Isn’t This HMOs All Over Again?
PPACA’s Push for Integration
B. Kevin Burgess
Donald R. Laird
Watkinson Laird Rubenstein
Baldwin & Burgess, P.C.
101 E Broadway, Suite 200
Eugene, OR 97401
(541) 484-2277
www.wlrlaw.com
2
• The problem is that 99.99% of the HMO's
make a bad name for the rest of
them.
3
A Look Back
• Where we’ve been over the last 45 years.
4
• Q) Will health care be any different in the
next century?
• A) No, but if you call right now, you might
get an appointment by then
5
PPACA Push for Integration
• Accountable Care Organizations (ACOs)
• Center for Medicare and Medicaid
Innovation
• National Pilot Program on Payment
Bundling
• Gainsharing demonstration
6
ACOs in PPACA - Basics
•
•
•
•
Section 3022 of PPACA.
Medicare Shared Savings Program.
Established no later than January 1, 2012.
Statute provides great discretion to the
Secretary.
• Proposed rule set to be released in fall of
2010.
7
ACOs in PPACA - Requirements
• ACO must:
– Have a formal legal structure for receiving and distributing
shared savings payments from Medicare.
– Have in place a leadership and management structure that
includes clinical and administrative systems.
– Agree to participate in the program for at least three years.
– Have the Secretary assign it at least 5,000 Medicare
beneficiaries, and include a sufficient number of primary care
physicians for serving those patients.
– Have processes relating to quality and coordination of care, such
as the use of telehealth, remote patient monitoring, and other
technologies.
– Have patient-centered processes that meet criteria specified by
the Secretary.
– Meet reporting requirements determined by the Secretary.
8
ACOs in PPACA - Compensation
• Shared Savings.
– ACO is eligible for shared savings payments if
it meets quality and performance standards
and the ACO’s estimated Medicare costs are
a certain percentage below a benchmark set
by the Secretary.
– Shared savings model only applies to fee-forservice
• Partial Capitation. PPACA also directs the
Secretary to establish a partial capitation
option.
9
ACOs in PPACA - Composition
• ACOs must be “clinically integrated.”
• Most frequently mentioned models (in
reverse order of integration).
– Independent Physician Association (IPA)
– Physician Hospital Organization (PHO)
– Multi-Specialty Group Practice (MSGP)
– Fully Integrated Delivery System (IDS)
10
CORE CAPABILITIES
ACO Model
Redesign
Care
Processes
Teamwork
Care
Coordination
Performance
Accountability
Information
Technology
Knowledge
Management
Change
Management
IDS
High
High
High
High
High
High
High
MSGP
High
High
High
High
High
High
Medium
Medium
Medium
Medium
High
High
Medium
Medium
Varies
Varies
Varies
Varies
Varies
Varies
Varies
PHO
IPA
11
Integrated Delivery System
IDS
Holding
Company
Hospital
Nursing
Home
Physicians
Professional
Corporation
Physicians
Physicians
Other
Ancillaries
MSO
Health
Plan
Physicians
= ownership arrangement
12
Multi-Specialty Group Practice
MSGP
Holding
Company
Third-Party Payors
Hospital
Nursing
Home
Physicians
Professional
Corporation
Physicians
Physicians
Other
Ancillaries
MSO
Physicians
= ownership arrangement
= contractual relationship
13
Physician/Hospital Organizations
Joint venture
Hospital
Primary Care
Physicians and
some Specialists
PHO
Third-Party
Payors
Nursing
Home
Home
Health
Other
Ancillaries
Specialists
= ownership arrangement
= contractual relationship
14
Independent Practice Associations
Physician
P.C.
Physician
P.C.
Physician
P.C.
Physician
P.C.
Physician
P.C.
IPA
Third-Party
Payors
Home
Health
Nursing
Home
Other
Ancillaries
Specialists
Hospital
= ownership arrangement
= contractual relationship
15
ACOs in PPACA – Shared Savings
• “Fee-for-service plus.”
• Providers continue to bill fee-for-service,
but are eligible to receive an incentive
bonus if CMS determines the ACO saved
CMS money through efficiencies while
providing quality care.
16
ACOs in PPACA – Shared Savings
• ACO must both save CMS money and
delivery quality care.
• Regulations have not been released
detailing the program, but it is based on
Medicare’s Physician Group Practice
demonstration. (PGP demonstration).
• The PGP demonstration measured
savings and quality as follows on the next
slide.
17
ACOs in PPACA – PGP Demo
• Step 1. Calculate the Savings.
• Step 2. Allocate Savings.
• Step 3. Calculate Quality Measure Performance.
• Step 4. Allocate Remaining Bonus Pool Amount.
• Step 5. Payment of Allocated Amounts.
18
PGP Quality Measures
Example
19
Condition
Measure
Description
Weight
Diabetes
HbA1c Management
% of diabetic patients with 1 or more A1c
tests
4
HbA1c Control
% of diabetic patients with most recent A1c
level > 9.0%
1
Blood Pressure Management
% of diabetic patients with more recent BP <
140/90 mmHg
1
Lipid Measurement
% of diabetic patients with at least one lowdensity lipoprotein (LDL) cholesterol
test
4
LDL Cholesterol Level
% of diabetic patients with most recent LDL
cholesterol < 130mg/dl
1
Urine Protein Testing
% of diabetic patients with at least 1 test for
microalbumin during year; or who
had medical attention for
nephropathy
4
Eye Exam
% of diabetic patients who rec’d a dilated eye
exam or exam of retinal photographs
by optometrist of ophthalmologist
during year
4
Foot Exam
% of eligible diabetic patients rec’ing at least
one complete foot exam
1
Influenza Vaccination
% of diabetic patients >50 yrs who rec’d flu
shot during year
1
Pneumonia Vaccination
% of diabetic patients >65 yrs who ever rec’d
a pneumococcal vaccination
1
20
• Q) What accounts for the largest portion of
health care costs?
• A) Doctors trying to recoup their
investment losses.
21
ACOs in PPACA – Legal Issues
• Potential legal issues:
– Antitrust laws
– Stark law
– Anti-kickback statute
– Services reduction civil money penalty
– HIPAA
– State corporate practice of medicine
22
ACOs in PPACA – Legal Issues
• Antitrust issues
– Clinical integration model and possible safe
harbor
– Urban v. rural providers
– Provider fee negotiations
– Market allocations within an ACO or between
ACOs
– Provider exclusivity
– Problems with boycotts and refusals to deal
– Problems with ACO or participant having market
power
– Ancillary service referrals
23
ACOs in PPACA – Legal Issues
• Stark
– Referrals for designated health services
– Prohibits financial relationship between
referring physicians and participating
designated health services entity
– Penalties
– Waiver
• Waiving distribution of shared savings
• Waiving unequal start-up expenditures such as
EHR/IT
• Waive before or after certification as ACO
24
ACOs in PPACA – Legal Issues
• Anti-Kickback Statute
– Prohibits inducing or paying for government
paid business
– No Safe Harbor protection applicable
– Penalties
– Waiver
25
LEGAL RISKS
ACO Model
Stark
AntiKickback
Statute
Antitrust
HIPAA
CMP
Low
Low
Very Low
Low
Medium +
MSGP
Medium
Low
Medium
Low
Medium +
PHO
Medium
Low
Medium
Medium
Medium +
IPA
Medium +
Low
Medium +
Medium +
Varies
IDS
26
ACOs in PPACA – Other Issues
• What standards will CMS use to certify ACOs
• What is the best method to measure physician
performance?
• Who will drive the ACO – hospitals or providers? Is an
ACO right for all providers?
• Will there be room for small practices outside ACOs?
• How large should an ACO be? Does it depend on
market and patient population?
27
ACOs in PPACA – Other Issues
• Will ACOs aggregate dominant providers and drive up
private market reimbursement rates?
• How will ACOs contract with private third-party payors?
• Should providers participate in more than one ACO?
• Will patients know their in an ACO?
• What prevents ACOs from selecting patients to maximize
savings or to meet quality targets?
• Will ACO performance be available to patients?
• What if patients don’t follow their treatment plans?
28
• Q: What is the difference between an
HMO and a car battery?
• A: The battery has a positive side.
29
Center for Medicare and Medicaid
Innovation (CMI)
• Center within CMS.
• Purpose. Develop and test innovative
payment and delivery models to reduce
the rising cost of Medicare and Medicaid
expenditures.
• January 1, 2011
• Allocated $10 billion for each 10-year
fiscal period beginning with 2011 through
2019.
30
Center for Medicare and Medicaid
Innovation (CMI) (cont.)
• Models include:
–
–
–
–
–
–
–
–
–
–
–
–
–
Medical homes
Alternative payment mechanisms
Coordinated care
Health IT
Medication management
Patient education
Integrated care for dual eligibles
Care for cancer patients
Post-acute care
Chronic care management
Collaboration among mixed provider types
Rural telehealth expansion
Development of a rapid learning network
31
National Pilot Program on Payment
Bundling
• Effective Date. January 1, 2013 and continuing
for five years thereafter unless extended.
• Pilot program. Encourages hospitals,
physicians, and post-acute providers to provide
integrated care during, and be jointly
accountable for an episode of care beginning
three days prior to, an inpatient admission and
continuing for 30 days following discharge.
• Providers will receive a bundled payment for
eight conditions selected by the Secretary.
32
National Pilot Program on Payment
Bundling
• The bundled payment will be comprehensive.
• Providers must submit quality measures, including, at a
minimum:
–
–
–
–
–
–
–
–
–
Measures of functional status improvement
Reduction in avoidable hospital readmissions
Rates of discharge to the community
Rates of admission to an emergency room after hospitalization
Incidence of health care acquired infections
Efficiency
Patient-centeredness of care
Patient perceptions of care
Other measures as determined by the Secretary
33
Gainsharing Demonstration Extension
• PPACA extends the gainsharing demonstration
authorized by the Deficit Reduction Act of 2005.
• This demonstration evaluates arrangements
between hospitals and physicians designed to
improve the quality and efficiency of care
provided to beneficiaries.
• PPACA continues the demonstration through
September 30, 2011.
• It also authorizes an additional $1.6 million in
2010 for carrying out the demonstration.
34
• Doctors can be frustrating. You wait a
month-and-a-half for an appointment, and
he says, "I wish you'd come to me sooner."
35