ACOs. ACO Definition. ACO Governance. Stuart B Black MD, FAAN Chief of Neurology Co-Director: Neurosciences Baylor University Medical Center at Dallas

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1 Stuart B Black MD, FAAN Chief of Neurology Co-Director: Neurosciences Baylor University Medical Center at Dallas ACOs ACO Definition CMS definition of ACO Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve There are also a large number of privately organized ACOs. While Commercial ACOs are similar to Medicare ACOs, commercial insurers set their own quality metrics with contracts varying from payer to payer Medicare Payment Advisory Commission, Report to the Congress: Assessing Alternatives to the Sustainable Growth Rate System (March 2007). ACO Governance Required Governance Responsibility for oversight and accountable for ACOs activities Must have transparent governing process Fiduciary duty to the ACO Must provide meaningful participation for ACO participants At least 75% must consist of ACO participants Leadership, Management and Operational Requirements Operations Officer: Executive/manager/partner. Does not need to be a physician Clinical Management: Medical Director must be a board-certified physician ACO must serve at least 5000 Medicare beneficiaries ACO must agree to participate for no less than a 3 year period

2 The Driving Forces of The ACO Agenda The sickest 5% of patients drive most of the cost The 15% Rising Risk : Timely effort to prevent worsening 80% of Healthy need prevention and education Value Value = Quality (+Access) Cost High Risk Rising Risk Low Risk ACO Models: An Overview Medicare Shared Saving Program, Pioneer ACO Model, Advance Payment ACO Model Pioneer ACO Model Initiative involves payment models that incorporate utilization risk and requires population management The payment model: Shared savings payment policy; Higher levels of shared savings and risk than MSSP Providers receive standard FFS payments in Years 1&2. If meet all Pioneer ACO requirements in Years 1 &2, Year 3 must transition to population based model Calculations for target per capita expenditure benchmark are complex Requires 50% of payments associated with risk contracting Started with 32 Medicare Pioneer ACOs 9 dropped out in July 2013 Two abandoning the Medicare ACO program altogether 7 converted to MSSP CMS Reports: 13 /32 produced CMS shared savings of $87.6 million in 2012 & $33 M to Medicare Trust Fund Pioneer ACOs earned > $76 M by providing coordinated, quality care Only 2 Pioneer ACOs had shared losses totaling about $4M Major savings were driven by reductions in hospital admissions and readmissions and ED visits ACO Models: An Overview Medicare Shared Savings Program, Pioneer ACO Model, Advance Payment ACO Model Medicare Shared Savings Program (MSSP) Must serve at least 5,000 Medicare beneficiaries Must link quality performance measures and financial performance using coordinated care model 33 measures used to measure clinical quality in MSSP Measures come from 4 domains: Patient/caregiver experience Preventive health Care coordination/patient safety At risk populations Two MSSP Tracks: 1. Track 1: ACO shared savings only arrangement: no penalties if savings are not realized. 2. Track 2: ACO must take risk

3 Population Health Management For PHM to be successful, a provider must be able to track and monitor the health of individual patients. Of the patients who generate the highest costs in a given year, 30% were not in that category a year earlier Define Population Measure Outcomes Integrated EHR Stratify Risks Coordinate Patient and Provider Services Identify Care Gaps Manage Care Five Important Process of PHM ACOs must continually improve these five processes if they are to be successful Process 1 Risk Stratification To Identify patients for interventions and reimbursements Process 2 Care Coordination An Integrated system of care to include home visits and virtual IT visits Process 3 Chronic Condition Management To better manage high risk patients Process 4 Care for the Elderly Care Management focused through the ACO Process 5 Physician Incentives Models/Processes to support goals and income What Entities Could Form an ACO The total number of ACOs in USA estimated at have Government Contracts 210 have Commercial Contracts 74 have both 13 still finalizing their contract process Existing or newly formed organizations may form an ACO ACO Professionals in group practice arrangements Networks of individual practices of ACO professionals Joint ventures/partnerships of hospitals and ACO professionals Hospitals employing ACO professionals Federal Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) Critical Access Hospitals (CAHs) that bill under method 11 Secretarial discretion for other providers and suppliers of services Other Medicare enrolled entities may join the groups above as ACO participants

4 ACOs And Cultural Changes Changes in culture will be necessary if ACOs will be successful Four Domains: Physicians: Must be willing to go from FFS to value based reimbursements focused on quality and cost Must be willing to go from little outside management structure to integrated managed system Must be willing to go from practice autonomy and independence to oversight practice model Must be willing to practice under the rules of Economic Credentialing Hospitals Must restructure from traditional income base of admissions, surgeries and ED visits Must restructure from inflated costs on durable goods to value based purchasing and charges Must restructure to alternative sources of income based on out patient services Will need to buy into the new care delivery system if ACOs are to be successful Narrow networks will restrict choices of physicians Expensive co-pays will limit access to doctors outside the ACO panels May not like receiving medical care within an ACO integrated model Payers Insurers will play different role as ACOs contract directly with organizations and consumers Insurers are forming their own ACOs to compete in this new marketplace Things to Know Before Joining an ACP Make sure you read the contract: Preferably get legal council Do you have ancillary services in your practice (eg. CT, MRI). Will the ACO restrict the use of those ancillary services on ACO patients Know the basic structure and governance of the ACO. Is your specialty represented on any committees or subcommittees Make sure there are no exclusivity clauses Know the mechanism of leaving the ACO Do any specialists, as Neurologists, have a leadership role in the ACO How many physicians of your specialty will be in the ACO and how will referrals be distributed Things to know Before Joining an ACO Are the quality measures applicable to your specialty Must you or your group be exclusive to this particular ACO How will data be shared with all providers including specialists What is the mechanism to refute incorrect data How will the data be used to project the costs for specialty care Will you and/or your group be able to change the way you practice to work within the rules, regulations and guidelines of the ACO How will you being in the ACO affect your patients Non compete clauses differ from state to state and even city to city In certain states like North Dakota, Oklahoma, Montana and California, non compete clauses are unenforceable. If in Dallas, non compete may be 2 years and 25 miles; if in Manhattan, the non compete may be only ½ a mile State law govern restrictive covenants States vary in their interpretation and enforcement of non compete clauses

5 What you need to know before talking to the ACO Key Questions AAN Website AAN.com

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