quality, cost-effective care. •The NCI CCC will have to develop “Delivery Care Teams” for specific types of cancer care to develop high quality, cost-effective care pathways. NCI CCC Position
    31. 31. 32October, 2010 NCI CCC Multiple ACO Referral Model However, if a NCI CCC can provide cancer care for a specialty at the same or higher quality and lower costs than other NCI CCCs, ACOs will have the incentive to refer their patient population to that NCI CCC for that specialty because the ACO will be rewarded for reducing care delivery costs. Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice Hospital Internist Oncologist Cardiac Surgeon Internist Family Practice NCI CCC designation
    32. 32. 33October, 2010 Why Hospitals and Physicians MUST align their collective goals and, thus, their incentive systems Why Hospitals need Physicians •Risk shift by payer to provider •Incentive model has changed-focus on quality and outcomes with physicians at the table •U.S. hospital market is under significant financial pressure •Accelerated and magnified due to health reform Why Physicians Need Hospitals • Lower reimbursement both for Part B & Technical/Facility •Ongoing significant Capital Needs (EMR/EHR) •Ability to drive quality out of a high cost environment •Need to integrate along the entire continuum of care •Need for Professional Management in Risk Environment
    33. 33. 34October, 2010 ACO Physician/Hospital Organizational Designs
    34. 34. 35October, 2010 Criteria for a Successful Model 1. Model facilitates alignment between physicians and hospitals; 2. Physician compensation structure will align the incentives of productivity, quality, cost and outcome; 3. Ensure physician engagement and leadership in the organization; 4. Develop data systems that support data exchange, co-management and measurement of longitudinal outcomes and costs; and, 5. Retain an element of flexibility that will allow the model to adapt as the rules of the game continue to change. Most Common Alignment Models
    35. 35. 36October, 2010 Primary Options for Physician/Hospital Alignment 1. Integrated Delivery Systems • Provider Based Clinics • Hospital Affiliated Group Practice • Employing Physicians (Not Provider Based) • Hospital Outpatient Department Contracting with Physician Group (Either Hospital Affiliated or Independent) (Provider Based) • Medical Foundation (Not Provider Based) • Group Practice Joint Venture 2. Physician-Hospital Organizations via Joint Ventures • Group Practice • Diagnostic Services • PHO (Physician Hospital Organization) 3. Co-Management Company (w or w/o PHO) Most Common Alignment Models
    36. 36. 37October, 2010 Clinical/Service Line Co-Management Company
    37. 37. 38October, 2010 What is the Co-Management Model? 1. The Hospital and Physicians would form a new entity in a joint venture (Management Company) that would contract with the Hospital to manage the a Service Line. 2. Ownership in Management Company would be scalable between the Hospital and the Physicians. 3. The compensation for services provided by Management Company would include both fixed and incentive components such as: • Base Management Fee • Incentive Compensation 4. Initial capital to form the entity would be limited. 5. Income from operations would be shared based on the investors’ proportional share.
    38. 38. 39October, 2010 Co-Management Company Model Overview Service Line Hospital Physicians Compensation Co-Management Company LLC • Base management fees • Director fees • Incentive compensation ServiceContract toManage X% X%
    39. 39. 40October, 2010 Pros  HOPD reimbursement rate maintained for OP services delivered on campus  Quick to execute. No construction.  Potential to increase physician productivity, through improved operational and clinical outcomes.  Provides “Flexibility” to Hospital and Physicians for future collaborative initiatives  Strong model for initiating Hospital/Physician alignment and collaboration  Improved communication between Hospital and Physicians  Creates a mechanism for Physicians to play an active role in managing the service line  Financial returns from the management company could be realized shortly after launch  Limited capital investment requirements, limits physicians ‘at- risk’ investment.  No current issues of uncertainty because of regulatory issues (Medicare, IRS, etc…)  Provides access to capital for acquisition of technology, without duplicating resources.  Win/Win for Physicians and Hospital Cons  Not a passive investment, requires active participation by the physicians.  Lack of familiarity with the management company concept.  Based upon the net revenues and physician interviews, there may not be enough of a monetary return to satisfy the physicians. Co-Management Company Co Management Company Model
    40. 40. 41October, 2010 Co-Management Model Compensation Components Base Management Fee Medical Director Fees Day-to-Day Operations Oversight Incentive Compensation Budgetary(1) Objectives Quality of Service Incentives Operational(1) Efficiency Incentives New Program Development Board Participation Finance Committee Participation Operating Committee Participation (1) Subject to Legal and Regulatory limitations Quality Thresholds
    41. 41. 42October, 2010 Model options for hospital/physician alignment PHO PhysiciansHospital z Service Contract to Manage X% X% Co-Management Company - Any profits of PHO are split 50/50 between Hospital and Physician owners Co Management Company Model with PHO Payers
    42. 42. 43October, 2010 Hospital-Physician Shared Service Joint Venture Hospital Cardiology/Orthopedic/ Oncology Group Practice (must be located in same building as turn-key service) Diagnostic/Other Services Supplier (MRI, 256 Slice CT, PET/CT, Linear Accelerator, Gamma Knife) Payors Total services management including facility space, personnel and equipment lease with group practice and hospital Pass-through technical fees as rental payment/ management fee Pass-through technical fees as rental payment/ management fee Hospital bills as service provided “under arrangements” Professional and technical services are billed under group practice’s provider number •LLC would furnish service to hospital commercial patients under arrangements, serve as a turnkey supplier to physician group for Medicare patients. •Supplier would bill hospital and physician group on a FMV, per click basis. •Hospital will bill commercial payors as a service provided “under arrangements”; physician owners CANNOT refer hospital Medicare patients to receive hospital services “under arrangements”. Model Summary
    43. 43. 44October, 2010 Group Practice Joint Venture Hospital Physicians / Physician Group Medical Group Practice (MRI & CT) Payors Hospital and physicians share net income from technical services based on equity interests in the Group Practice Professional and technical services are billed under group practice’s provider number •Hospital buys into Physician Group Practice. •Physician Group Practice acquires space, equipment and personnel necessary to provide MRI, 64 Slice CT services. •Physician Group Practice employs physicians. •Physicians are paid 100% of professional fees as base compensation. •Technical service income is paid to Hospital and Physician owners based upon equity split. Model Summary
    44. 44. 45October, 2010 Integrated Delivery Systems
    45. 45. 46October, 2010 Integrated Delivery Systems in Practice – Pros and Cons Hospital / Health System Physicians$ Practice Assets •Provides greater control of physicians’ practice and referrals •Reduces areas of hospital and physician conflict and competition •Improve patient care and clinical outcomes •Create operational efficiencies and drive high costs out of the health system •Rapidly attract new services and technology to the market •Possible conversion to provider based status •Less fraud and abuse and anti-kickback risk + Pros •Operational costs can be significant •Difficult to include certain specialists in income opportunities from ancillary services •Developing compliant productivity compensation models can be difficult •Hospital is liable for physician malpractice •Physicians may view employment as reducing their autonomy and control of their practice •Possible disadvantages of provider based status (higher co-pays, patient confusion, etc) - Cons
    46. 46. 47October, 2010 Provider Based Clinics: Hospital Outpatient Department Contracting with Physician Parent Hospital Hospital Division Outpatient Dept. Group Practice Division Physician Group Patients / Payors Lease of Practice Assets Professional Services Agreement •“In house” medical foundation. Group Practice Program operated as outpatient department and division of Hospital. •Hospital receives facility fee for outpatient department “clinic” services. Physician fees subject to site of service differential. •Hospital buys or leases practice assets from the Physician Group for its outpatient department. •Term of lease is coincident with term of Professional Services Agreement. •Outpatient Group Practice Division obtains physician coverage through Professional Services Agreement with Physician Group. Hospital does not employ physicians. •Subject to hospital licensing and JCAHO requirements. •Subject to medical staff oversight. Model Summary
    47. 47. 48October, 2010 Hospital Affiliated Group Practice Employing Physicians (Not Provider Based) Parent Hospital Group Practice Patients / Payors Group Practice Program Affiliate Board of Directors Chief Administrative Officer Medical Director Participating Physicians (Clinic Employees) •Group Practice buys or leases practice assets and employs physicians, owns and operates Group Practice Program. •Physicians are paid market (private practice competitive) compensation, usually net income/productivity-based. •Most health systems have structured or restructured their affiliated group practices as tax exempt organizations so that the health systems can provide ongoing funding of the losses that these group practices usually generate •Usually multiple practice sites. Model Summary
    48. 48. 49October, 2010 Medical Foundation: Hospital Affiliated Tax-Exempt Group Practice (Not Provider Based) Parent Hospital Medical Foundation MD, Inc. Patients / Payors Managed Care Agreements Professional Services Agreement Group Practice Program •Structure/Ownership • Affiliate of Hospital • Tax exempt – 501(c)(3) •Function • Operates Group practice • Owns or leases practice sites/equipment • Employs all non-physician personnel • Bills in own name with its provider number •Capital • Significant Medical Foundation •Structure/Ownership • Professional corporation • Wholly owned by physicians • Primary or multi-specialty •Function • Provides physician services to medical foundation pursuant to Professional Service Agreement • Employs individual physicians •Capital • Relatively small MD, Inc.
    49. 49. 50October, 2010 Foundation Model – Key Tenets The Medical Foundation model involves two entities – a medical foundation and one or more contracting medical groups. The Medical Foundation itself would be established as a tax-exempt 501(c)(3) corporation. The medical group (or groups) contracting with the medical foundation should either be a partnership or (preferably) a professional corporation. The Medical Foundation and the medical group are tied together through a Professional Services Agreement (“PSA”) whereby the medical group provides professional services to the medical foundation’s patients. In conjunction with the development of the Medical Foundation, the Foundation could purchase the assets of the medical groups. Fair market value compensation for the acquired assets would be paid to the medical groups.
    50. 50. 51October, 2010 Strengths and Weaknesses of the Foundation Model Strengths • Reduced Success for a Legal Challenge Once Established • Patients and Medical Records Owned by Foundation • Access to Ancillary Income for Ambulatory Services • Managed Care Contracting by Foundation • Beneficial Tax Treatment • Superior Physician Recruitment • Possible practice Asset Acquisition provides Capital to Physicians • Ease of Practice Management Weaknesses • Will take time to establish • Physician Recruitment Success Crucial to Formation • Possibility of Legal Challenge to Physician Recruitment • Required by law to conduct research and education • Other Filing, Legal and Accounting Costs • Governance of Foundation is dictated by state law and, in certain states, the number of physicians directors may be limited.
    51. 51. 52October, 2010 ACO Organizational Design Option Summary
    52. 52. 53October, 2010 Clinical Co-Management Models PHO via Joint Ventures Integrated Delivery System (IDS)¹ 1. Inclusive model for all physicians. 2. Quick to execute; no construction. 3. Strong model for initiating hospital / physician alignment and collaboration. 4. Improved communication between hospital and physicians. 5. Provides “flexibility” to hospital and physicians for future collaborative initiatives. 1. Physicians have improved operating efficiencies with potential increased productivity. 2. True medical management and aligned incentives. 3. Secure physician relationships. 4. Improved capital deployment. 5. Tracks and uses data to manage the delivery system. 6. Step to greater integration between a hospital and its medical staff. 1. Aligns mission and strategic planning. 2. Best model to take full advantage of healthcare trends. 3. Ability to share risks and rewards. 4. Shared enterprise and transparency. 5. Ease of practice management. 6. Less fraud and abuse and anti- kickback risk. 7. More access to capital. 1. May not provide the strategic long term economic solution. 2. Management company has historically been focused at the service line, not towards a more comprehensive scope. 3. Lack of familiarity with the management company concept can create apprehension. 1. Different cultures and management styles result in poor integration and co-operation. 2. The ability to affect provider behavior is rather limited. 3. The partners may not provide enough leadership and support in the early stages. 1. Considerable amount of time and start-up capital. 2. Less physician “skin in the game”. 3. Less physician control. StrengthsWeaknesses Multi-Specialty Possible Yes Yes Level of Consolidation Generally Fragmented Generally Fragmented Consolidated Summary of ACO Organizational Design Options ¹ Includes Medical Foundations, Physician Employment and Academic Medical Centers
    53. 53. 54October, 2010 Infrastructure necessary for ACO implementation Co- Management Models PHO via Joint Ventures Integrated Delivery Systems¹ Joint governance Not likely Likely exists Likely exists Aligned Incentives Likely exists Likely exists Likely exists Shared Risk bonus settlement Possible Likely exists Develop process Management Not Likely Not likely Likely exists Pharmacy/device formal joint relationship Not likely Possible Optional Physician-owned entities Possible Possible Optional Primary Care Practitioner inclusion Possible Possible Likely exists Management of patients out of network Not likely Not likely Likely exists ACO provider contracting & co-ordination Not likely Not likely Develop process Target negotiation and budget tracking Not likely Likely exists Likely exists Strategic planning Not likely Not likely Likely exists Payer contracting process Not likely Likely exists Likely exists Strong care coordination and utilization management Possible Likely exists Likely exists Quality and efficiency metrics analysis Likely Likely exists Likely exists Access to analytical data & claims data Not likely Likely exists Develop process Information Technology platform Not likely Likely exists Likely exists ACO Design Options & Infrastructure Requirements ¹ Includes Medical Foundations, Physician Employment and Academic Medical Centers
    54. 54. 55October, 2010 Challenges to ACO Implementation
    55. 55. 56October, 2010 Critical Success Factors for Implementing an ACO 1. Strong, collaborative physician and management leadership across the organization. 2. A structure for joint decision-making that facilitates physician-hospital alignment. 3. Leadership demonstrating financial acuity to manage the reimbursement transitions towards an ACO. 4. Systems and efficient processes in place to support data exchange and measure quality and cost across the system / continuum. 5. Improved efficiency and efficacy through care management, use of clinical pathways, and dedicated hospital-based teams. 6. An ability for the organization to approach payors as an integrated (if not virtual) system. 7. An organizational culture focused on redesigning clinical care delivery across the system and improving efficiency and quality of care. 8. Compensation that aligns incentives and rewards desired outcomes in quality, costs and efficiency. 9. Large PCP integrated model and elimination of all points in Chronic Care Disease Management where the patient falls between the caregiver gaps and robust medical home model.
    56. 56. 57October, 2010 Barriers for ACO Design & Implementation 1. Overcoming physician cultural barriers that reward a high degree of professional autonomy and individual responsibility; 2. Keep the patient population from obtaining care outside of the ACO (relationship) network; 3. Defining and measuring quality and resource costs for procedures; 4. Determining how quality scores and resource scores will interact to determine bonuses and penalties; and 5. Setting individual ACO’s resource use targets. 6. Integration of physician (non-lay) leadership into all levels of the IDN system and resources and systems to truly manage healthcare delivery risk.
    57. 57. 58October, 2010 ACO Implications & Risks Risks 1. Hospitals need to be part of the change or physicians will take the initiative and view hospitals as commodities. 2. The desire for hospitals to remain in control instead of truly partnering with physicians could limit the success of the ACO. 3.a. Excess capacity of hospitals will increase costs, causing poor performing hospitals to close. 3.b. Physicians that do not meet quality and resource targets could be excluded from the ACO. 4. Care models change before the payments are aligned, leading to negative financial results. Implications 1. ACOs can be led by physicians or by a partnership between hospitals and physicians. 2. As an ACO, hospitals are part of a coordinated team that identifies the best, most appropriate care for the patient. 3. The ACO may not require all of the current hospital capacity or clinicians due to reduced utilization and increased coordination of patient care. 4. Fee-for-service reimbursement will be decreasing, so providers must change how they manage patient health to mitigate financial impacts.
    58. 58. 59October, 2010 What should organizations do now to prepare? 1. Identify a champion in your organization who will take responsibility for leading the change 2. Assess your current situation and the gap to become an ACO. This includes understanding the current care paths patients take, the degree of variation, and key providers and care locations 3. Identify key stakeholders and build a shared need to work together to accomplish the vision. 4. Create or modify a structure that will allow for change. 5. Create or modify the infrastructure to support the new needs. 6. Start with specific patient populations to pilot within the organization. Build on employed / staff physician groups to pilot new care delivery processes. 7. Use Co-Management and a vehicle to align specialists and PCPs around disease specific quality improvement initiatives to align the financial incentives and build a platform for shared governance and management. 8. Use a PHO in combination with a Co-Management to test pilots or demonstrations with commercial, state and institutions to share the risk and benefits of care delivery around populations or specific diseases.
    59. 59. 60October, 2010 ACO Pilots and US Oncology: What are they doing?
    60. 60. 61October, 2010 Questions? © 2010 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. This document is for general informational purposes only and should not be used as a substitute for consultation with professional advisors.
    61. 61. 62October, 2010 Other Possible Slides
    62. 62. 63October, 2010 Definition of an Accountable Care Organization A combination of providers associated with a defined population of patients accountable for total spending and quality of care for that patient population. Bonus for high quality and low cost growth • Bonus is a percentage of FFS payments • High quality is meeting benchmarks (e.g. mortality, readmissions) • Cost growth is the rate of increase in overall Medicare spending per beneficiary assigned to the ACO Possible penalty for low quality and high cost growth
    63. 63. 64October, 2010 Key Elements of an ACO Model Local Accountability • Foster provider accountability for quality and per capita cost for their patient population Standardized Performance Measurement • Increased accountability on the part of providers should be accompanied by improved incentives and information for consumers Payment Reform • Transition payments from rewarding volume/intensity to increasing value • Payments should encourage collaboration and shared responsibility among providers and consistent incentives from payors
    64. 64. 65October, 2010 Goals & Accountability The goal and core of a successful ACO is effective primary care Some of the most important mechanisms for reducing and slowing the growth in specialty and hospital expenditures are prevention, early diagnosis, chronic disease management, and other tools which are delivered through primary care practices in collaboration with specialists and institutions. ACOs are accountable for managing performance, not insurance, risk Although ACOs should accept responsibility for reducing costs, they should not be expected to take on insurance risk, that is, the risk associated with whether the patients who come to them are sick or well. ACOs should manage performance risk; the ability to successfully treat an illness in a cost-effective way.
    65. 65. 66October, 2010 How do ACOs complement Medical Homes and Bundling? Inpatient Care Efficiency Use of Lower- Cost Treatments Adverse Events Preventable Admissions Preventable ER Visits and AdmissionsUnnecessary Testing and Referrals Practice Efficiency Prevention and Early Diagnosis Management of Complex Cases Use of Lower- Cost Settings & Providers Lower Total Healthcar e Costs All Providers BUNDLING MEDICAL HOME ACCOUNTABLE CARE ORGANIZATION Primary Care Specialists Hospitals and Specialists Source: Harold D. Miller, “How to Create Accountable Care Organizations.” Center for Health Care Quality and Payment Reform.
    66. 66. 67October, 2010 Definition of a Medical Home Medical Home is a clinical setting with the capability to improve care coordination and follow evidence-based guidelines; it services as the central resource for a patient’s ongoing care. Medical Homes should have the following capabilities: • Furnish primary care; • Conduct care management; • Use health IT for active clinical decision support; • Have a formal quality improvement program; • Maintain 24-hour patient communication and rapid access; and, • Keep up-to-date records of beneficiaries' advance directives. • Ability of the ACO to monitor patient adherence to chronic disease health status indicators and wellness criteria on a “near real time basis.” Example: remote monitoring.
    67. 67. 68October, 2010 Definition of Bundled Payments Medicare would pay a single provider entity composed of a hospital and its affiliated physicians an amount intended to cover the costs of providing the full range of care needed over the episode. Providers would not only be motivated to contain their own costs but also would have a financial incentive to collaborate with their partners to improve their collective performance. Providers involved in the episode could develop a new ways to allocate this payment among themselves. This flexibility gives providers a greater incentive to work together and to be mindful of the impact their service use has on the overall quality of care, the volume of services provided, and the cost of providing each service.
    68. 68. 69October, 2010 Integrating Care through ACOs Hospitals PCP Group Specialty Group Other Providers Home Health Services Mental Health Facility Other Providers Community Services & Support (e.g. transportation, translation services) Wellness Initiatives (e.g. smoking cessation, nutrition) Health Plans Implementation challenges: •Inability to effectively manage risk •Lack of infrastructure for providing and using reliable and timely cost and quality information to support care management •Lack of collegiality and collaboration among physicians Illustrative ACO Other Providers Outside the ACO
    69. 69. 70October, 2010 Setting ACO Spending Targets To allow providers in all regions to potentially benefit from the ACO model, the financial incentives would need to be based on changes in spending rather than on levels of spending. However, in measuring changes in spending, low-resource-use ACOs could be at a disadvantage as they would have fewer opportunities for efficiency gains. To address this, every ACO could have an allowance for spending growth per capita that is adjusted for area wage rates but not for regional differences in utilization.
    70. 70. 71October, 2010 Setting ACO Spending Targets Spending Targets for ACOs with Different Base Spending Levels National Average Low-use ACO Average ACO High-use ACO Base spending per capita $10,000 $7,000 $10,000 $12,000 Dollar allowance for spending growth $500 $500 $500 $500 Target spending $10,500 $7,500 $10,500 $12,500 Percent increase 5.0% 7.1% 5.0% 4.2% The purpose of the low-use ACO having a higher percentage increase than the national average is to reward the ACO for its historically low resource use The fixed dollar allowance puts the high-use ACO under greater pressure to meet its target through efficiency gains. Reductions at the high-use ACO should be possible given the ACO’s high starting level of resource use.
    71. 71. 72October, 2010 How does the ACO “Shared Savings” Model Work? Initial shared savings derived from spending below benchmarks ACO Launch Projected Spending Spending Benchmark Actual Spending Shared Savings 0 20 40 60 80 100 120 140 1994 1995 1996 1997 1998 1999 2000 2001 Spending Time
    72. 72. 73October, 2010 Potential Bonus and Penalty Criteria for ACOs on a Multi- year Basis Meets Target in All Three Years Mixed Performance on Target Fails Target in All Three Years Meets Target in All Three Years Return withhold and share of savings (bonus) Return withhold Withhold not returned (penalty) Mixed Performance on Target Return withhold Return withhold Withhold not returned (penalty) Fails Target in All Three Years Return withhold Return withhold Withhold not returned (penalty) Quality over Three Years ResourceUseoverThreeYears
    73. 73. 74October, 2010 ACO Organizational Designs ACO configurations will vary reflecting the diversity of local markets. However, several characteristics are essential for all ACOs: 1. Can provide or manage the continuum of care for patients as a real or virtually integrated delivery system. 2. Are of sufficient size to support comprehensive performance measurement and expenditure projections. 3. Are capable of internally distributing shared savings and prospectively planning budgets and resource needs.
    74. 74. 75October, 2010 Evolution of Payment Reform Past and Emerging Models of Accountability in Provider Payments Supporting Better Performance Paying For Better Performance Paying For Higher Value Pay for reporting Payment for reporting on specific measures of care. Data primarily claims-based. Payment for coordination Case management fee based on practice capabilities to support preventive and chronic disease care (e.g., medical home, interoperable HIT capacity). Pay for performance Provider fees tied to one or more objective measures of performance (e.g., guideline based payment, nonpayment for preventable complications). Episode based payments Case payment for a particular procedure or condition(s) based on quality and cost. Shared savings with quality improvement Providers share in savings due to better care coordination and disease management. Partial or full capitation with quality incentives Systems of care assume responsibility for patients across providers and settings over time. Where are we now? Pay for Performance Value-Based Purchasing Bundled/Global Reimbursement Accountable Care Orgs.
    75. 75. 76October, 2010 Quality of Care Drivers The forces:
    76. 76. 77October, 2010 Quality of Care Readmissions: Beginning in FY 2013, the final bill imposes financial penalties on hospitals for so-called “excess” readmissions when compared to “expected” levels of readmissions based on the 30-day readmission measures for acute myocardial infarction (AMI), heart failure (HF) and pneumonia that are currently part of the Medicare pay-for-reporting program. Value-Based Purchasing: The final bill establishes a VBP program for hospital payments beginning in FY 2013 based on hospitals’ performance in 2012 on measures that are part of the hospital quality reporting program. The value-based purchasing program (VBP) will begin to measure hospitals on efficiency, patient satisfaction and the quality of care around five conditions and procedures: 1. Acute myocardial infarction (AMI) 2. Heart failure 3. Pneumonia 4. Surgery-associated infections (SCIP) 5. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Hospital-Acquired Conditions (HACs): Beginning in FY 2015, the final bill adds a 1% penalty to hospitals in the top quartile of rates of HACs, resulting in nationwide reductions of $1.5 billion over 10 years.
    77. 77. 78October, 2010 Quality of Care, Cont’d Key concepts in VBP methodology: • Replaces the current quality reporting program. • Within the Inpatient Prospective Payment System (IPPS) there will be a “withhold” of 1-2% on DRG payments. • Hospitals will “earn” that percentage back based on performance. • Includes both public reporting and financial incentives for better performance as tools to drive improvements in: • Clinical quality; • Patient-centeredness; and, • Efficiency.
    78. 78. 79October, 2010 Map of National Cancer Institute Comprehensive Cancer Centers (NCI CCCs) NCI CCC designation
    79. 79. 80October, 2010 Co-Management Company • HOPD reimbursement rate maintained for OP services delivered on campus. • Quick to execute. No construction. • Potential to increase physician productivity, through improved operational and clinical outcomes. • Provides “Flexibility” to Hospital and Physicians for future collaborative initiatives. • Strong model for initiating Hospital/Physician alignment and collaboration. • Improved communication between Hospital and Physicians. • Creates a mechanism for Physicians to play an active role in managing the service line. • Financial returns from the management company could be realized shortly after launch. • Limited capital investment requirements, limits physicians ‘at-risk’ investment. • No current issues of uncertainty because of regulatory issues (Medicare, IRS, etc…). • Provides access to capital for acquisition of technology, without duplicating resources. • Win/Win for Physicians and Hospital. • Not a passive investment, requires active participation by the physicians. • Lack of familiarity with the management company concept. • Based upon the net revenues and physician interviews, there may not be enough of a monetary return to satisfy the physicians. Pros Cons
    80. 80. The Medicare Shared Savings Program & Accountable Care Organizations (ACOs)
    81. 81. Copyright © 2010 US Oncology, Inc. All rights reserved. 83 Accountable Care Organizations – Concept  Concept to align provider incentives toward integration, quality and efficiency – included in health reform legislation  What is an ACO?  Physician groups  Networks of physician groups  JVs between hospitals/physicians  Hospitals with employed physicians  Integrated delivery systems  Voluntary participation  ACO is to manage and coordinate care of a defined patient population and will share in Medicare savings
    82. 82. Copyright © 2010 US Oncology, Inc. All rights reserved. 84 ACOs – The Legislation  Medicare Shared Savings Program  ACOs (physicians, physician network, hospital/physician JVs) demonstrating quality share in Medicare cost savings  Does NOT require hospital-physician integration  Benchmarks set for expected spending across Parts A and B for ACO patient population, adjusted for expected cost growth  ACO-participating providers continue to be paid on FFS basis  ACOs with per beneficiary spending less than 98% of benchmark would be paid 50% of Medicare savings  House version: option to choose capitation (not in final)  House version: exemption from new SGR-like expenditure targets (not in final)
    83. 83. Copyright © 2010 US Oncology, Inc. All rights reserved. 85 There is no ACO Without Physicians  Common thread  Physicians who manage the care of patients, at least 5,000 Medicare beneficiaries  Physicians  With or without other providers (ie, hospitals, other physicians)  Patient costs attributed to an ACO on the basis of the physician who provides the most primary care services to a patient  Not possible for an ACO to take credit for a patient managed by a non-participant
    84. 84. Copyright © 2010 US Oncology, Inc. All rights reserved. 86 Why Form/Join an ACO?  Opportunity for margin creation in the Medicare book of business  Reimbursement for things that don’t happen like ER visits, hospitalizations, futile EOL interventions  Reimbursement for using lower cost/equally effective regimens  Lessens importance of Medicare’s continued downward pressure on unit payments rates for oncology  Incentives to coordinate your patients’ care across settings  Requires investments in staff and resources otherwise not reimbursed  Potential for referral development through partnerships with referring physicians  Potential future exemption from new SGR-like national expenditure targets, if SGR reform is ever passed
    85. 85. Copyright © 2010 US Oncology, Inc. All rights reserved. 87 There Can Be Oncology-Specific ACOs  While the MSSP does contemplate the formation of ACOs that include hospitals, the Congress also expressly desires the creation of ACOs that are principally composed of physician groups, even specialty physician groups  Congress desires flexibility to test different models for the MSSP so as not to leave any potential efficiency on the table  The legislation offers a broad view of the MSSP and ACO concept in which oncologists could band together to form an oncology-specific ACO without the participation of a hospital or other providers
    86. 86. Copyright © 2010 US Oncology, Inc. All rights reserved. 88 What Ways & Means Says About ACOs
    87. 87. Copyright © 2010 US Oncology, Inc. All rights reserved. 89 ACOs – The Hospital Response Some hospitals are saying:  Physicians must join a strong network to prepare themselves for the new environment  Physicians without strong capital, HIT, research, clinical partners will be lost in the new environment  Hospitals should serve as the core of a local ACO  Physician should join their local hospital through employment agreements or other arrangements to benefits from new funding sources where the hospital is the gatekeeper  Everyone should look like Geisinger, Billings Clinic, Intermountain Healthcare…or else
    88. 88. Copyright © 2010 US Oncology, Inc. All rights reserved. 90 Hospital-Centric ACOs  Hospital line can only be true if the physicians make it so  Physicians hold the card in the discussion if they choose  What to consider before joining a hospital-centric ACO:  Cancer care is very expensive per capita and there are numerous ways to impact those costs  Per capita value to an ACO of an oncologist is far greater than other physicians, even other specialists  Participation in a hospital-centric ACO may dilute value  Bottom line: Know and understand your value
    89. 89. Copyright © 2010 US Oncology, Inc. All rights reserved. 91 ACO Frequently Asked Questions  Do you have to have a hospital partner to provide the full episode of care through an ACO?  No. No version of the ACO policy requires hospital participation.  Are hospital systems that have acquired physicians more viable than physician groups for the development of ACOs?  No but they are equally viable.  Can I participate in more than one ACO?  No, but you may provide care to patients served by an ACO in which you are not a participant.  How is a beneficiary assigned to an ACO?  On the basis on the physician that provided the most primary care services (E&M as a proxy) to the beneficiary during the year.  What happens if I have an expensive outlier case?  It would offset any gains from savings created. Mitigates toward joining a larger ACO to spread outlier risk across a larger pool.
    90. 90. Copyright © 2010 US Oncology, Inc. All rights reserved. 92 ACO Frequently Asked Questions (cont.)  How can we form/participate in the ACO in our market or develop one specific to our group?  A physician group or network of physician groups may form an ACO if it manages care for at least 5,000 Medicare beneficiaries and creates a structure that allows for distribution of performance payments.  Do we have to align with other physicians to develop an ACO?  No but you may choose to do so for a variety of reasons, ACO-specific or not.  Will all of the funds for the care of patients affiliated with an ACO be managed by a hospital?  No. Physicians and other providers participating in an ACO will continue to be paid on a fee-for-service basis. Performance payments accruing to the ACO pursuant to Medicare savings will be distributed through the structure agreed to between the ACO and the participant.  Is ACO participation mandatory?  No. Participation is voluntary.
    91. 91. Questions/ Discussion