Monitoring the birth of an industry
On November 30th, 2010 at 10:00 AM Pacific and 1:00 PM Eastern, ‘ACO Watch’ will launch a weekly round-up of action in the emerging Accountable Care Organization (ACO) ‘tsunami’.
As the volume of activity builds in anticipation of the January 2012 ‘go live’ date, we will summarize, vet, and comment on the activities of the major and perhaps below the radar screen, if not stealth, players.
Our first guest commentator is to be announced shortly.
To join us, click here.
Tony Miller, for HealthLeaders Media
The Accountable Care Organization model presents extraordinary opportunities. It promises to move Medicare and potentially other payers from traditional, volume-driven, inherently inefficient, and counter-productive fee-for-service financing to a value-driven, patient-centric approach to payment and care delivery. And unlike a multitude of other reform initiatives affecting care delivery and payment, the Medicare ACO program will be a nationwide option, not a mere demo or pilot.
Working together under the umbrella of an ACO, health systems, physicians groups, and other health care providers will be able to redesign care and realign economic incentives. As evidenced by private sector projects led by Carol Corp and other innovators across the country, the benefits of accountable care are impressive: higher quality of care, increased patient safety, improved patient satisfaction, strong care management and coordination, and lower costs. In other words, a genuinely win-win scenario for patients, providers, and taxpayers. The entry of Medicare and the prospect of significant shared savings will serve to make accountable care a viable reform across the marketplace—provided the Centers for Medicare and Medicaid Services (CMS) adopts sound policies.
CMS plans to release proposed rules on…
Full text of article, here.
Tony Miller is the Chief Executive Officer of Carol Corp.
Donald M. Berwick
This document is a request for comments regarding certain aspects of the policies and standards that will apply to accountable care organizations (ACOs) participating in the Medicare program under section 3021 or 3022 of the Affordable Care Act.
Comment Date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 3, 2010
Background
The Affordable Care Act seeks to improve the quality of health care services and to lower health care costs by encouraging providers to create integrated health care delivery systems. These integrated systems will test new reimbursement methods intended to create incentives for health care providers to enhance health care quality and lower costs. One important delivery system reform is the Medicare Shared Savings Program under section 3022 of the Affordable Care Act, which promotes the formation and operation of accountable care organizations (ACOs). Under this provision, “groups of providers * * * meeting the criteria specified by the Secretary may work together to manage and coordinate care for Medicare * * * beneficiaries through an [ACO].” An ACO may receive payments for shared savings if the ACO meets certain quality performance standards and cost savings requirements established by the Secretary. We are developing rulemaking for the establishment of the Shared Savings Program under section 3022 of the Affordable Care Act. In addition, section 3021 of the Affordable Care Act establishes a Center for Medicare and Medicaid Innovation (CMMI) within CMS, which is authorized to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care. We are considering testing innovative payment and delivery system models that complement the Shared Savings Program in the CMMI. In both of these efforts, we are seeking to advance ACO structures that are organized in ways that are patient-centered and foster participation of physicians and other clinicians who are in solo or small practices.Show citation box
We have already conducted substantial outreach and…
Read full text, here.
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Donald Berwick submitted testimony:
To watch the hearing click here.
Chairman Baucus, Ranking Member Grassley, and Members of the Committee; thank you for the opportunity to appear before you to discuss ways to strengthen Medicare and Medicaid and modernize America’s health care delivery system. The Affordable Care Act, passed by Congress and signed into law by President Obama in March of this year, is landmark health care legislation that is bringing comprehensive insurance reforms, expanded coverage, and enhanced quality of health care to all Americans. Millions of people across the country are already benefiting from this law, including the more than 100 million people enrolled in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). Because of the Affordable Care Act, the fiscal future of Medicare is stronger, new tools to fight Medicare and Medicaid fraud are returning money to the Trust Funds and the Treasury, Medicare beneficiaries have new benefits and lower costs, and State Medicaid programs have additional resources and options to expand coverage, which is especially important in these challenging economic times.
As a pediatrician, I have witnessed both the best and the worst of the American health care system. I had the opportunity to practice pediatrics for 20 years in an organization that promoted integrated care, and saw firsthand the enormous difference that a doctor, nurse, and patient working together can make in health care outcomes. I have devoted my career to the belief that all patients deserve access to high quality health care, regardless of who they are or whether they live in a large city or a small rural community. High quality health care does not necessarily mean the most expensive health care. It means safe care, free from medical injuries, errors and infections; it means reliable care, based on the best available science; and it means person-centered care, in which each patient is treated with dignity and respect for his or her own unique preferences.
These core beliefs will continue to shape my work at the Centers for Medicare & Medicaid Services (CMS). As Administrator, protecting and strengthening Medicare, Medicaid, and CHIP is my top priority. And the Affordable Care Act has provided a number of important tools to help achieve this goal. It explicitly protects the guaranteed Medicare benefits on which so many seniors and individuals with disabilities rely. It will not cut these guaranteed benefits, nor will it ration care. The Affordable Care Act does not prescribe a ―one size fits all‖ approach to health care, because health care is first and foremost about caring for unique individuals. The Affordable Care Act incentivizes hospitals to improve the quality of care and prevent unnecessary readmissions, which are often harmful to patients.
CMS can help lead health care improvement in many ways. With new provisions in the Affordable Care Act, you have presented CMS with additional opportunities to work with others both in the public and private sector to make real improvements in the nation’s health care delivery systems.
CMS can and should be…
For complete testimony transcript, click here.
Francisco Silva
Guiding principle – The goal of an accountable care organization (ACO) is to increase access to care, improve the quality of care and ensure the efficient delivery of care. Within an ACO, a physician’s primary ethical and professional obligation is the well-being and safety of the patient.
ACO governance – ACOs must be physician-led and encourage an environment of collaboration among physicians. ACOs must also be physician-led in order to ensure that a physician’s medical decisions are not based on commercial interests but rather on professional medical judgment that puts patients’ interests first.
Voluntary participation – Patient participation in an ACO should be voluntary rather than a mandatory assignment by Medicare. Any physician organization (including an organization that bills on behalf of physicians under a single tax identification number) or any other entity that creates an ACO must obtain the written affirmative consent of each physician to participate in the ACO. Physicians should not be required to join an ACO as a condition of contracting with Medicare, Medi-Cal or a private payor or being admitted to a hospital medical staff.
Savings used for patient care – The savings and revenues of an ACO should be retained for patient care services and distributed to the ACO participants. An ACO’s savings and revenues should not go to insurers.
Flexibility in patient referral and antitrust laws – The federal and state anti-kickback and self-referral laws and the federal Civil Monetary Penalties (CMP) statute (which prohibits payments by hospitals to physicians to reduce or limit care) should be sufficiently flexible to allow physicians to collaborate with hospitals in forming ACOs without being employed by the hospitals or ACOs. This is particularly important for physicians in small and medium size practices who may want to remain independent but otherwise integrate and collaborate with other physicians (i.e., so-called virtual integration) for purposes of participating in the ACO.
For more detailed information, or to view the full report from CMA’s Physician-Hospital Alignment Technical Advisory Committee, click here.
Source: http://www.calphys.org/html/news.asp
On October 19, 2010, the National Committee for Quality Assurance (NCQA) released its draft 2011 Accountable Care Organizations (ACO) criteria for public comment. NCQA’s mission is to improve health care quality through its activities, such as accrediting and certifying health care organizations and recognizing clinicians and practices in key areas of performance. The following advisory provides a summary of the draft ACO criteria, as well as a list of issues on whichNCQA requests feedback.
NCQA defines ACOs as “provider-based organizations that take responsibility for meeting the health care needs of a defined population with the goal of simultaneously improving health, improving patient experience and reducing per capita costs.” NCQA notes that while providers will differ in how they organize themselves as ACOs and what components of care delivery they include in their organization, they all “must include a group of physicians with a strong primary care base and sufficient other specialties that support the care needs of a defined population of patients.” Also, clinical and financial incentives should be aligned for providers; this requires an administrative infrastructure to perform functions including managing budgets, collecting data, reporting performance, making payments related to performance and organizing providers around shared goals.
There are seven proposed categories of reflecting core ACO capabilities: (1) program structure operations; (2) access and availability; (3) primary care; (4) care management; (5) care coordination and transitions; (6) patients rights and responsibilities; and (7) performance reporting. Within each of the criteria are a number of standards consisting of elements and factors that are scored. Attached to this memorandum is a table outlining the categories, standards and elements included in the draft ACO criteria.
The draft criteria are geared toward assessing whether an ACO has the infrastructure needed to reduce costs, improve health care quality and improve patient experience. In the draft ACO criteria, greater focus is placed on the organization’s capabilities rather than performance. Noting that it will be some time before organizations can be judged primarily on performance measurement, NCQA believes that there must be “clear standards that assess capabilities that improve the likelihood of a potential ACO’s success and that provide a blueprint and a pathway (with clear stages) to full ACO capacity.”
In addition to comments on the individual standards and elements in the draft criteria, NCQA is requesting feedback on the following issues concerning the criteria:
Public comments to the draft criteria are due by November 19, 2010. The comments will be considered as the criteria are finalized for release in mid-2011.
For ACO Draft 2011 Criteria, click here.
Original source reference, click here.
The impending rise of Accountable Care Organizations (ACOs) as market participants, and their apparent autonomy from an ‘institutional partner’ perspective, whether of the clinical or licensing (i.e., payor) variety, is no doubt raising concerns in certain sectors.
Clearly the guidance to date, which enables ACO anointing absent a hospital partner is causing some hospital CEOs, and/or their parent systems, to lose some sleep. However, lets not forget about the health plan or payor community particularly from the point of view of their trade group voice.
Last month AHIP (America’s Health Insurance Plans), released ‘Accountable Care Organizations and Market Power Issues.’
Chief among AHIP’s concerns is the anti-trust downside of unbridled market power leading to concentrated (monopolistic) market influence in the hands of too few (and perhaps ‘untethered’) players:
ACOs have the potential to improve quality and reduce costs for consumers and payers alike, by providing more patient-centered, coordinated, collaborative care. The ACA provides only the broad outlines of the ACO program, and without proper design, provider aggregation could result in market power, undermining the program’s goals of lower costs and higher quality. To avoid bad marketplace outcomes, the ACO rulemaking should structure the program to minimize antitrust concerns.
Might this be a case of the pot calling the kettle black?
Gregg Masters, MPH
Since we now find ourselves at the gateway of resurgent if not soon to be robust exploratory conversations between hospitals, their medical staffs, the broader private medical community and the likely joint venture entities to implement any collaborative vision, this time under the aegis of Accountable Care Organization (ACO) incentives, I thought it might be useful to recall one unwinding for context and educational purposes.
In the 1990s Presbyterian Healthcare System (PHS) in Dallas, Texas (pre-merger with Harris Methodist Health System and Arlington Memorial Hospital into Texas Health Resources), reading the tea leaves of the wisdom of joint contracting with its medical staff formed ‘System Health Providers’ (SHP) a PHO with it’s primary affiliate IPA (independent practice association) ‘Genesis Physicians Group’ (GPG) and it’s risk contracting derivative, Genesis Physicians Practice Association (GPPA).
PHS had previously formed a first generation PHO doing business as ‘JVE’ which stood for ‘joint venture entity’, a most generic of names which none-the-less represented a culture of commitment by both hospital and medical staff leadership to the idea of collaborating minimally to build provider side leverage in the then fast consolidating managed healthcare industry.
Thus SHP represented a ‘PHO 2.0’ effort – if you will, for at least the PHS side of the JV. All seemed to progress quite nicely, as SHP, a messenger model PPO routinely extracted rather premium pricing when contrasted to other DFW systems including Baylor and the then rapidly consolidating Columbia Healthcare network, and held payor agreements with virtually all major players in DFW.
Yet, somewhere on the road to contracting nirvana, the enterprise stumbled across a ‘trigger event’, initially seen as rather innocuous, but which later began a rather unpleasant and painful unwinding process straining long-standing relationships and testing the goodwill of the partners.
In the fine print of the PHO agreement between the two members (PHS & GPG) was an arcane provision titled ‘mandatory redemption’. Though a rather routine legalese provision, what this language addressed were the conditions under which one member would buy back the share or interest (i.e., redeem) in the JV, and effectively terminate the equity basis for collaboration.
In this case, the ‘offending party’ was PHS, and the trigger event was the merger with Harris Methodist Health System and Arlington Memorial Hospital to form Texas Health Resources (THR).
Following the closing of the merger, the leadership of SHP in consultation with the leadership of GPG and their legal counsel determined that PHS had effectively triggered the mandatory redemption provision, thus forcing the valuation of SHP, and subsequent buy back of PHS’s interest. In other words, the ‘H’ was to be eliminated as this PHO was on the road to becoming a ‘PO’ (physician organization).
One curious little sidebar to the unfolding of events was the CEO of SHP had a financial incentive for the buy back to occur, as the terms of his employment agreement (and perhaps stock ownership) called for a payout under certain circumstances (one of which apparently included mandatory redemption).
Needless to say, hospital and medial staff or affiliate joint ventures even in the best of times, can be a tad tense, but throw into the mix a testy ‘divorce’ and one can definitely challenge even the most skillful managers to maintain the peace.
Much time has passed and the ship apparently has righted itself as both entities continue to work together although I have no direct tie to either.
So what lesson(s) can be extracted from this one experience? One is to choose your partner carefully (do you even need one?), be clear on your intentions, and market upside; then study the fine print of your agreements. Better yet, know your value, understand your goals and make sure you account for likely bumps in the road. While much of the discussion in ACO formation will center around the usual suspects of capital, infrastructure, and core management competencies, a far more important ingredient will be a ‘patients first’ collaborative culture, to endure the rocky road of aligning the partners interests in the JV. Then again, since an ACO does not necessarily need to be a ‘joint venture’ per se, with an institutional partner whether hospital or parent system, do you even want to go down that road? It will no doubt get real interesting, real soon.
Gregg Masters, MPH is an independent heath care consultant in San Diego, California, who served as Vice President for Managed Care and Network Management of System Health Providers, Inc., prior to, during and after the formation of Texas Health Resources.
N Engl J Med 2010; 363:e23
Introduction
Under the Affordable Care Act, Medicare will launch a Shared Savings Program for groups of health care providers that join forces, with or without hospitals or health plans, to form legal entities that agree to take responsibility for the quality, cost, and overall care of a population of patients. What will these accountable care organizations (ACOs) look like? Who will step forward to form them? What are the best pathways and likely hurdles to achieving ACO status? What are the risks of entering the arena, and what are the expected benefits for clinicians and patients? In a roundtable discussion moderated by Dr. Thomas Lee, experts Lawrence Casalino, Elliott Fisher, and Gail Wilensky explored these and other questions.
To watch video clip, click here.
Transcript extract:
1. Introduction to ACOs
DR. THOMAS LEE: Welcome to a video roundtable of the New England Journal of Medicine on accountable careorganizations. I’m Tom Lee, an associate editor of the Journal and network president of Partners Healthcare. In atime of incredible transition in health care, we’re all hoping that where we are headed is a delivery system thatdelivers higher-quality care more efficiently. Are accountable care organizations, or ACOs, the vehicle? Whateveryone says is the devil is in the details.To talk about that today, we’ve got three experts with complementary perspectives. We have Gail Wilensky, aneconomist and senior fellow at Project Hope, who served in a variety of roles with relevance to this topic, includingadministrator of the Health Care Financing Administration and chair of MedPAC. We have Elliott Fisher, who is thedirector of the Center for Health Policy Research and a professor of medicine at Dartmouth Medical School. And wehave Larry Casalino, who is the chief of the Division of Outcomes and Effectiveness Research and a professor atWeill Cornell Medical College.
To download complete transcript, click here.
The Integrated Healthcare Association has released a timely and insightful White Paper titled ‘Accountable Care Organizations in California: Lessons for the National Debate on Delivery System Reform‘.
California has 285 physician organizations with many of the characteristics described in the national debate, and its experiences with these organizations over the past thirty years, both positive and negative, offer insight into the challenges that Federal policymakers will face with ACO implementation. This paper outlines five overarching aspects of California physician organizations – their organizational structures, payment methods, relationship with health plans, how they promote consumer choice, and the public policy and regulatory constraints they face – and offers ten key lessons for the national ACO debate.
The ten lessons derived from the five key features and described in detail in the report are:
1. A variety of organizational structures are effective at delivering high quality coordinated care; at least as important to success as structure are an organization’s capabilities, culture, and infrastructure, as well as the alignment of goals between the organization and its individual physicians.
2. In California, a range of relationships exist between physician organizations and hospitals. Alignment of incentives between physician organizations and hospitals offer important opportunities for performance improvements across the entire continuum of care.
3. As a method of payment, capitation can be effective at encouraging coordinated care, but payment methods should vary across ACOs depending on an organization’s ability to assume risk. Fee-for-service payment with shared savings has not proven a successful incentive for the efficient delivery of care.
4. Health plans acting in concert on payment methods and performance measurement helped facilitate the growth of California’s provider organizations, and should also play an integral part in fostering ACO development nationally.
5. ACOs are not a panacea for health care spending control. Some large provider organizations have gained bargaining power and raised prices. Capitation payment and consumer cost sharing partially offset tendencies toward raising prices.
6. ACOs must be agnostic to insurance type; most provider organizations in California have focused on commercial, Medicare, and Medicaid HMO plans for their patients, but for ACOs to be viable across the country, mechanisms must be found to encourage PPO and traditional Medicare and Medicaid patients to use their services.
7. Balancing patient choice with the desire to decrease costs and effectively coordinate care is difficult. California’s experience underscores the challenge of promoting care coordination in an environment of unrestricted provider choice.
8. Regulation of the financial solvency of provider organizations is important to ensure market stability.
9. Consumer protections from capitated provider organizations need to be balanced, not overburdening.
10. Special attention must be given to establishing ACOs in geographic areas with identifiable social and economic challenges. Some California ACOs have been very successful at managing care for Medicaid patients, despite low payment rates from the state.
The report was funded by IHA and co-authored by James C. Robinson and Emma L. Dolan, a graduate student in public health and public Policy at UC Berkeley. The complete report is available at www.iha.org.
acowatch.me 