Accountable Care Organizations

1. Accountable Care Organizations Barbara McAneny MD

2. Is this an ACO?

3. What is an ACO? • » Legal entity through which the Affordable Care Act’s Shared Savings Program will be implemented • » Comprised of groups of eligible ACO participants (providers and suppliers) • » Work together to manage and coordinate care for Medicare Fee-For-Service beneficiaries • » Mechanism for shared governance that provides ACO participants with proportionate control over decision-making process

4. AMA Concerns • Opportunity for Small physician practices to participate • Explicit safe harbors • Appropriate Risk adjustment factors • Provide timely accurate data to physicians • Payment for phone calls, emails etc to give physician practices time to acquire needed infrastructure • Accurate payment projections

5. AMA Concerns • Available capital to build the systems • Fairly assign the patients to an ACO • Appropriate payment models • Partial capitation monthly • Virtual partial capitation • Medical home payment • Condition specific capitation

6. Who can be in an ACO? • » ACO professionals (physician (MD/DO), PA, NPs, CNS) in group practice arrangements • » Networks of individual practices of ACO professionals • » Partnerships or joint venture arrangements between hospitals and ACO professionals • » Hospitals employing ACO professionals • » Others the Secretary deems appropriate

7. Who are the patients of an ACO? • Assigned retrospectively by which primary care doctor did a pleurality of their care recently • Primary care doctors can only be in one ACO • Specialists can be in several ACOs • 5000 Medicare patients • Patient must be notified that doctors are in an ACO • Patients must not be restricted to the ACO

8. Who Governs an ACO? • » Shared decision-making for all ACO participants • » Medicare beneficiaries part of Governing Body • » GB is separate and unique to the ACO – except when ACO is an existing qualifying entity • » ACO participants must comprise 75% of GB • – Allows non-Medicare entities to comprise 25% • – Nod to providers who lack capital and infrastructure necessary to meet eligibility requirements; • » Each ACO participant must be represented on GB; together with beneficiary representation,

9. The ACO Contract • 3 years, penalty for early withdrawal • Either no risk first 2 years or risk all 3 years • 50% of savings for delayed risk participants • 60% of savings for immediate risk participants • CMS does not share first 2% of savings • Caps on losses • Risk withholds to fund possible losses

10. Shared Savings? • ACO that meets both quality performance standards and demonstrates achieved savings against benchmark of expected average per capita Medicare FFS expenditures will receive payment for shared Medicare savings.

11. Benchmark? • exceed a margin for normal changes in FFS expenditures from year-to-year • Surrogate measure of what the Medicare FFS Parts A and B expenditures would otherwise have been in the absence of the ACO.

12. Options for Calculating the Benchmark • Estimate benchmark from per capita Parts A and B FFS expenditures of beneficiaries who would have been assigned to the ACO in the 3 prior years. • CMS calculates per capita Parts A and B FFS expenditures during each of the 3 years immediately preceding year 1 of agreement for each beneficiary assigned to the ACO during the agreement period. • Includes risk adjustment

13. CMS/OIG Joint Notice of Proposed Waivers • Proposed waivers of certain laws with respect to certain financial arrangements: • – Certain laws: • • Stark Law • • Anti-Kickback Statute • • ‘Gainsharing’ CMP provision • – Certain financial arrangements: • • Distribution of shared savings • • Those that implicate & satisfy Stark Law exception

14. The Stark Law and ACOs • If hospital (or any DHS entity within ACO redistributes shared savings to referring physicians, the redistribution must either: • – satisfy an exception for direct compensation arrangements (e.g., bona fide employment, personal services, fair market value compensation); • or • – be subject to CMS’ proposed Stark Law waivers

15. Physician practice changes • Cannot change just for Medicare: but negotiation of payment rates with private payers may raise anti-trust concerns at the FTC • Must be able to share savings of Parts A, B and D, and inpatient and outpatient savings in commercial plans • Must be able to share savings with physicians in other practices

16. AMA recommendations: • Safe Harbors for Gainsharing consistant with OIG advisory opinion • CMS should establish a safe harbor for independent physicians who join together to achieve the minimum scale necessary to participate in the Medicare shared savings program • CMS should establish a safe harbor for "nonexclusive" ACOs that allow their members to contract with payers outside the ACO

17. AMA Recommendations: Safe harbors also are needed for innovative care delivery practices, such as physician practices that offer additional services to patients to improve quality and efficiency CMS should tailor payment changes to support changes in the delivery of care. Payment systems often do not let physicians make changes that result in higher-value care.

18. Concerns • How to accurately attribute patients to the ACO? • How to measure quality and determine if performance standard are met? • Will physicians be able to review or challenge data collections ?