Accountable Care Organizations Gain Momentum
By Brenda Radke, CEO // May 24, 2012
THE BUSINESS OF HEALTH CARE
PHYSICIANS: WILL YOU BE JOINING AN ACO?
It’s likely that you will be hearing much more about Accountable Care Organizations (ACOs) in the very near future.
While everyone claims to be forming an ACO remember, the basic idea is that carriers like Medicare will contract organized networks of healthcare providers that may include hospitals, physicians, and ancillary services to care for members of a defined population.
While the ACO concept gained momentum as a result of the healthcare reform legislation the idea is nothing new. The Clinton health initiative included similar networks of providers, Accountable Health Partnerships, a proposal that went nowhere. So why should you worry about the current ACO model?
Physicians should be concerned for a number of reasons: None bigger than CMS’s projection of the current fee-for-service model to be bankrupt by 2017.
Secondly the health reform bill is now law, even if the law is modified or repealed the general public also sees our healthcare system as flawed and those in office will not ignore that concern.
If ACOs are inevitable then what do physicians need to know? The most critical component is the role of the primary care physician (PCP).
The PCP will decide where to refer, be the repository of all patient related data, and be a “partner” in the patients overall healthy lifestyle. Healthy lifestyle will remain the key as physicians and other healthcare provides will work together to treat patients in a more efficient and cost effective manner while continuing to improve health.
Based on these two topics, payers will negotiate a price on bundled payments based upon the history of the patient.
The key element is large numbers of patients will be locked into an ACO; providers who do not participate may see a decrease in volume.
Unfortunately partnering physicians and hospitals (although not a required component) will not be enough. ACOs will need to provide integrated data systems, and management structure for both clinical and administrative hurdles.
Although most physicians will likely choose the “wait and see” approach with these organizations, 2012 is closer than we think. Changes in health care methodology and payment are right around the corner. The time to act is now.
Facts Physicians Should Know about Medicare Accountable Care Organizations (ACOs):
Medicare Accountable Care Organizations are a product of the Federal Healthcare Reform Act. The ACO falls under the Patient Protection and Affordable Care Act (PPACA) enacted March 23, 2010.
- ACOs will be eligible for financial incentives based upon the quality and efficiency of care provided to the patient.
- ACOs that meet certain criteria established by the Secretary (yet to be published); will be eligible to participate in the resulting Medicare savings. It is important to remember cost saving bonuses will be payments in addition to Part A and Part B Medicare fee-for-service programs.
- ACOs will not be able to choose the patients for which they provide care.
- Each ACO will be assigned at least 5,000 Medicare lives based upon those beneficiaries utilization of primary care physicians within the ACO.
- Primary Care Physicians are the catalysts.
- PPACA will promote the patient center medical home (PCMH) concept to achieve quality initiatives. Due to the assignment of patients to a PCP and ultimately an ACO PCPs will be mandated to a single ACO while specialists may contract with multiple entities.
- Those ACOs that retain patients while referring within their own network will be most effective.
- Medicare beneficiaries will be able to choose their own healthcare providers even if such providers do not participate in the ACO the patient is assigned. Keeping in mind the bonuses for quality, it will certainly be an incentive for ACO physicians to refer within the ACO.
- ACOs must satisfy numerous eligibility requirements in order to participate in the Medicare Shared Savings Program. At present each ACO will need to satisfy the criteria below:
- Create a legal structure to receive and distribute shared savings
- Have enough PCPs to manage a minimum of 5,000 Medicare beneficiaries.
- Agree to a term of participation no less than 3 yearsHave sufficient information regarding participating ACO health care professionals as the Secretary determines is necessary to support the beneficiary assignment and for the determination of payments for shared savings
- Form a management structure that includes clinical and administrative systems
- For a defined process to promote evidence based medicine, provide the necessary data to evaluate quality and cost measures, while coordinating care across all providers.
- Demonstrate the ACO will meet patient centered criteria determined by Secretary of Health.
- PPACA provides that numerous types of organization can become an ACO.
- Various types of models can be conceptualized as highly integrated models (group practices), models with limited integration (joint ventures, IPA), and contractual models (management services).
- The ability to efficiently and effectively share information will be paradigm to an ACOs success. As a condition of the shared savings program, ACOs will need to submit data to the Secretary that is necessary to determine the quality of care implemented by the ACO. Each will require IT and EHR infrastructure in place to maintain, share, retrieve, and report meaningful use data.
- ACOs will serve as a catalyst for further integration among healthcare providers.
- The healthcare community is preparing for the future participation in Medicare Shared Savings via the ACO.
There are many uncertainties surrounding the requirements that ACOs will face in order to receive Shared Savings incentives. CMS’s proposed requirements regarding this program are expected to be published shortly.
Not withstanding, many providers are wisely looking beyond basic contours of the proposed Medicare Shared Savings Program and developing strategies to prepare for future implications.
Brenda Radke is CEO of Brevard Physicians Network, the not-for-profit organization that acts as liaison between insurance companies and 300 Network member physicians in Brevard and Indian River Counties. She has an impressive background in all aspects of the health insurance field. For more than two decades, Radke has been immersed in some of the largest health care groups in the state, including Humana Health Care of Florida, Wellcare of Florida, United Healthcare of Florida and Accountable Health Plans. She served as director of finance for Humana as well as the corporation’s director of wholly owned affiliated physicians clinics. Radke was also regional director of provider operations for Care Plus, executive director of Wellcare of Florida, finance manager for United Healthcare and director of provider operations for Accountable Health Plans. She holds degrees in business administration and healthcare management, and is very active in supporting many community causes.