Ac os

Larry J. Witmer, D.O.

Associate Family Medicine DirectorUH Richmond Medical Center

Family PhysicianUHMP Twinsburg Family Medicine

Accountable Care Organizations

Objectives The Patient Protection and

Affordable Care Act Define Accountable Care Organizations (ACOs) Differentiate ACOs from Payment Reforms Guiding Reform Principles How does an ACO work? Key Features Potential Problems Legal Concerns

The Patient Protection andAffordable Care Act

Section 3022 of the Patient Protection and Affordable CareAct (PPACA) creates the Medicare Shared Savings program, allowingACOs to contract with Medicare by January 2012. According to the PPACA, the Medicare Shared Savings program,

"promotes accountability for a patient population and coordinates itemsand services under part A and B, and encourages investment ininfrastructure and redesigned care processes for high quality andefficient service delivery".


The ACO shall be willing to become accountable for the quality, cost, andoverall care of the Medicare fee-for-service beneficiaries assigned to it

The ACO shall enter into an agreement with the government to participate inthe program for not less than a 3-year period

The ACO shall have a formal legal structure that would allow theorganization to receive and distribute payments for shared savings toparticipating providers of services and suppliers

The ACO shall include primary care ACO professionals that are sufficient forthe number of Medicare fee-for-service beneficiaries assigned to the ACOunder subsection


At a minimum, the ACO shall have at least 5,000 such beneficiaries assignedto it in order to be eligible to participate in the ACO program

The ACO shall provide the government with such information regardingACO professionals participating in the ACO as the government determinesnecessary to support the assignment of Medicare fee-for-service beneficiariesto an ACO, the implementation of quality and other reporting requirementsunder paragraph (3), and the determination of payments for shared savingsunder subsection (d)(2)

The ACO shall have in place a leadership and management structure thatincludes clinical and administrative systems


The ACO shall define processes to promote evidence-based medicine and patientengagement, report on quality and cost measures, and coordinate care, such asthrough the use of telehealth, remote patient monitoring, and other suchenabling technologies

The ACO shall demonstrate to the government that it meets patient-centeredness criteria specified by the government , such as the use of patient andcaregiver assessments or the use of individualized care plans

The ACO participant cannot participate in other Medicare shared savingsprograms

The ACO entity is responsible for distributing savings to participating entities The ACO must have a process for evaluating the health needs of the population

it serves

Accountable Care Organization

Accountable Care OrganizationAn Accountable Care Organization is a type of

payment and delivery reform model that seeksto tie provider reimbursements to qualitymeasures and reductions in the total cost ofcare for an assigned population of patientsA group of coordinated health care

providers form an ACO, and would thenprovide care to a group of patientsTV analogy

Accountable Care Organization

The ACO may use a range of differentpayment models (capitation, fee-for-service with asymmetric or symmetricshared savings, etc.).The ACO is accountable to the patients

and the third-party payer for thequality, appropriateness, and efficiencyof the health care provided.

Accountable Care Organization According to the Centers for Medicare

and Medicaid Services (CMS), an ACO is"an organization of health care providersthat agrees to be accountable for thequality, cost, and overall care of Medicarebeneficiaries who are enrolled in thetraditional fee-for-service program whoare assigned to it.“ Estimate of 78 million Americans on

Medicare in 2030

Accountable Care Organization The phrase ACO is attributed to Dr. Elliot

Fisher of Dartmouth Medical School.Dr. Fisher has led the Dartmouth Atlas Project

— a project that has, for the last 30 years,documented the variation in care across theUnited States.The Dartmouth Atlas has focused on both the

quality of health care as well as its cost.

Increased Cost doesn’t equal better CareMore importantly, they have reported on the

relationship between the two, and their findings arenothing short of an indictment of our currentparadigm Specifically, their findings illustrate that there exists

wide variations in the cost of care across thecountry, and profoundly, that the regions that spendmore per patient do not necessarily obtain betteroutcomes.

Different than Payment Reforms Term ACO “grew out of an exchange between physician colleagues in

which they were trying to determine a proper “locus for sharedaccountability” for a patient’s health care HMO’s and other health insurers are obvious candidates, but as Dr.

Fisher noted, HMOs only comprise a small percentage of the currentmarket, and health plans in general have focused on negotiatingfavorable prices within relatively open networks of providers The “medical home” (also referred to as a Patient Centered Medical

Home) is another candidate, but is taken out of the running by Dr.Fisher because of the untested nature of medical homes, and theirrequirement of new payment mechanisms

Reforming Provider Payment Health care reform for those without insurance Gaps in quality Rising health care costs

Variations in healthcare spending bear little correlation toquality US system doesn’t reward higher-value care Some areas, we spend 3x more on Medicare patients than

others and no quality difference Preventative services underused Proven therapies for chronic disease not used Medical errors and safety concerns (EMRs not mainstream)

Reforming Provider Payment

Promote high-volume and high-intensity careregardless of qualityDoes not support innovative approaches to

coordinating care or preventing avoidablecomplications or services

Guiding Reforming Principles

Local accountability Continuity of care is extremely important and

requires coordination of multiple healthcareprofessionals Healthcare system must facilitate and encourage

coordination Flexibility Variation of strategies based on practice types must

be put in the place which will allow improvementin care

Guiding Reforming PrinciplesValue Payment system needs to be shifted Must reward improved care at lower cost, not volume Encourage collaboration and shared responsibility among providers Consistent set of incentives must be offered to providers ACOs wouldn't do away with fee for service but would create savings

incentives by offering bonuses when providers keep costs down andmeet specific quality benchmarks, focusing on prevention and carefullymanaging patients with chronic diseases. In other words, providerswould get paid more for keeping their patients healthy and out of thehospital.

Guiding Reforming Principles

Transparency Measures of overall quality, cost, and general performance Consumers can make informed decisions with providers and services Consumers’ confidence may increase if they have some say in their

decision-making

Payment reforms already in place Bundled payments Disease management Pay-for-performance

How Does ACO Work?

Establishes a spending benchmark based on expected spending If an ACO can improve quality while slowing spending growth, it receives shared

savings from the payers Greater reimbursement to providers with coordination of services, wellness

programs, using less resources Shared savings is incentive for ACOs to avoid expansion of healthcare capacity

that often drive increased costs Medical Home with PCP as driver of care-lower spending growth, presumably

better care Organizations and providers alike need to be willing to collaborate their care in a

structured framework to allow this to work such as organizations in the city likeUniversity Hospitals and CCF

How Does ACO Work?

Different than HMO in that patient not required to stay in network ACOs aim to replicate "the performance of an HMO" in holding down

the cost of care Avoiding the structural features that give the HMO control over

[patient] referral patterns

ACOs Key Features

Local Accountability collaborations between primary care and

specialty physicians, hospitalist, and nursinghome care (to name a few)

ACOs Key FeaturesShared Savings Specific expenditure benchmarks based on historical trends

and adjusted for patient mix Contingent on meeting designated quality thresholds If you spend less, you receive more Reinvest money saved for medical homes, slow down

healthcare costs Federal health officials predicted that the government would

pay $800 million in such shared savings to providers in thenext three years.

Even after these payments, they said, Medicare would save$510 million, and its savings could be as much as $960 millionover three years.

ACOs Key Features

Performance MeasurementQuality of care provided based on

meaningful outcome and patient experiencedata

ACOs: Laying the Foundationto be Successful

Engagement of key local stakeholdersincluding insurance providers, purchasers,and patientsHistory of successful innovation and reform

with respect to health IT adoption and clinicalinnovations Structural foundation in place at the outset Incentivizing medical students to enter into

primary care 55,000-200,000 primary care shortage by 2020

ACOs: Laying the Foundationto be Successful

Some degree of integration within thehealthcare delivery system includingprimary care and specialists

Agreement and process in place fordistributing shared savings for providers

ACOs: Key Design Components

Organization of the ACO needs to be well-defined Scope of ACO has to include primary care providers as

the gatekeepers Spending and benchmarks must be projected

accurately based on historical data in order to provideconfidence that savings can be achievedDistribution of shared savings must be negotiated and

distributed appropriately

ACOs: What Can Go Wrong?

Hospital mergers and consolidation leavingfewer independent hospitals and physicians

Greater market share can lead to leverage withnegotiations with insurers, ultimately drivinghealthcare costs up again

ACOs: Legal Concerns Concern of antitrust and anti-fraud laws Limit market power the drives up prices and stifles

competition

If an ACO becomes so large, they would employ themajority of providers in a particular region

US Justice Department Antitrust Division promises anexpedited antitrust review process for these newdoctor-hospital partnerships that controlled morethan 50% of the local market

Conclusions ACOs are coming and soon! Reimbursement is going to slide while demands will be

higher Not enough primary care physicians to handle load Cost doesn’t equal care according to studies May decrease autonomy for private and even employed

physicians Pressures to “dot the I’s and cross the T’s” will be higher than

ever

Question 1:What does ACO stand for in this lecture?

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Correct answeris… 1

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1. Accountable Care Organization2. Animal Control Officer3. Academy of Clinical Oncology4. Administrative Compliance Order

Question 2:What are some key features of the ACO?

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1. Local Accountability2. Shared Savings3. Performance Measures4. All of the above

Question 3:What is the official date in which ACOs can

contract with Medicare?

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1. January 20112. January 20123. January 20134. January 2014

Question 4:What is the minimum length of time in which theACO has to maintain its contract with Medicare?

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1. 1 year2. 2 years3. 3 years4. 4 years

References "Medicare "Accountable Care Organizations" Shared Savings Program - New Section 1899 of Title

XVIII, Preliminary Questions & Answers". Centers for Medicare and Medicaid Services. RetrievedJanuary 10, 2010.

http://www.healthreformwatch.com/2010/03/11/a-guide-to-accountable-care-organizations-and-their-role-in-the-senates-health-reform-bill/

Fisher ES, Shortell SM (2010). "Accountable Care Organizations: Accountable for What, to Whom,and How". JAMA 304 (15): 1715–1716. doi:10.1001/jama.2010.1513. PMID 20959584.

Gold, Jenny (Jan 18, 2011). “Accountable Care Organizations, Explained”. Kaiser Health News:http://www.npr.org/2011/04/01/132937232/accountable-care-organizations-explained.

Pear, Robert (March 31, 2011). “Standards Set for Joint Ventures to Improve Health Care”. NYTimes: http://www.nytimes.com/2011/04/01/health/policy/01health.html

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