Accountable Care Accountable Care Organizations Organizations

(ACOs), Part 2 of 3(ACOs), Part 2 of 3Migena PenoMigena Peno

Pharm.D. CandidatePharm.D. CandidateLECOM School of PharmacyLECOM School of Pharmacy

Three Core Principles of ACOs

1. Provider-led organizations

Jointly accountable for quality & total per capita costs across the full continuum of care

2. Reduced overall costs

Payments linked to quality improvements

3. Reliable & progressively more complex performance measurements supporting improvement in care

McClellan M, McKethan AN, Lewis JL, Roski J, Fisher ES (2010). A National Strategy to Put Accountable Care Into Practice. 29. pp. 982=990.

Medicare beneficiaries

Must be informed if their provider is part of ACO

Freedom to decline sharing of their personal health data within the ACO

Freedom to choose providers not participating in ACO without paying more

No restrictions on benefits No restriction on where to get their care or

which hospital to go Receiving higher quality care ACO providers are not held accountable if

patients receive most of their care from providers not participating in ACO

Gold J. Accountable Care Organizations, Explained. Kaiser Health News, NPR. Jan 18, 2011.

Sharing Savings Medicare still pays healthcare providers for specific

services based on the fee-for-service program In addition, a benchmark to measure performance

is developed by CMS & used to determine if ACOs should receive shared savings or punished for losses

ACOs would receive shared savings only when savings exceed minimum sharing rate set by CMS or medical expenditures are lower than benchmark

Amount of shared savings depends on whether quality performance standards are meet or exceeded

Accountable Care Organizations: Improving Care Coordination for People with Medicare. HealthCare.Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010

Medicare Shared Savings Program

Component of “Affordable Care Act”

Rewards ACOs if they lower health care cost growth & also meet performance standards on quality of care

Risk-sharing models

One-sided: Sharing only savings for 1st 2 years & savings & losses in 3rd year

Two-sided: Sharing savings & losses for all 3 years (Greater share of savings but higher risk of paying losses)

Accountable Care Organizations: Improving Care Coordination for People with Medicare. HealthCare.

Medicare Shared Savings Program

One-sided risk model:

Eligible for shared savings if quality measures are met & expenditures less than target amount

No penalization if no savings are achieved

Full payment is received by Medicare based of fee-for-service payment system but no shared savings

Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010MedPAC has analyzed issues associated with risk sharing and the implications of varying sizes of ACOs. See Medicare Payment Advisory Commission, Transcript of Public Meeting, September 13, 2010, http://www.medpac.gov/ transcripts/913-914MedPACfinal.pdf.

Medicare Shared Savings Program

Health care providers must participate for at least 3 years in the ACO program

Two-sided risk-sharing model:

95% fee-for-service payment paid now + (5% withhold + shared savings paid later if quality & target spending reached)

Capitation: Fixed payment amount per person to cover all care required to be provided

Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010MedPAC has analyzed issues associated with risk sharing and the implications of varying sizes of ACOs. See Medicare Payment Advisory Commission, Transcript of Public Meeting, September 13, 2010, http://www.medpac.gov/ transcripts/913-914MedPACfinal.pdf.

Medicare Shared Savings Program

One-sided risk-sharing model: Minimal requirement Reporting basic set of performance measures

based on administrative data Establishing a legal practice entity Plan for transition between inpatient &

outpatient care Sufficient number of primary care physicians

to meet required minimum number of patients per performance measurement

Shortell S, Casalino L. Implementing Qualifications Criteria and Technical Assistance for Accountable Care Organizations. JAMA May 5, 2010- Vol 303, No. 17

Medicare Shared Savings Program

Two-sided risk-sharing model, includes all requirements for one-sided model plus: More comprehensive performance

measures including: Expanded Patient Experience Measures & Clinical Performance for Individuals with Chronic Disease like asthma, DM, & CHF

More stringent standards for financial reporting including: Financial Projections & Minimum Cash Reserve

Shortell S, Casalino L. Implementing Qualifications Criteria and Technical Assistance for Accountable Care Organizations. JAMA May 5, 2010- Vol 303, No. 17

Medicare Shared Savings Program

Goals: Better care Improved population-wide health Reduced Medicare Part A & B spending

through changes in healthcare delivery system (done by encouraging development of ACOs)

Includes 33 measures focusing on: patient/caregiver experience (7), care coordination & patient safety (6), preventive health (8), & at risk populations (12)

Centers for Medicare & Medicaid Services. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. 42 CFR Part 425. Final Rule.