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ACO Roundtable | On ACO Watch: A Mid-Week Review

On Friday April 1st, 2011 (yes, ‘April Fools day’) at 4PM Eastern and 1PM Pacific ACO Watch: A Mid Week Review will host a special roundtable series on the ‘hot of the press’ Notice of Proposed Rule pertaining to the implementation of Accountable Care Organizations. For the published rule, click here.

Our roundtable team will consist of Mark Browne, MD, PYA, aka @consultdoc, Vince Kuraitis, Better Health Technologies, LLC, e-Care Management blog, aka @VinceKuraitis, and David Harlow, the Harlow Group, LLC, aka @healthblawg, with yours truly Gregg Masters, aka @2healthguru, as moderator and host.

To listen live, or via archived replay, click here. During the broadcast you may also listen in via (619) 393-2836, and even participate in the chatroom.

They’re Here!

After 6 or so months of waiting for guidance on the implementation of Accountable Care Organizations (ACOs), the Centers for Medicare and Medicaid Services finally released the first round of the ‘notice of proposed rule making’ via:

Centers for Medicare & Medicaid Services | 42 CFR Part 425 [CMS-1345-P] RIN 0938-AQ22 | Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations

To view the entire document, click here.

Their release was followed by a conference call wherein Don Berwick, MD, the ‘lame duck’ (I hope not), Administrator of CMS took some ‘questions’. First up was a confrontation from a neurosurgeon, who must be a very fast speed reader, who asserted the program was about rationing and denying care, and challenged the package as ‘immoral’. The rest of the calls where more of the more civil and Q&A variety. For an excellent ‘background and context’ piece listen to a replay of the pre-conference call via: (866) 517-3730. You may also listen to replay here.

We are planning a preliminary ‘deep dive’ roundtable of the regs on ACO Watch: A Mid Week Review Friday, April 1st, 2011 at 4PM Eastern and 1PM Pacific.

Since this is very fresh, I have not yet confirmed my guests, though I am offering participation to several physicians in thought leadership, health care attorneys, and health information technology consultants as well.

Please consider joining us!

IPAs Again

By Jeffrey L. Cohen
Independent practice associations (“IPAs”) are gaining momentum in response to healthcare reform and market changes responding to healthcare reform. In an era when consultants are selling one-size-fits-all solutions, physicians have to consider IPAs as a viable option once again, but they have to fine tune their expectation to recent changes.

In the thunderous noise wrought by talk about accountable care organizations (ACOs), physicians are scrambling to see where they might fit in the future of healthcare. While we think those changes will be neither as severe or as pervasive as feared, we do see huge opportunities for ANY organization which can (1) reduce healthcare expenditures, and (2) improve quality. Healthcare businesses of the future will view utilization skeptically. Hospitals of the future will look like medical practices with beds. Medical practices of the future will have a stake in the cost and quality of care being delivered and will view utilization skeptically.

While we think healthcare reform laws may ultimately be found to be unconstitutional, we see that the marketplace has shifted in anticipation of those changes. And we see that, once again, IPAs have a place. But physicians have to understand what they are, how they work, their limitations and how recent changes will impact them.

IPAs are essentially organizations that allow physicians (who may be competitors) to obtain managed care agreements. Since they MUST function to reduce costs and improve quality, and since payment will likely be tied to meeting quality metrics, successful IPAs will have to—

Have strong physician leadership to police “their own” to ensure lower cost and higher quality;

Have strong and sophisticated administrative management to obtain contracts and really understand what payers and patients want and how to give it to them;

Be capitalized sufficiently to pay for a successful organization;

Contract ONLY on a financial risk basis, which means they will not contract with managed care payers on a pure fee for service basis; and

They will create patient accountability.

Understanding applicable antitrust restrictions is key to successful IPA formation and operations. Along with the Sherman Act and other antitrust laws, the revised Statements of Antitrust Enforcement Policy in Health Care issued by the Department of Justice are required reading for those who want to know how far they can go in discussing payer conduct like bundling claims and routine downcoding. The core changes brought by the revised Statements are: (1) expansion of the “rule of reason” analysis for determining whether the antitrust laws have been breached, (2) expansion of shared financial risk beyond capitation; and (3) expansion of the role of the “messenger.” A messenger is someone who operates like a confidential middle man running payer offers back and for the between payer and IPA physician member, generally a huge disappointment. Instead, IPAs ought to abandon the idea of the messenger altogether and embrace the idea of financial risk sharing—cost savings sharing, capitation and the like.

Physicians ought to keep in mind that the Statements have not changed the longstanding prohibition against price fixing and boycotting, the claims IPAs tend to be most vulnerable to in discussing anything with payers. That is, it is still 100% illegal for: (1) two or more competing physicians to agree to charge specific fees for certain procedures in their respective, independent practices, and (2) two or more competing physicians to agree not to do business with a particular HMO.

Given the cost/quality focus of today’s regulations and marketplace, healthcare organizations MUST find ways to enlist patients in the mission to reduce costs and improve quality. Any parent of a teenager knows, expectations without consequences are meaningless. As such, healthcare organizations will have to lean on patients in any permissible way to reward healthy behavior and to punish costly behavior.

For those who experienced the 90s, with networks and IPAs and the like and observed predatory behavior by business owners dedicated primarily to skimming physician income off the top, remember that now quality metrics will be tied to payer compensation. If you wanna get paid, you will have to meet certain measurable quality expectations. If you wanna earn substantially more than you are now, you will have to show cost savings and enhanced quality. Which is causing many to reconsider the cost savings-quality enhancing role of primary care physicians. Today’s regulatory and market changes are definitely presenting huge opportunities for primary care physicians! For specialists concerned about that, they ought to consider that if they are part of an organization with (1) has primary care and (2) contracts on a cost savings basis, the “wealth” would be shared with them.

IPAs in these early years of healthcare reform will be different from those in the past. For one thing, government regulators are promising to ease up on the anti-trust restrictions if the organization can demonstrate reduced cost and improved quality. Moreover, sharing substantial financial risk is something which is desired by the government and payers alike and which also serves to reduce legal risks.

Like it or not, IPAs are coming back. More forward thinking physicians will embrace the opportunity and will step carefully through the minefield of regulatory compliance.

Jeffrey L. Cohen has over 20 years of healthcare law experience including legal counsel for the Florida Medical Association. Cohen is board certified by The Florida Bar as a specialist in healthcare law. Cohen’s practice immerses him in regulatory, contract, corporate, compliance and employment related matters. As Founder of The Florida Healthcare Law Firm, he has distinguished himself and his firm for providing legal services with the right pricing, responsiveness and ethics. See: http://www.floridahealthcarelawfirm.com or call 888-455-7702.

Ignoring Primary Care: Obscuring the Obvious

By Jeffrey L. Cohen

Healthcare reform used to imply just regulatory change. As time marches on, it also implies market change. Most pundits agree that, whatever happens to the healthcare reform law, whether or not it is found to be unconstitutional, the healthcare business community is unleashed. Change is afoot!

If you follow my nahsaying (some say ‘naysaying’) on the issue, then you know I believe the expectations regarding ACOs are overblown and unrealistic. Martians will not land here en masse, although there may be an occasional stow away on a NASA craft. Put another way, as some others have said, ACOs are like unicorns—magical, mythical beasts that no one has ever seen. I don’t expect many to come prancing around in Florida, at least not South Florida, anytime soon.

Regardless of how you define it, and regardless of what the ACO regs (expected out by the end of March, 2011) say, one thing must be accepted: there is a strong movement in the public and private sector to (1) control and reduce healthcare costs, while (2) improving quality. And ANYTHING that can do that will have a strong spot on the chess board, whether you call it an “ACO,” and “Patient-centered medical home” or a “tomato.”

To be sure, the healthcare marketplace has been shaking and rattling for many years. The last time the industry shook anything like this was in the 90s, with the advent of such things as networks, IPAs, fully capitated care centers, PHOs and community healthcare purchasing alliances (CHPAs). As most know, there were two things missing from that evolutionary bump: (1) the requirement of quality metrics, and (2) tying compensation to those metrics. The healthcare reform law has both those features and they are likely to stick, even if the law vanishes under legal challenge.

A third and very important thing to notice about the 90s is that nearly all the integration activity (e.g. PPMs, networks, IPAs, hospital acquisitions) was in the area of specialty medical services, not primary care. Only the highest grossing medical specialties were sought after. And that hasn’t changed much! The integration activity today continues to be in specialty areas like orthopedics, OB/GYN, dermatology and the like.

Even hospital integration activity involves specialty services to feed their hospital based services (e.g. cardiology)! What appears to be going on is simply this: stakeholders jockeying for the best defensive position. Integration appears to be largely designed to develop market share and contracting leverage. Primary care is largely being left out, and yet it is clear to most think tankers that it must take center stage in order to reduce costs and improve quality! Most of the market activity is based on short-sighted economic fears rather than a far-reaching commitment to the above mentioned core objectives. Simply put, it’s tantamount to putting one’s head directly in the sand.

So the question now, assuming that cost and quality will continue to be the leverage points, is how best to deliver care in a way that is extremely cost effective and which clearly demonstrates quality outcomes. And at least one important part of the answer seems obvious: primary care must take center stage. If we look behind the Wizard’s curtain in the regulatory and market changes in healthcare, what we would see is not some bald guy in a green suit.

And it won’t be a hospital CEO who measures profitability by patient census. Nope. We’d see a primary care physician. While integration and growth can be a nice and important short term strategy, without primary care, the long term goal of cost reduction and quality enhancement is unlikely. In the future, only those healthcare businesses with a strong primary care component will be best situated to lead and flourish amidst the change policy makers and the business community seem committed to.

How? Any way you want! Regional primary care IPAs? Good. Large integrated primary care practices? Good. Specialist groups merging with primary care practices? Good. Hospitals employing primary care physicians? Good (for the hospital). Whereas the 90s really ushered in financial opportunity for a small group of entrepreneurial physicians, today’s tie in with quality indicators creates a huge opportunity for physicians to not only adapt, but also to thrive.

Head Spinning Post HealthCamp San Diego, Health 2.0 Spring Fling and more

Whew!

What a week here in San Diego, and the oven is just starting to warm up in this resource rich county peppered with cutting edge integrated delivery systems, pockets of physician thought leadership, encircled by high concentrations of bio-tech, life sciences and wireless health innovators, including forward thinking academic centers of excellence.

What’s all this got to do with ACO’s, that comes in separate post due shortly.

Meanwhile, we continue to wait on the first round of a notice of proposed rules regarding implementation of the Account Care Organization provisions embedded in the Patient Protection and Affordable Care Act, which incidentally turned one year old yesterday, March 23rd, 2011. The recently re-skinned CMS site for the Center for Medicare and Medicaid Innovation is encouraging, check it here.

Lots to report, including the inaugural meeting of the Health 2.0 San Diego Chapter. Back later!

Tough Sledding Ahead for the EHR Industry?

Perhaps this exchange best illustrates the clash of culture between the ‘medical boots in the ground’ aka CMIO’s and the EHR industry. The names have been changed to protect the innocent or guilty depending on your perspective.

Cast:

A really smart and justifiably confident EHR engineer, programmer and system architect for a major EHR company with decent market share.

A passionate and ‘has drunk the koolaide’ CMIO (of a modest size East coast, stand-alone non-profit community hospital) of the EHR value proposition, with some rather compelling reservations and real time (garbage in/garbage out) concerns.

Paraphrased narrative over drinks and dinner:

CMIO: Your EHR (generically speaking) is going to kill hospitals like mine!

EHR Dude: Why do you say that?

CMIO: There’s too much unfinished translational work that invariably falls onto my desk as CMIO and therefore the de facto educator and implementer in chief of a program that few physicians want to try to learn let alone work with.

EHR Dude: Well then that’s your problem.

CMIO: No but you don’t understand, it’s killing my hospital and will take us down (i.e., out of service).

EHR Dude: Well, I doubt it. But if that is the case, then so be it…let it sink.

Ok, this oversimplifies and perhaps takes some literary license on the actual narrative, but this is what I basically heard.

I left dinner thinking that, man, isn’t CMIO the customer here? And if so, shouldn’t EHR dude be listening, and learning from a first person boots on the ground report as an opportunity to make his or the industry’s product better?

What am I missing?

Clinical Integration Key To Successful ACO Development

As posed by Jonathan Bush, President & CEO of AthenaHealth in a superb interview by Matt Holt, aka @boltyboy on Twitter (thanks again, Matt!), at the HIMSS 2011 annual conference in Orlando last week, A/C/O development for some institutionally led ACO initiatives is merely ‘code’ for the license to roll-up, or otherwise acquire physician practices.

‘Danger Will Robinson, Danger!’

However, from lessons of the not-to-distant past, watch when your institution ‘marries’ your physicians’ checkbooks. A funny thing seems to happen on the way to ‘strategic nirvana’ envisioned by ‘me too’ or cookie cutter integration formulas.

Yet, courtesy of the FTC, and DOJ, financial integration in order to assume risk, legally set price, align incentives and better manage medical resource utilization, is not the only glidepath towards ACO formation. For a background piece courtesy of Donald R. Moy, Esq., Michael J. Schoppmann, Esq. & Mathew J. Levy, Esq. Kern, Augustine Conroy & Schoppmann, P.C., click here.

In fact clinical integration on the surface if not in deep into the mechanics of its transformational DNA affords a rather compelling rationale to leave ‘cowboy’ or solo practice medicine behind and foster the care coordination, aka group practice culture, so essential to shift to a population based ACO care management paradigm (see reasoned speculation by Katherine Rourke ‘Do You Need An EMR To Make ACOs Work‘? My answer: yup)!

In the clinical integration scenario, health information from a community-wide perspective, is the ‘secret sauce’ that brings independent i.e., mainstream medicine, into the care coordination and better resource management conversation; a far less threatening and disruptive proposition to the prevailing practice paradigm in the US today.

For detailed indicia of clinical integration, see the 2007 FTC advisory opinion letter issued to the Greater Rochester Independent Practice Association, Inc.

More later…

ACO Watch: A Mid-Week Review with William DeMarco

On the Wednesday, March 2rd 2011 program at 11AM Pacific and 1PM Central Time, my special guest commentator is noted author, speaker and consultant William DeMarco, for more information, click here.

DeMarco is the President & CEO of DeMarco & Associates, Inc., a national, independent healthcare consulting firm specializing in healthcare delivery system redesign and transformation.

DeMarco is recognized as a leader in the research , design and implementation of community based healthplans. Since his involvement in several startup health plans in Minnesota in the early 1970s Bill and his team of management consultants clinical specialists and reimbursement analysts have assisted employers and physicians in developing better relationships with insurers up to and including developing local solutions to deliver and finance care.

Using Health Services Research from its affiliate Pendulum HealthCare Development Corporation, DeMarco and Associates assists both provider and employer clients in addressing prospective payment approaches in order to build Pay for Performance models to develop direct employer/provider contracting entities, benchmarking collaboratives under the new value purchasing legislation as well as single specialty centers of excellence.

DeMarco is a well-known author having written or contributed to over a dozen books on managed care topics. He holds a master’s degree in organizational development from DePaul University. He a past faculty member of Loyola Law School’s graduate program and was recently awarded the Follomer Bronze award from the Healthcare Financial Management Association for his outstanding service and contributions to HFMA chapters and members. He is a regular presenter for such audiences as Medical Group Management Association, HFMA, VHA, AHA, Quorum, NMHCC and AHIP.

To join us live or via archived replay, click here.

HIMSS Post Script

Head still spining but lots to say on my trip to HIMSS 2011 in ‘Orlando-topia’!

Processing this morning: ‘tough sledding ahead for EHR industry’ a vignette of an overheard conversation between a very smart EHR engineer, and a community hospital CMIO. Crystallizes in my view the ‘dis-connect’ between some in the EHR industry and their ‘medical boots on the ground’ clients.

Also, much to share from the ACO front. I expecially will focus on a comment proffered by Jonathan Bush, of AthenaHealth wherein he posits: ‘Is ACO code for hospitals rolling up docs’ under an integration umbrella.

The Leading from the Future ACO Event, was superb! More to come.

Leading from the Future: A Thought Leadership Event on Accountable Care Organizations

And so the day/event arrives which brought me from San Diego to HIMSS 2011 Orlando arrives.

Leading from the Future kicks off (though apparently there’s been some confusion with the schedule), at 1PM with Lee Sachs, EVP, and Chief Medical Officer, Advocate Health Partners. Advocate is perhaps one of the prototype ‘institutionally lead’, though private medical community integrated (via members IPAs in a ‘super PHO’ configuration) ACO. For context on Advocate Health Partners, click here.

Advocate’s history traces back to the PHO days, with local market IPAs as their member physician components. Unlike many of the PHO’s that un-winded in the late 90s, as many entities took charges to their balance sheets and ‘refocused on their core operations [of running hospitals]’, Advocate hung together and morphed into a ‘quasi’ perhaps hybrid virtual, but clinically and financially, integrated entity.

It will be of interest to hear what they have to say. They no doubt are one version of the elusive ‘Unicorn‘.

For those of you attending HIMSS, the session in in room 414 A & B.

For Lee Sacks preso, click here.

Details:

Clinical Integration: The Foundation for Accountable Care | Wednesday, February 23, | 1:00 PM – 2:00 PM

Description:The session will describe Accountable Care Organizations, show how clinical integration creates value, and identify challenges for those who are building an ACO. Speaker Information: Lee SacksExecutive Vice President, Chief Medical Officer, Advocate Health Care