The Accountable Care Organization

Transcription

1 The Accountable Care Organization Kim Harvey Looney

2 ACOs: Will I Know One When I See One? Relatively New Concept Derived from Various Demonstration Programs No Set Structure ACO is a Goal, not Necessarily a Mechanism 2

3 Physician Group Practice (PGP) Demonstration Project Initiated by CMS in April 2005 Offered 10 large practices opportunity to earn performance payments for improving the quality and cost-efficiency of health care delivered to Medicare fee-for-service beneficiaries 3

4 PGP Demonstration Program Billings Clinic: Billings, MT Dartmouth-Hitchcock Clinic: Bedford, NH The Everett Clinic: Everett, WA Forsyth Medical Group: Winston-Salem, NC Geisinger Health System: Danville, PA Marshfield Clinic: Marshfield, WI Middlesex Health System: Middletown, CT Park Nicollet Health Services: St. Louis Park, MN St. John s Health System: Springfield, MO University of Michigan Faculty Group Practice: Ann Arbor, MI 4

5 PGP Demonstration Results All physician groups improved clinical management of patients Some physician groups saved CMS money and shared in savings Year 3: 5 groups shared in 25.3 M savings for achieving 2% per year reductions in spending growth below control populations Program provided initial insight into ability of physicians to manage a population of patients (FFS) 5

6 Healthcare Reform: Patient Protection and Affordable Care Act Shift in the reimbursement system from traditional FFS payment toward a more riskbased approach to payment or accountable payment. Create incentives for providers to become more coordinated, more integrated, more reliable, lower cost, and more focused on treating chronic disease in a sustainable way. No more the more care you provide, the more money you make and hospitals will need to work to keep people out of the hospital 6

7 What Are ACOs? Entity willing to become accountable for the quality, cost, and overall care of Medicare FFS beneficiaries assigned to it Expected to meet specific organizational and quality performance standards (still to be determined) If standards met, eligible to receive cost sharing 7

8 ACA: Who Can Be an ACO? Physicians in group practice arrangements Networks of individual practices of physicians Partnerships or joint venture arrangements between hospitals and physicians Hospitals and their employed physicians Such other groups of providers of services and suppliers as the Secretary determines appropriate 8

9 Accountable Care Organizations Providers continue to submit individual claims and be paid separately. If targets are met, the ACO receives back-end percentage of the shared savings which are shared across providers. a percent (as determined appropriate by the Secretary) of the difference between such estimated average per capita Medicare expenditures in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by the program under this title. The Secretary shall establish limits on the total amount of shared savings that may be paid to an ACO under this paragraph. H.R. 3590: Patient Protection and Affordable Care Act 9

10 Accountable Care Organizations Division of savings between ACO and Medicare is unspecified ACO organizations responsible for determining how savings split among themselves Secretary authorized, but not required, to use other payment models Partial capitation arrangement under which highly integrated care systems assume full financial risk in return for fixed monthly payment per beneficiary Risk corridors ACOs potential for profit or loss is limited 10

11 Accountable Care Organizations Must establish a mechanism for shared governance and formal legal structure to receive and distribute payments for shared savings Prohibited from taking steps to avoid patients at risk in order to reduce likelihood of increasing costs to ACO Secretary may impose sanctions on ACO that tries to avoid such patients, up to and including termination from Medicare program 11

12 ACO in Healthcare Reform Legislation ACOs will be eligible to receive a percentage of the cost savings that they have realized under the traditional feefor-service Medicare system ACO shall enter into a three-year agreement with HHS whereby the ACO must agree to contain at least 5,000 Medicare beneficiaries, while being prevented from engaging in risk selection ACO must define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth or other remote patient monitoring tools ACO must also demonstrate to HHS that it meets defined criteria for patient-centered care 12

13 It s Going to Be All about Quality ACOs need to have the ability to capture and report data, at the group and individual provider level, relating to measures necessary to evaluate the quality of care furnished ACOs will be expected to meet third party (e.g. Medicare) performance standards measuring the quality of care furnished The bar will not be static ACOs will be expected to improve the quality of care furnished over time by meeting ever increasing standards for purposes of assessing quality of care To earn incentive payment, the ACO will be expected to meet certain quality thresholds 13

14 Potential Issues with ACOs Anti-Kickback Statute and CMP Law Requirement of hospitals, physicians and other providers to accept one payment for services and share financial incentives could be in violation of previous interpretations Antitrust consequences Uncertainty may deter precompetitive, innovative arrangements Nonprofit hospitals Determine whether involvement with for-profit physician practices complies with IRS guidelines for nonprofit institutions 14

15 Center for Medicare and Medicaid Innovation New entity within CMS established by ACA Has authority to test proposed methods of coordinated care delivery such as ACOs 15

16 Center for Medicare and Medicaid Innovation To test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals Preference to be given to models that also improve the coordination, quality, and efficiency of healthcare services The CMI shall consult representatives of relevant Federal agencies, and clinical and analytical experts with expertise in medicine and health care management Use open door forums or other mechanisms to seek input from interested parties Select models to be tested from models where the Secretary determines that there is evidence that the model addresses a defined population for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures 16

17 Challenges for ACOs Critical mass of provider participation Critical mass of payor participation Adequate financing for ACO start-up costs: IT, analytic capabilities, clinical support infrastructure, time and effort Technical issues patient assignment algorithm, performance measures and budgeting methodology Changing provider culture and patient behavior Medicare: No enrollment, no lock-in, no change in benefits Modest financial incentives (at least with Level I shared savings) 17

18 Notice of Proposed Rulemaking Draft regulation for shared savings program for ACOs in the fall of 2010 (December or January) CMS currently soliciting input from providers, patient advocacy groups and other stakeholders Written comments or statements may be sent via e- mail to: or sent via regular mail to: Attn: ACO Legal Issues, Mail Stop C , Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD

19 Systems Implementing ACOs Kaiser Permanente: integrated model, 35 hospitals employ 14,000 physicians, thereby removing incentives for providers to over-utilize care, Kaiser has also improved clinical outcomes for chronic disease patients under coordinated care model Geisinger Health System: Charges flat rate for coronary bypass procedures, which has reduced readmission rates and cost of care Baylor Health Care System: Converting 13 of its 26 hospitals to an ACO model by 2015 Montefiore: 2,500 salaried physicians, including 500 communitybased primary care to provide unified system of care. Enrolled 150,000 members under its own HMO. Flat annual fee. Extensive EHR system. Piedmont: Piedmont Physicians Group and Cigna launch an ACO pilot program in Atlanta for better care coordination in September

20 Secretary of HHS Required to establish shared savings program specifically relating to ACOs no later than January 1, 2012 Final authority over: Establishment of quality performance standards and assessment of ACO s performance Assignment of Medicare fee-for-service beneficiaries to ACO Determination of whether ACO eligible for shared savings and amount of shared savings

21 BUT, ACA does: Permit Secretary of HHS to waive requirements of Anti-kickback Statute, Stark and CMP laws as necessary to administer ACOs 21

22 You ve Got a Friend in Me 22 22

23 FTC Chairman Jon Leibowitz FTC will consider New Safe Harbors for ACO Arrangements FTC will consider establishing Expedited Review Process 23 23

24 HHS Inspector General Daniel Levinson Fraud and abuse laws should not stand in the way of provider innovation to improve quality and reduce costs OIG looking closely at how HHS Secretary can effectively use the waiver authority to develop new safe harbors and regulatory exception to facilitate ACO development 24 24

25 CMS Administrator Don Berwick ACO Goals Improving individual patient care Improving the health of communities Lowering the cost of healthcare services without any diminution in quality 25

26 Comparison of Payment Reform Models (The Dartmouth Brookings Accountable Care Organization Learning Network) ACOs Medical Home Bundled Payments 26

27 Comparison of Payment Reform Models (The Dartmouth Brookings Accountable Care Organization Learning Network) ACOs Medical Home Bundled Payments 27

28 NCQA Draft ACO Criteria Whether the criteria should specify the types of specialists that should be included in the ACO and, if so, whether the specialists must be part of the organization s legal structure. The capabilities that should be expected for each of the four proposed ACO levels. Whether the eligibility criteria proposed by NCQA capture the organization types that have the capability to act as ACOs. Whether the criteria align with stakeholder expectations for ACOs and whether the criteria fails to address areas that should be included. Whether organizations seeking to become ACOs will be able to demonstrate compliance with the criteria, and, if not, which areas of the criteria will be most challenging. Whether there are critical functions not included in the current draft standards. Note: Deadline for comments November

29 Some say accountable care organizations are like unicorns they want to believe in them, but they ve never seen one. 29

30 Others say ACOs do exist and they know this because they have seen them in California. 54% of insured population in California covered by ACO-like arrangements. Modern Healthcare Cover Story, November 1,

31 ACO Lessons Learned in California Structure is important, but at least as important as structure is an organization s capabilities, culture, and infrastructure, as well as the alignment of goals between the organization and its individual physicians. Alignment of incentives between physician organizations and hospitals offer important opportunities for performance improvements across the entire continuum of care. Capitation can be effective, but payment methods should vary depending on ACO s ability to assume risk. Note: Fee for service payment with shared savings has not been successful for efficient delivery of care. Health plans working together on payment methods and performance measures helped facilitate growth of ACOs in California. 31

32 ACO Lessons Learned in California ACOs are not the be all/end all for healthcare spending control. ACOs must be agnostic to insurance type. Difficult to balance patient choice with the desire to decrease costs and effectively coordinate care. Regulation of the financial solvency of provider organizations is important to ensure market stability. Consumer protections from capitated provider organizations need to be balanced, not overburdening. Establish ACOs in geographic areas with identifiable social and economic challenges. 32