Accountable Care Organizations and Patient-Centered Medical Homes

Emerging Topics in Healthcare Reform Accountable Care Organizations and Patient-Centered Medical Homes Janssen Pharmaceuticals, Inc.

Accountable Care Organizations and Patient-Centered Medical Homes The Patient Protection and Affordable Care Act (ACA) encourages greater coordination of care among primary care physicians, specialists, and hospitals. Two related care models gaining popularity accountable care organizations (ACOs) and patient-centered medical homes (PCMHs) are designed to reduce costs by minimizing treatment fragmentation, avoiding hospital readmissions, and encouraging smooth transitions of care. 1,2 Medicare payment reforms compel hospitals to improve quality of care. In that sense, hospitals, ACOs, and PCMHs all share incentives to enable one another s success. Accountable care organizations An ACO is a network of physicians and hospitals that share responsibility for providing high-quality, efficient care to a defined population. 3 Medicare-approved ACOs agree to manage the healthcare needs of 5000 or more beneficiaries for 3 years. 3 In integrated markets, hospitals have formed ACOs 4 ; in other areas, physicians in large group practices form the ACOs and contract with hospitals. 5 Importance of care coordination to ACOs An ACO develops its own standards to ensure that patient care consistently meets best practices. 1 Hospitals and health systems that form ACOs will not only seek shared savings, but also have additional incentives to reduce readmissions 6 and meet Centers for Medicare and Medicaid Services (CMS) standards for value-based purchasing. 7 This heightens the importance of coordinating the care of patients as they move from one setting to another. How ACOs are paid ACOs are paid on a fee-for-service basis, but they receive bonus payments for keeping costs down. 8 These shared savings bonuses are based on an ACO s performance on 33 quality measures that CMS has determined can reduce Medicare spending. 8,9 ACOs are exempt from Medicare s Value-Based Payment Modifier (VBPM) program. 10 Patient-centered medical homes A PCMH is typically a primary care driven affiliation of healthcare providers. Each patient s care is coordinated by a primary care physician who leads a team of specialists, pharmacists, and institutions. 11 Medicare s VBPM program is separate from PCMHs, but physicians who participate in a PCMH and who also enroll in a VBPM may benefit from CMS s reports on quality measures. VBPM offers incentive payments to physicians who meet quality-performance standards. 12 VBPM is being phased in between now and fiscal year 2017. How ACOs and PCMHs differ Whereas an ACO is responsible for the care of a population, a PCMH focuses on the individual patient. A PCMH emphasizes care coordination among providers as a patient moves through sites of service. 13 Multiple Medicare demonstration projects are testing PCMH reimbursement structures to determine the most cost-efficient ways to provide coordinated, high-quality care. 14 In the private sector, several PCMH models have demonstrated cost savings through reductions in emergency room use and hospitalizations. 1 How hospitals and PCMHs interact CMS payment incentives should motivate hospitals to work with PCMHs to prevent readmissions. Coordination between a hospital and a PCMH can reduce drug errors and other pitfalls of care transition that can lead to rehospitalization. 15 Think of ACOs and PCMHs as an extended hospital medical staff organization whose goals are aligned with those of the hospital 2 3

ACOs, PCMHs, and the Role of Drug Therapy ACOs and PCMHs have financial incentives to reduce unnecessary ER utilization and readmissions. Their ability to achieve this depends on several factors unique to each model, but both models have 3 success factors in common and each is relevant to drug therapy. ACO and PCMH success factors Formularies and ACOs For ACOs formed around institutional entities like a hospital or an integrated delivery system (IDS), it is critical to manage transitions of care through clear communication between the hospital and postacute providers. A hospital or IDS will have its own formularies and protocols in place intended to influence physician behavior. 16 Ensuring that outpatient providers in the network adhere to these protocols increases the likelihood that patients receive consistent treatment as they move from one site of care to another. During care transitions, a patient s drug regimen might be changed. Studies show that about a quarter of patients discharged from hospitals experience an adverse event within 30 days. Most of these events are drug-related, many are preventable, and about 20% result in ER visits or readmissions. 15 In small and midsize ACOs whose governance is not dominated by a large hospital or IDS, physicians will be motivated to construct formularies that emphasize best practices with demonstrated proven outcomes. Shared savings are based on cost reductions in Medicare Part A and Part B, so these ACOs will seek population-specific data on outcomes for self-administered medications. 16 Pharmacists play an important role in these ACOs. With their experience in coordinating medication therapy with physicians, nurses, and case managers, pharmacists can help ACOs with the selection of appropriate therapies for formularies. 8 Formularies and PCMHs The PCMH will also have a formulary. To maximize the success of a PCMH, formularies should be focused on outcomes rather than financial incentives. With this focus on evidence-based drug therapy, a PCMH formulary decision maker will need information that is applicable to individual patients, such as patient-specific outcomes, contraindications, and pharmacogenomic data. 17 Developing an evidence-based formulary is in keeping with the PCMH mission of coordinating care among primary care physicians, specialists, care managers, and caregivers; providing high-quality care; and reducing unnecessary hospital utilization. 4 5

Information: the Foundation of Success for ACOs and PCMHs When considering anticoagulation therapies, ACO and PCMH formulary committees face many considerations, including a product s efficacy, safety, and ability to foster successful transitions of care. 18 Novel oral anticoagulants offer potential ease-of-management and dosing advantages over warfarin, as well as the ability to tailor therapy to a patient s specific needs and abilities to follow a therapeutic regimen. 19 After a new anticoagulant is added to a formulary, its status will be reviewed regularly. An ACO or PCMH pharmacy and therapeutics committee and its subcommittees will seek periodic updates on the anticoagulant s ability to improve outcomes and quality of care within their population. 18 Many of the quality measures that ACOs must meet including reporting outcomes from the use of antithrombotics in patients with ischemic vascular disease 9 rely on the ability to track real-world outcomes through electronic medical records. 8 Similarly, PCMHs rely on health information technology applications to manage outcomes and transitions of care in real time. 15 A collaborative approach Given their need for information that enables optimal management of their populations, ACOs and PCMHs can build partnerships with drug manufacturers to focus on meeting quality-improvement goals. If you are a hospital or an IDS, talk with your Janssen representative about evidence-based guidelines, adherence and compliance programs, and tools for case managers that ensure consistency of care throughout the network. If you are an independent practice association or a multigroup specialty ACO, talk with your Janssen representative about matching anticoagulation therapies with specific populations. Your representative can discuss medication outcomes for specific patient populations. If you are a PCMH, consider where the literature gives clear evidence to recommend specific anticoagulation therapies. Your Janssen representative can supply outcomes data to inform your coordination-of-care protocols for specific populations. Let Janssen Partner With You Your Janssen representative can offer support tools to help ACO and PCMH providers, case managers, and hospitals provide high-quality care, ensure smooth transitions across care settings, and help patients understand their self-care. Ask your representative for: Resources for PCMHs and case managers: Care-coordination flow charts Information on managing transitions of care and helping patients stay adherent to therapy Postoperative follow-up care brochures Resources for ACOs and hospital discharge planners: Fact sheets on assessing and managing disease risk and postdischarge complications Clinical practice guidelines Resources for patients: Materials explaining postoperative follow-up and care Patient self-care is an important part of ensuring positive outcomes. Sometimes, patients need help understanding their medications, managing side effects, and sticking to a medication regimen. CarePath by Janssen can help patients by providing: Product information Medication reminders Access and reimbursement assistance programs Means for providing feedback to physicians Tips on recovery and rehabilitation Visit JanssenCareCoordination.com and CarePathbyJanssen.com for more information 6 7

References 1. Longworth DL. Accountable care organizations, the patient-centered medical home, and healthcare reform: what does it all mean? Cleve Clin J Med. 2011;78:571 582. 2. Department of Health and Human Services. More Doctors, Hospitals Partner to Coordinate Care for People with Medicare. http://www.hhs.gov/news/press/2013pres/01/20130110a.html. Published January 10, 2013. Accessed January 15, 2013. 3. Department of Health and Human Services. Summary of Final Rule Provisions for Accountable Care Organizations Under the Medicare Shared Savings Program. http://www.cms.gov/medicare/medicare-fee-for-service-payment/sharedsavingsprogram/ Downloads/ACO_Summary_Factsheet_ICN907404.pdf. Published November 2012. Accessed January 31, 2013. 4. Centers for Medicare and Medicaid Services. CMS Names 88 New Medicare Shared Savings Accountable Care Organizations. July 9, 2012. http://www.cms.gov/apps/media/press/factsheet.asp?counter=4405&intnumperpage=10&checkdate=&checkkey= &srchtype=1&numdays=3500&srchopt=0&srchdata=&keywordtype=all&chknewstype=6&intpage=&showall=&pyear=&year= &desc=&cboorder=date. Accessed March 31, 2013. 5. Gold J. ACO is the hottest three-letter word in healthcare. Kaiser Health News website. http://www.kaiserhealthnews.org/stories/ 2011/January/13/ACO-accountable-care-organization-FAQ.aspx?p=1. Published October 21, 2011. Accessed January 15, 2013. 6. Centers for Medicare and Medicaid Services. Readmissions Reduction Program. http://www.cms.gov/medicare/medicare-fee-for- Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program.html. Updated August 1, 2012. Accessed January 15, 2013. 7. Centers for Medicare and Medicaid Services. Frequently Asked Questions Hospital Value-Based Purchasing Program. http://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/hospital-value-based-purchasing/downloads/fy-2013- Program-Frequently-Asked-Questions-about-Hospital-VBP-3-9-12.pdf. Updated March 9, 2012. Accessed January 15, 2013. 8. Yeung W, Burns H III, Loiacono D. Are ACOs the answer to high-value healthcare? Am Health Drug Benefits. 2011;4(7):441 450. 9. Accountable Care Organization 2012 Program Analysis. Quality Performance Standards Narrative Measure Specifications Final Report. Centers for Medicare and Medicaid Services website. http://www.cms.gov/medicare/medicare-fee-for-service-payment/ sharedsavingsprogram/downloads/aco_qualitymeasures.pdf. Published December 12, 2011. Accessed January 15, 2013. 10. Centers for Medicare and Medicaid Services. Physician Value-Based Payment Modifier under the Medicare Physician Fee Schedule 2013 Final Rule. http://www.cms.gov/outreach-and-education/outreach/npc/downloads/presentation-qrur-112012.pdf. Accessed April 29, 2013. 11. National Committee for Quality Assurance. NCQA Patient-Centered Medical Home website. http://www.ncqa.org/portals/0/ PCMH2011%20withCAHPSInsert.pdf. Accessed Feburary 1, 2013. 12. Centers for Medicare and Medicaid Services. Medicare FFS Physician Feedback Program/Value Based Payment Modifier Background. http://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeedbackprogram/background.html. Accessed April 29, 2013. 13. Meyers D, Peikes D, Genevro J, et al. The Roles of Patient-Centered Medical Homes and Accountable Care Organizations in Coordinating Patient Care. AHRQ Publication No. 11-M005-EF. Rockville, MD: Agency for Healthcare Research and Quality. December 2010. 14. Patient-Centered Primary Care Collaborative Payment Reform Task Force. Payment Reform to Support High-Performing Practice. Medscape.com website. http://www.medscape.com/viewarticle/730872_print. Published October 26, 2010. Accessed January 15, 2013. 15. Smith MA, Nigro SC. The Patient-Centered Medical Home. In: Science and Practice of Pharmacotherapy I and II PSAP-VII, Book 8. American College of Clinical Pharmacy; 2011:87-101. 16. Cherry M, Pankey-Dooley B. Pharma has free ride with Medicare ACOs, but for how long? HealthLeaders InterStudy website. http://hl-isy.com/healthcare-reform-blog/august-2012/acos-pharmacy-benefit-medicare-080112. Published August 8, 2012. Accessed January 15, 2013. 17. Academy of Managed Care Pharmacy. The Patient-Centered Medical Home. How Does Managed Care Pharmacy Add Value? http://amcp.org/workarea/downloadasset.aspx?id=10704. Accessed January 15, 2013. 18. Merli GJ. The new oral anticoagulants: a challenge for hospital formularies. Hosp Pract. 2012;40(3):126 128. 19. Eikelboom JW, Weitz JI. New anticoagulants. Circulation. 2010;121:1523 1532. Janssen Pharmaceuticals, Inc. 2013 May 2013 K02X13106B Janssen Pharmaceuticals, Inc.