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Getting Ready For Healthcare Reform
How Can We Be An Accountable Care
Organization (If We Aren’t Already)?
June 17, 2010
Presented by
Lori H. Spencer
Smith Moore Leatherwood LLP
Atlanta, GA
lori.spencer@smithmoorelaw.com
To ask a question during the presentation, click the Q&A menu at the top of this
window, type your question in the Q&A text box, and then click “Ask.”
After you click Ask, the button name will change to “Edit.” Questions will be
queued and most will be answered at the end of the meeting as time allows.
© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
The topic today is about healthcare
delivery and payment reform.
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Why is Reform Needed?
• Reason: current payment systems have produced
fragmented healthcare delivery.
• Rather than disincentives for over use, volume and
intensity drive payment now.
• The incentive now: more care without necessarily
worrying about quality.
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New buzz word: “systemness”,
or, lack there of, in U.S. healthcare
delivery produces lack of coordination.
With lack of coordination
comes lower quality.
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Accountable Care Organizations (“ACOs”) have
the potential to change how healthcare is
delivered and paid for.
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And ACOs are officially part of Medicare as a result of the
Patient Protection and Affordable Care Act (“Reform Act”).
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Overview
1.
Other payment reforms.
2.
Putting ACOs in a payment reform context.
3.
ACO basics.
4.
How does any of this apply to you?
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Two Overarching Goals
1. Where do/could you fit in?
2. What should you do and when?
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Part III of the Reform Act
“Encouraging Development
of New Patient Care Models”
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Section 3021. Establishment of Center for
Medicare and Medicaid Innovation (“CMI”) within
CMS.
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Purpose: Test innovative payment and service delivery models to reduce
Medicare and Medicaid expenditures, while preserving or improving the
quality of care.
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Preference in testing models is to be given to models that improve the
coordination, efficiency and quality of healthcare services.
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CMI is to be carrying out its duties by not later than January 1, 2011.
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Note: CMI’s activities cover only Medicare Parts A and B, and Medicaid.
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CMI will test models where there is evidence
the model addresses a defined population for
which there are deficits in care leading to
poor clinical outcomes or potentially avoidable
expenditures.
Specific “opportunities” or models with
the potential for testing by CMI are
described in the Reform Act.
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Models:
Patient centered medical homes (for high need individuals)
Medical homes addressing needs unique to women
Global or salary based payment in primary care
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Models:
Care coordination between providers of services
and suppliers that transition providers away from
fee-for- service based reimbursement and toward
salary based payment.
Community based health teams supporting small
practice medical home with focus on chronic care
management.
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Models:
Continuing care hospitals offering in-patient rehab, long
term care, and home health or skilled nursing care during
an in-patient stay and the 30 days immediately following
discharge
Home health providers offering chronic care management
via interdisciplinary teams
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Models:
Collaborative of high quality, low cost healthcare
institutions responsible for:
Developing, documenting, disseminating, and
implementing best practices and
Providing assistance to other healthcare institutions
in doing the same.
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More models:
Facilitate in-patient care,
including intensive care, at local
hospitals, through the use of
electronic monitoring by
specialists based at integrated
health systems.
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More models:
Allowing states to test and
evaluate systems of allpayer payment reform for
residents of the state,
including dual eligibles.
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Other Attributes of Pilot
Models:
Patient centeredness
Use of technology, such as
EHR and remote monitoring
systems
Use of care coordinators
Team based approach
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The Context for ACOs
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What is an ACO?
Common attributes:
• Provider led
• Accountable for
(i) Improved quality
(ii) Reduced healthcare spending growth
• For a defined group of patients
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Reform Act sets out basic ACO
characteristics, including specifying
that an ACO will be a “group of
providers of services”.
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Eligible Groups Under the Reform
Act are defined broadly to include:
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Group practices
Networks of individual practices
Partnerships or Joint Ventures
Hospitals employing physicians
Other groups as determined by the Secretary of HHS
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Other fundamental qualifications
under Reform Act:
• Shared governance
• Formal legal structure
• Sufficient Primary Care Providers
• At least 5,000 patients
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How will patient population be
determined?
• As mentioned, the Medicare ACO program
applies only to Medicare Parts A and B
• Patients will be “assigned” to an ACO
based on previous selection of a provider
who is participating in an ACO
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How will ACOs change
delivery?
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Evidence based medicine
Coordination of care
Focus on clinical outcomes
Patient and caregiver “experience of care”
Information technology/EHR
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How will Medicare ACOs
change payment models?
• Initially, Medicare ACOs will be eligible to participate in “shared
savings” programs
• Providers will continue to be paid on FFS basis, but the ACO will be
eligible to receive a portion of shared savings
• Requirement for formal legal structure is that the ACO will be
permitted, legally, to distribute these shared savings payments
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How will shared savings be
determined?
• Secretary of HHS will set benchmark for each ACO based on the
most recent three years of per beneficiary expenditures for those
beneficiaries assigned to the ACO
• Secretary will set target percentage below, and ACO must achieve
estimated average per capita Medicare expenditures at or below this
target.
• If ACO accomplishes this, it becomes entitled to receive a
percentage of the difference (Secretary of HHS sets percentage
amount)
• ACO participants will enter into a three year contract with the
Medicare program to participate in the shared savings program
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Section 10307 of the Reform Act expands payment models
for ACOs to include partial capitation models or other
models the HHS Secretary concludes will improve the
quality and efficiency of delivery of healthcare services by
the ACO.
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Legal Issues and Waiver Authority
Given the nature and purpose of ACOs, a variety of financial
relationships will be involved, and, therefore, certain legal issues
require consideration. These include:
– Anti kickback statute
– Stark law
– Civil monetary penalties law
– Anti-trust laws
– Tax-exemption laws
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Most Recent Development
CMS office of legislation posted
“Preliminary Questions & Answers”
about ACOs on the CMS website.
https://www.cms.gov/OfficeofLegislation/Downloads/
AccountableCareOrganization/.pdf
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Special CMS Open Door Forum on
Accountable Care Organizations
June 24, 2010
2 – 4 p.m. ET
Conference call only
Participation Instructions:
Dial: 1-800-837-1935
Conference ID: 82156293
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CMS is seeking stakeholder input on topics
including:
• Joint accountability among providers in the formation and use of
ACOs
• Cost and quality measures to assess performance
• Risk adjustment
• Attribution of Medicare beneficiaries to ACOs
• Benchmarks for purposes of defining shared savings
• Coordination with other value-based purchasing initiatives
• Medicare beneficiary protections
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Private Payers:
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Private insurance companies are pressing ahead with ACO related activities
and not waiting for CMS.
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Several pilots, in various stages of development, are launching soon.
•
Engelberg Center for Healthcare Reform at Brookings Institution and the
Dartmouth Institute for Health Policy and Clinical Practice (BrookingsDartmouth Program) are supporting several pilots.
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Where do you fit in?
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
What should you be doing now?
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
QUESTIONS?
Lori H. Spencer
Smith Moore Leatherwood, LLP
Atlantic Center Plaza
1180 W. Peachtree St. NW, Suite 2300
Atlanta, GA 30309-3482
T: 404.962.1013
lori.spencer@smithmoorelaw.com
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.