Volume 2, Number 1
In This Issue
· ACO Model
· General Review of Proposed CMS Rules
Physicians vs Hospitals as Leaders of ACO’s
New England Journal of Medicine Article that gets to the heart of ACO Control, and its implications for ALL MEDICINE
NEJM Article which helps understand the Patient-Centric approach ACO’s must take
A Kaiser News Video introducing the concept of the ACO
In Next Issue
· Review of the Proposed Regulations from the OIG and FTC.
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Accountable Care Organizations?
Florida Accountable Care Services (FACS), a Winter Park, Florida based Company, in conjunction with its’ partner organizations, the Florida Medical Association, the Florida Osteopathic Medical Association, and multiple Independent Physician Associations (IPAs) have spent the last fifteen months researching and developing the Accountable Care Organization platform for physicians.
As one of the programs called for by the Affordable Care Act of 2010, the Accountable Care Organization or ACO for short is an innovative new model for healthcare delivery that shifts the payments and the incentives away from the traditional volumetric approach in which physicians and healthcare providers get paid more by providing more services and admitting patients to the hospital, to a system that rewards physicians and healthcare providers so that they keep their patients in good health and play an active role in their patients well being and overall health. The ACO is a model that gives physicians and healthcare providers a significant financial incentive to eliminate waste, inappropriate admissions and readmissions, duplicative tests, unnecessary procedures, and reduce the overall costs of taking care of patients in addition to meeting certain quality of care measures.
The goals of this new payment delivery system as directed by CMS Administrator Dr. Don Berwick have been described as the Triple Aim, “Improve the experience of care, improve the health of populations, and reduce the per capita costs of healthcare”. In order to achieve these goals physicians and providers must work together to form an Accountable Care Organization that is a truly integrated healthcare delivery system capable of providing coordinated care.
The ACO model represents a dramatic new approach to healthcare in this country. Many individuals and organizations view the changes in healthcare as further impediments by the Government and large players in how physicians treat their patients; how patients will receive care; and how much everything will cost. Meanwhile others view this as the last opportunity for physicians to wrestle back control of the healthcare system; to increase patients’ access to care; to be the driving force behind the increase of quality care received by patients; and resume their place as the rightful stewards of the system.
Florida Accountable Care Services believes in that opportunity. Under the Accountable Care Act of 2010, the Federal government called for the creation of Accountable Care Organizations to meet the Triple Aim Goals of CMS. Since then hundreds of consultants, attorneys, and large hospital systems all across the country have attempted to bemuse, confuse, and corral physicians into their own version of the ACO, without knowing the true breadth and depth of the program. Florida Accountable Care Services (FACS) has followed a different approach, choosing to inform, enlighten, and engage physicians to understand the ACO and other future trends of the healthcare system. This latest communication continues our commitment to educate and inform you of the latest changes.
CMS Proposed Regulations
On March 31st, CMS released its proposed ACO rules and regulations. Several days later the Office of the Inspector General (OIG), the Federal Trade Commission (FTC), and the Internal Revenue Service (IRS) all released their complimentary regulations and rulings helping to outline the program and its specifics. Additionally over the course of the past 2 weeks, CMS has hosted several teleconferences to help explain the proposed regulations and to invite public comment.
The proposed rules have confirmed the overwhelming majority of FACS’s initial conclusions regarding the ACO program and have illuminated a number of other areas. FACS and its Partner Organizations are currently preparing a coordinated response to CMS, OIG, FTC, and the IRS regarding their proposed rules.
*Please remember these rules have only been proposed at this time, and that the federal government is seeking a high degree of public comment and input regarding these proposed rules and regulations and has specifically stated that they will be working with all interested parties to craft the final regulations to be utilized by ACO’s starting January 1st, 2012. *
The ACO Model must be a Patient Centric Organization comprised of designated healthcare professionals, hospitals, or a hybrid of both. They may be Hospital Systems, groups of Independent Physicians, Multi-Specialty Groups, or Joint Ventures with Hospitals. At the minimum all ACO’s must have at least 5000 Medicare Fee for Service Patient Lives that are assigned to a single ACO based on their utilization of a Primary Care provider. As such Primary Care providers may only participate in one ACO whereas specialists may participate in multiple ACO’s, and 50% of those participating Primary Care providers must be on an EMR that complies with the latest “meaningful use” standards as set by the HITECH Act during the first year of the 3 year program.
The ACO must have a specific and identifiable management and leadership structure, which is comprised of at a minimum 75% Healthcare Professionals, 25% Business Professionals, and includes Medicare beneficiaries as part of the governing board.
The CMS ACO program will begin on January 1st, 2012, as a two tiered program in order to help physicians make the most of the opportunity provided. Tier 1 allows ACO’s to operate strictly under the Shared Savings Program with no downside risk involved for the first two years. Upon the beginning of the third year, Tier 1 ACO’s will be expected to take on Partial Risk. Tier 2 ACO’s will immediately begin their three year commitments under Partial Risk. This program was designed to reward physicians, who take risk right out of the gate with a greater portion of the Shared Savings Payments (65% Tier 2), and it allows physicians who have no experience taking risk or operating under a capitated environment the ability to ease their way into the system albeit with a lower portion of the initial Shared Savings Payments coming back to them (52.5% for Tier 1).
Tier 1 ACO’s will begin to receive Shared Savings payments after they have achieved measurable cost containment between 2.0% to 3.9% depending on the number of beneficiaries assigned to each ACO. Tier 2 ACO’s must produce a 2.0 percent cost savings regardless of the number of beneficiaries assigned to their ACO, before they become eligible for Shared Savings Payments. As the rules stand today, all ACO’s during the partial risk portion of their engagement will be subjected to a withhold amount of 25% of the Shared Savings to act as a reserve fund in case of potential losses.
ACO’s will be required to “bend the cost curve” of ever increasing Healthcare Expenditures. The targets and thresholds for each ACO will be determined through the application and analysis procedures between CMS and the individual ACO’s, to help account for regional, demographic, and socioeconomic disparities amongst individual ACO populations across the country. There will however be nationwide thresholds that all ACO’s must traverse before they are eligible for the Shared Savings Payments.
Lowering the costs of care is only one component required to receive the Shared Savings Payment. ACO’s must also meet 5 groups of quality standards which include, “patient care giver experience, care coordination, patient safety, preventive health and at risk population/frail elderly health”. CMS has yet to define the individual metrics associated with each area; however they have stated that 65 total quality measures will be categorized into the 5 groups above, and be scored the same irrespective of ACO Tier level.
All ACO’s will be responsible for the collection of and the continual reporting of robust patient statistics, population health measures, and utilization statistics to CMS. Complimentary to ACO reporting CMS will also share with the ACO’s their robust data collection regarding, financial performance, quality performance scores, aggregate metrics on the assigned beneficiary population, and utilization data back to the ACO’s on a timely basis in order to arm the ACO’s with the information they need to help coordinate their patient’s health. Patients however will have the choice to opt out of the reporting requirement and CMS will not release their individual data. If too many patients opt out of sharing their data, this could pose a significant obstacle in their overall ACO participation. Additionally in order to assist in the transparency and accountability of the program, all ACO’s will be subject to Performance Audits, and their relationship with CMS may be terminated by 1 of 16 different specific grounds set forth by the rules. Some of these include, “avoidance of at-risk beneficiaries, failure to meet quality performance standards, failure to meet reporting requirements, failure to meeting eligibility requirements, noncompliance with other regulatory agencies, etc”.
CMS has reserved the right to change the ACO program at any time after the program has begun, but has pledged not to change the regulations with respect to eligibility requirements and the measurement and calculation of the Shared Savings. Any changes made by CMS will apply after the first performance year.
The CMS Rules as they have been laid out have left the playing field wide open for anyone wishing to pick up the bat, but do make clear that no matter which tier you take, or who you include in your ACO, in order to operate at the level required to clinically integrate to increase quality and to generate noticeable cost savings, and then of course to report and measure those savings and advances in quality- will require a heavy and meaningful use of robust Healthcare Information Technology. ACO participants will need to adopt EMR, PHR, HIE, and utilize a Care Management platform that will help to coordinate patient care and the provision of healthcare.
This short communiqué is only a surface level summation of the ACO Program. Florida Accountable Care Services will be breaking the specific components down on a weekly level to educate and inform you on the details of the ACO Program. We are currently redeveloping our website to provide you with a more robust and centralized source for General ACO Information as well as Florida Specific updates.
Working with our partners, the Florida Medical Association (FMA) and the Florida Osteopathic Medical Association (FOMA), Florida Accountable Care Services has committed to keeping the Physicians of Florida informed and aware, so please forward this and all FACS INFORMED Email updates to your colleagues and join our mailing list while we finalize our new Florida ACO Learning Website.