Pioneer ACO Model: Overview

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1 Center for Medicare and Medicaid Services Pioneer ACO Model: Overview AAMC Teleconference June 8, 2011 Karen Fisher, J.D. Jane Eilbacher Will Dardani

2 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 2

3 CMS Objective for Pioneer ACOs To design ACO program for more advanced systems The Pioneer ACO will complement the MSSP ACO and inform MSSP ACO development 3

4 Timeline/Key Dates Notice of Request for Applications (RFA): Released May 17 Letter of Intent (and Data Use Agreement): Due June 30 to Pioneer ACO Model Application: Postmarked on or before August 19 CMS will only consider applications from organizations that have submitted letters of intent Interview of Semi-Finalists: 1-2 months after application deadline Program Tentative Start: 3 rd or 4 th quarter of 2011 (CMS says it will provide comfortable interval ) 4

5 Key Features of Pioneer ACO (compared to MSSP ACO) Participation period of up to 5 years Higher risk, higher reward More beneficiaries Can select prospective beneficiary attribution Specialist involvement in attribution process Other payer involvement: in either year 2 or year 3 majority of all ACO revenue must come from outcomes-based contracts (RFA is unclear) Note: DGME excluded from payment calculations, but IME, DSH, and all other claims-based payments are included 5

6 More on Pioneer ACOs Program to be administered by the CMS Center for Medicare and Medicaid Innovation (CMMI) Agreement Period: 3 years, with CMS to use its discretion to extend for 2 additional years Organizations may participate in a Medicare Shared Savings Program ACO (MSSP ACO) or a Pioneer ACO CMMI expects to partner with 30 Pioneer ACOs, but could be more Flexibility: CMS appears willing to work with individual ACOs and is open to ACO suggestions Pioneer ACOs have a minimum shared savings/loss rate of 1% and will share in first dollar savings Note: Pioneer ACOs that do not require FTC/DOJ review will be given priority in the application process 6

7 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 7

8 Beneficiary Attribution Pioneer ACOs must have a minimum of 15,000 assigned beneficiaries (5,000 for rural Pioneer ACOs) MSSP ACO: minimum of 5,000 beneficiaries Pioneer ACOs can elect either prospective or retrospective beneficiary assignment MSSP ACO: retrospective assignment For prospective attribution, CMS will identify Pioneer ACO s population through analysis of prior 3 years fee-for-service claims with the most recent year weighted most heavily (60%, 30%, 10%) 8

9 Hybrid Attribution Model: Primary Care and Specialty Beneficiaries will first be aligned with the group of primary care providers (same as MSSP, but including NPs and PAs) who billed for the plurality of primary care allowed charges during combined 3 year period If a beneficiary had less than 10% of E&M allowed charges billed by primary care physicians (in or out of the ACO), alignment will be with the group of eligible specialists who billed for the plurality of allowed charges Eligible specialties: nephrology, oncology, rheumatology, endocrinology, pulmonology, neurology, and cardiology 9

10 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 10

11 Payment Methodology Multiple payment arrangements: o Core Payment Arrangement as set forth in RFA Core Arrangement, Core Option A, and Core Option B o Alternative Payment Arrangements: CMS encourages applicant Pioneer ACOs to propose alternative payment models CMS will use these suggestions to develop the Alternative Payment Arrangement(s) which Pioneer ACOs can select 11

12 Core Payment Arrangement Core Arrangement OR Performance Period 1 Performance Period 2 Performance Periods 3, 4, 5 Up to 60% shared savings and shared losses Up to 70% shared savings and shared losses Population-based payment, with up to 70% shared savings and shared losses 10% maximum 15% maximum 15% maximum Core Option A Up to 50% shared savings and shared losses Up to 60% shared savings and shared losses Same as Core Arrangement 5% maximum 10% maximum Core Option B Up to 70% shared savings and shared losses Up to 75% shared savings and shared losses Population-based, up to 75% shared savings and shared losses Source: RFA p % maximum 15% maximum 15% maximum 12

13 Expenditure Benchmark Based on weighted prior 3 year average of actual expenditures for each of ACO s aligned beneficiaries, most recent year weighted most heavily (60%, 30%, 10%) This baseline will be increased by average percentage growth rate (50%), and absolute dollar equivalent of growth rate (50%) for a national reference population ( matched cohort ) o The national reference population will have beneficiary characteristics are similar to the Pioneer ACO s population o It will be adjusted for age, sex, and potentially other characteristics 13

14 Performance Periods 3 through 5 If ACO generates a minimum annual average savings over years 1 and 2 (which will vary based on whether ACO is in a high or low cost state): o Payment will transition to population-based payment in year 3 ACO providers will receive 50% of FFS payment on submitted claims; the remainder will be provided to the ACO as per-beneficiary-per-month payment based on projections 14

15 Participation of Other Purchasers Pioneer ACOs must commit to entering outcomesbased contracts with other purchasers (private health plans, state Medicaid agencies, and/or self-insured employers) such that the majority of the ACO s total revenues (including from Medicare) will be derived from such arrangements, by the end of the second performance period in December RFA p.13 Outcomes-based contracts: include financial accountability, evaluate patient experience of care, and include substantial quality performance incentives 15

16 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 16

17 Quality Provisions Performance measures and quality incentive calculations will be the same as in MSSP ACO final rule Pioneer ACOs may with withdraw from the program if they find the MSSP ACO final rule quality requirements unacceptable 17

18 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 18

19 Data Sharing Similar to MSSP but trying to provide more, and more quickly o Offering flexibility, CMS will produce additional reports based on Pioneer ACO s input Similar to MSSP, beneficiaries may opt out of having their identifiable data shared with the Pioneer ACO o At the beginning of each year, CMS and the Pioneer ACO must notify beneficiaries regarding data sharing and allow for opt-out 19

20 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 20

21 Governance Requirements Governing body must include meaningful representation from consumer advocates and patients Exception to consumer advocate/patient requirement: extenuating circumstances, such as existing legal restrictions 21

22 Agenda for Today s Call Overview Beneficiary Attribution Payment Methodology Quality Data Sharing Governance Application Scoring 22

23 Application Scoring Domains Experience with risk sharing and outcomes-based contracts Performance capabilities Potential for meeting triple aim Leadership & management Patient Centeredness Selection Factors (Examples) % of patient revenues in risk sharing arrangements and outcomes based contracts Degree of financial risk in applicant s 2 largest contracts as % of ACO s revenues Applicant s financial stability Primary care capability HIT Infrastructure on provider and pop. level Strength of community relationships Proposed care improvement plan Potential for cost savings, quality improvement Strength of executive credentials Leadership commitment Managerial and staff resources Ensuring patient access, care transitions Patient engagement and activation Maximum Score Vulnerable populations Serve dually-eligible beneficiaries Collaboration with diverse group of providers (i.e. safety net, behavioral and mental health 5 Total Points

24 Timeline/Key Dates 24 Notice of Request for Applications (RFA): Released May 17 Letter of Intent (and Data Use Agreement): Due June 30 to Pioneer ACO Model Application: Postmarked on or before August 19 CMS will only consider applications from organizations that have submitted letters of intent Interview of Semi-Finalists: 1-2 months after application deadline Program Tentative Start: 3 rd or 4 th quarter of 2011 (CMS says it will provide comfortable interval between acceptance into program and program start date)

25 Questions? CMS is encouraging stakeholders to questions to: CMMI Pioneer ACO Website: 25

CMS/CMMI Pioneer ACO Model AAMC Contacts: Karen Fisher, J.D. Jane Eilbacher 202-862-6140 202-828-0896 kfisher@aamc.org jeilbacher@aamc.

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