Editor's note: This article by Tony Mira, president and CEO of Anesthesia Business Consultants, an anesthesia & pain management billing and practice management services company, originally appeared in Anesthesia Business Consultants eAlerts, a free electronic newsletter. Sign-up to receive this newsletter by clicking here.
CMS Selects 27 ACOs
CMS has announced the selection of the first 27 Accountable Care Organizations (ACOs) to participate in the Medicare Shared Saving Program. The 27 organizations have agreed to be responsible for improving care for nearly 375,000 beneficiaries in 18 states through better coordination of services among hospitals, physicians and other providers.
ACOs organize to achieve quality improvement and greater efficiency, with a goal of ensuring "that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. … When an ACO succeeds both in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program." (from the CMS ACO web page).
The ACOs selected will involve more than 10,000 physicians, 10 hospitals and 13 smaller physician-led organizations. More than half of the ACOs are being led by physicians, to the delight of the AMA and other medical associations that advocated for strong physician representation. There is not enough information available to determine whether and how anesthesiologists, nurse anesthetists and anesthesiologist assistants are included. The nature of the services provided in many of the ACOs requires anesthesia availability, but not necessarily anesthesia participation in the coordination of care and shared savings. If any of our readers are participating in one of the ACOs listed below, we would very much appreciate hearing from you.
1. Accountable Care Coalition of Caldwell County, LLC (NC)
2. Accountable Care Coalition of Coastal Georgia
3. Accountable Care Coalition of Eastern North Carolina, LLC
4. Accountable Care Coalition of Greater Athens, Georgia
5. Accountable Care Coalition of Mount Kisco, LLC (NY)
6. Accountable Care Coalition of the Mississippi Gulf Coast, LLC
7. Accountable Care Coalition of the North Country, LLC (NY)
8. Accountable Care Coalition of Southeast Wisconsin, LLC
9. Accountable Care Coalition of Texas, Inc.
10. AHS ACO, LLC (NJ)
11. AppleCare Medical ACO, LLC (CA)
12. Arizona Connected Care, LLC (AZ)
13. Chinese Community Accountable Care Organization (NY)
14. CIPA Western New York IPA, doing business as Catholic Medical Partners (NY)
15. Coastal Carolina Quality Care, Inc. (NC)
16. Crystal Run Healthcare ACO, LLC (NY and PA)
17. Florida Physicians Trust, LLC
18. Hackensack Physician-Hospital Alliance ACO, LLC (NJ)
19. Jackson Purchase Medical Associates, PSC (KY)
20. Jordan Community ACO (MA)
21. North Country ACO (NH)
22. Optimus Healthcare Partners, LLC (NJ)
23. Physicians of Cape Cod ACO (MA)
24. Premier ACO Physician Network (CA)
25. Primary Partners, LLC (FL)
26. RGV ACO Health Providers, LLC (TX)
27. West Florida ACO, LLC
Five of the 27 ACOs will participate in the Advance Payment ACO Model that CMS created after receiving negative feedback on the first proposed regulation setting the standards for the Shared Savings Program ACOs. The Advance Payment Model, as its name suggests, will allow rural and physician-led ACOs to receive payments up front to help with the costs of establishing the necessary infrastructure. CMS will seek to recoup the advances if the ACO does not participate for the full term on its agreement.
There are now 1.1 million Medicare patients enrolled in a Shared Savings Program initiative, including the 375,000 in the 27 ACOs. The average number of covered lives per ACO is 13,889, less than three times the required minimum. The range is from 5,000 to 70,000.
The balance of Medicare patients are in the 32 Pioneer Model ACOs that began in December 2011 and the six Physician Group Practice Transition Demonstration organizations named in January 2011. The Pioneers are organizations that already have significant experience with the delivery of coordinated care and that can assume greater risk than the newly-announced ACOs. One of the early leaders among the Pioneers is OSF Healthcare System (see Update on Hospital Mergers below). OSF has for a number of years promoted a collaborative approach to patient safety improvement. The Commonwealth Fund has published case studies of the OSF and nine other ACOs. As it states in its overview of OSF,
OSF has enhanced these efforts during the past five years by continuing to build awareness of safety risks through systemwide error reporting and local risk assessment, by identifying clinicians who can serve as models for their peers, and by engaging staff in intraorganizational learning and competition to spur improvement. It also has raised performance expectations by educating hospital- and system-level board members about patient safety issues and quality improvement techniques. Exemplary facility-level results include: an 80 percent reduction over six years in the rate of ventilator-associated pneumonia among intensive care patients; an increase from 39 percent to 100 percent in compliance with a standardized medication administration process; and a nine-percentage-point increase over one year in surgical patients receiving evidence-based treatment to prevent infections.
(S. Klein and D. McCarthy, OSF HealthCare: Promoting Patient Safety Through Education and Staff Engagement, The Commonwealth Fund, March 2011.)
CMS is now reviewing more than 150 applications from ACOs seeking to participate in the Medicare Shared Savings Program beginning on July 1, 2012. A third set will be announced for January 2013 starts. If past is prologue, most of these applications will be accepted; CMS has only rejected some four applications thus far.
Survey of Providers' ACO Perspectives and Plans
A total of 367 completed survey questionnaires are the basis for a new report from the Health Leaders Media Intelligence Unit entitled "The Unsettled State of the ACO." Compared to last year's survey, the 2012 results show fewer organizations interested in forming an ACO (private or Medicare), but those that are interested are moving quickly to have an operational organization.
Following are some of the survey results:
* 11 percent are part of an ACO now
* Of the 89 percent not already part of an ACO, 39 percent plan to join or implement an ACO in the future
o No single reason accounts for more than 25 percent of the reasons for lack of interest in an ACO. In descending order of selection as the "main" reason:
+ Too small to take lead
+ No strategic interest
+ Financial disadvantage
+ Lack of internal resources
+ Lack of partners
+ Waiting to be asked
* 47 percent of the organizations that are or plan to be part of an ACO estimate that they will have between 5,000 and 50,000 enrollees
o The top drivers for ACO creation are (more than one driver could be selected):
+ To engage physicians (56 percent)
+ Public and private payers shifting risk to providers (51 percent)
+ Market competition is driving integration (48 percent)
+ Desire for more resources for clinical integration (43 percent)
+ Value-based purchasing (43 percent)
o Factors with the potential to disrupt the success of the ACO, ranked from high to low:
+ The financial risk of inadequate payment rates
+ Physician resistance
+ Lack of a common EHR/IT system
+ The administrative costs of running an ACO
+ Lack of uniform healthcare quality and/or cost data
+ Lack of patient accountability
+ Shortage of primary care physicians
+ Federal anti-kickback and physician self-referral (Stark) laws
+ Payer resistance to new payment structures
+ Gatekeeper function
o Payment structure, actual or future
+ Pay for performance (50 percent)
+ Fee for service, with both shared gain and shared risk (44 percent)
+ Negotiated bundled payments (43 percent)
+ Fee for service, with shared savings (42 percent)
+ Full capitation (19 percent)
o ACO components planned for implementation
+ Care coordinators or nurse navigators (77 percent)
+ Medical home (72 percent)
+ Clinical pathways (69 percent)
+ Pay for performance (69 percent)
+ Disease registries (45 percent)
The relatively low interest in disease registries is puzzling, since, as one of the ACO presidents interviewed for the report said, "a disease registry is essential to successfully tracking the care of complex patients, assigning accountability to specific physicians, and measuring patient outcomes." Arguably maintaining or contributing data to an ACO-based disease registry could be a performance measure for hospitals and physicians.
The survey report and data offer guidance on issues that anesthesiologists should consider in planning to lead ACOs, such as perceptions of physician resistance, inadequate numbers of primary care physicians, and the level and type of local market competition driving integration.
"The Unsettled State of the ACO" was written before the United States Supreme Court spent three media-saturated days hearing arguments on the constitutionality of the Affordable Care Act, which launched the Medicare Shared Savings Program and gave further impetus to private-sector ACOs. The risk that the Act will be held unconstitutional does not seem to be an unsettling factor to executives involved in the Pioneer ACOs. In its April 10th article "ACOs Multiply as Medicare Announces 27 New Ones," Kaiser Health News quotes several Pioneer ACO leaders:
* "It's not changing anything for us. … This is a model of care we've been trying to evolve into since before the pioneer program existed."
* "ACOs will continue to be the model of the future, even if the Supreme Court strikes down the health care law. The private sector has been moving in the direction of coordinated care for years."
* "The positives are enough that regardless of whether or not there's a formal program, we'll continue working toward an ACO."
We said as much in our Alert discussing the Supreme Court proceedings.
UPDATE on HOSPITAL MERGERS (Alert, April 9, 2012)
In last week's Alert, we reported that a federal District Court in Illinois had granted the FTC a preliminary injunction against the planned merger of OSF Healthcare System and Rockford (Ill.) Health System because the merger might harm competition. The court announced its decision on April 5th, and the two health systems called off the deal a week later, saying that the prospect of a two-year legal battle was not worth it.
This confirms our view of FTC interest in horizontal mergers as having a chilling effect on such deals.
Recall that the merger would have reduced the number of hospitals in the relevant area from three to two. A three-to-two reduction is anathema to the FTC, according to antitrust attorneys.
Learn more about Anesthesia Business Consultants.
CMS Selects 27 ACOs
CMS has announced the selection of the first 27 Accountable Care Organizations (ACOs) to participate in the Medicare Shared Saving Program. The 27 organizations have agreed to be responsible for improving care for nearly 375,000 beneficiaries in 18 states through better coordination of services among hospitals, physicians and other providers.
ACOs organize to achieve quality improvement and greater efficiency, with a goal of ensuring "that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. … When an ACO succeeds both in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program." (from the CMS ACO web page).
The ACOs selected will involve more than 10,000 physicians, 10 hospitals and 13 smaller physician-led organizations. More than half of the ACOs are being led by physicians, to the delight of the AMA and other medical associations that advocated for strong physician representation. There is not enough information available to determine whether and how anesthesiologists, nurse anesthetists and anesthesiologist assistants are included. The nature of the services provided in many of the ACOs requires anesthesia availability, but not necessarily anesthesia participation in the coordination of care and shared savings. If any of our readers are participating in one of the ACOs listed below, we would very much appreciate hearing from you.
1. Accountable Care Coalition of Caldwell County, LLC (NC)
2. Accountable Care Coalition of Coastal Georgia
3. Accountable Care Coalition of Eastern North Carolina, LLC
4. Accountable Care Coalition of Greater Athens, Georgia
5. Accountable Care Coalition of Mount Kisco, LLC (NY)
6. Accountable Care Coalition of the Mississippi Gulf Coast, LLC
7. Accountable Care Coalition of the North Country, LLC (NY)
8. Accountable Care Coalition of Southeast Wisconsin, LLC
9. Accountable Care Coalition of Texas, Inc.
10. AHS ACO, LLC (NJ)
11. AppleCare Medical ACO, LLC (CA)
12. Arizona Connected Care, LLC (AZ)
13. Chinese Community Accountable Care Organization (NY)
14. CIPA Western New York IPA, doing business as Catholic Medical Partners (NY)
15. Coastal Carolina Quality Care, Inc. (NC)
16. Crystal Run Healthcare ACO, LLC (NY and PA)
17. Florida Physicians Trust, LLC
18. Hackensack Physician-Hospital Alliance ACO, LLC (NJ)
19. Jackson Purchase Medical Associates, PSC (KY)
20. Jordan Community ACO (MA)
21. North Country ACO (NH)
22. Optimus Healthcare Partners, LLC (NJ)
23. Physicians of Cape Cod ACO (MA)
24. Premier ACO Physician Network (CA)
25. Primary Partners, LLC (FL)
26. RGV ACO Health Providers, LLC (TX)
27. West Florida ACO, LLC
Five of the 27 ACOs will participate in the Advance Payment ACO Model that CMS created after receiving negative feedback on the first proposed regulation setting the standards for the Shared Savings Program ACOs. The Advance Payment Model, as its name suggests, will allow rural and physician-led ACOs to receive payments up front to help with the costs of establishing the necessary infrastructure. CMS will seek to recoup the advances if the ACO does not participate for the full term on its agreement.
There are now 1.1 million Medicare patients enrolled in a Shared Savings Program initiative, including the 375,000 in the 27 ACOs. The average number of covered lives per ACO is 13,889, less than three times the required minimum. The range is from 5,000 to 70,000.
The balance of Medicare patients are in the 32 Pioneer Model ACOs that began in December 2011 and the six Physician Group Practice Transition Demonstration organizations named in January 2011. The Pioneers are organizations that already have significant experience with the delivery of coordinated care and that can assume greater risk than the newly-announced ACOs. One of the early leaders among the Pioneers is OSF Healthcare System (see Update on Hospital Mergers below). OSF has for a number of years promoted a collaborative approach to patient safety improvement. The Commonwealth Fund has published case studies of the OSF and nine other ACOs. As it states in its overview of OSF,
OSF has enhanced these efforts during the past five years by continuing to build awareness of safety risks through systemwide error reporting and local risk assessment, by identifying clinicians who can serve as models for their peers, and by engaging staff in intraorganizational learning and competition to spur improvement. It also has raised performance expectations by educating hospital- and system-level board members about patient safety issues and quality improvement techniques. Exemplary facility-level results include: an 80 percent reduction over six years in the rate of ventilator-associated pneumonia among intensive care patients; an increase from 39 percent to 100 percent in compliance with a standardized medication administration process; and a nine-percentage-point increase over one year in surgical patients receiving evidence-based treatment to prevent infections.
(S. Klein and D. McCarthy, OSF HealthCare: Promoting Patient Safety Through Education and Staff Engagement, The Commonwealth Fund, March 2011.)
CMS is now reviewing more than 150 applications from ACOs seeking to participate in the Medicare Shared Savings Program beginning on July 1, 2012. A third set will be announced for January 2013 starts. If past is prologue, most of these applications will be accepted; CMS has only rejected some four applications thus far.
Survey of Providers' ACO Perspectives and Plans
A total of 367 completed survey questionnaires are the basis for a new report from the Health Leaders Media Intelligence Unit entitled "The Unsettled State of the ACO." Compared to last year's survey, the 2012 results show fewer organizations interested in forming an ACO (private or Medicare), but those that are interested are moving quickly to have an operational organization.
Following are some of the survey results:
* 11 percent are part of an ACO now
* Of the 89 percent not already part of an ACO, 39 percent plan to join or implement an ACO in the future
o No single reason accounts for more than 25 percent of the reasons for lack of interest in an ACO. In descending order of selection as the "main" reason:
+ Too small to take lead
+ No strategic interest
+ Financial disadvantage
+ Lack of internal resources
+ Lack of partners
+ Waiting to be asked
* 47 percent of the organizations that are or plan to be part of an ACO estimate that they will have between 5,000 and 50,000 enrollees
o The top drivers for ACO creation are (more than one driver could be selected):
+ To engage physicians (56 percent)
+ Public and private payers shifting risk to providers (51 percent)
+ Market competition is driving integration (48 percent)
+ Desire for more resources for clinical integration (43 percent)
+ Value-based purchasing (43 percent)
o Factors with the potential to disrupt the success of the ACO, ranked from high to low:
+ The financial risk of inadequate payment rates
+ Physician resistance
+ Lack of a common EHR/IT system
+ The administrative costs of running an ACO
+ Lack of uniform healthcare quality and/or cost data
+ Lack of patient accountability
+ Shortage of primary care physicians
+ Federal anti-kickback and physician self-referral (Stark) laws
+ Payer resistance to new payment structures
+ Gatekeeper function
o Payment structure, actual or future
+ Pay for performance (50 percent)
+ Fee for service, with both shared gain and shared risk (44 percent)
+ Negotiated bundled payments (43 percent)
+ Fee for service, with shared savings (42 percent)
+ Full capitation (19 percent)
o ACO components planned for implementation
+ Care coordinators or nurse navigators (77 percent)
+ Medical home (72 percent)
+ Clinical pathways (69 percent)
+ Pay for performance (69 percent)
+ Disease registries (45 percent)
The relatively low interest in disease registries is puzzling, since, as one of the ACO presidents interviewed for the report said, "a disease registry is essential to successfully tracking the care of complex patients, assigning accountability to specific physicians, and measuring patient outcomes." Arguably maintaining or contributing data to an ACO-based disease registry could be a performance measure for hospitals and physicians.
The survey report and data offer guidance on issues that anesthesiologists should consider in planning to lead ACOs, such as perceptions of physician resistance, inadequate numbers of primary care physicians, and the level and type of local market competition driving integration.
"The Unsettled State of the ACO" was written before the United States Supreme Court spent three media-saturated days hearing arguments on the constitutionality of the Affordable Care Act, which launched the Medicare Shared Savings Program and gave further impetus to private-sector ACOs. The risk that the Act will be held unconstitutional does not seem to be an unsettling factor to executives involved in the Pioneer ACOs. In its April 10th article "ACOs Multiply as Medicare Announces 27 New Ones," Kaiser Health News quotes several Pioneer ACO leaders:
* "It's not changing anything for us. … This is a model of care we've been trying to evolve into since before the pioneer program existed."
* "ACOs will continue to be the model of the future, even if the Supreme Court strikes down the health care law. The private sector has been moving in the direction of coordinated care for years."
* "The positives are enough that regardless of whether or not there's a formal program, we'll continue working toward an ACO."
We said as much in our Alert discussing the Supreme Court proceedings.
UPDATE on HOSPITAL MERGERS (Alert, April 9, 2012)
In last week's Alert, we reported that a federal District Court in Illinois had granted the FTC a preliminary injunction against the planned merger of OSF Healthcare System and Rockford (Ill.) Health System because the merger might harm competition. The court announced its decision on April 5th, and the two health systems called off the deal a week later, saying that the prospect of a two-year legal battle was not worth it.
This confirms our view of FTC interest in horizontal mergers as having a chilling effect on such deals.
Recall that the merger would have reduced the number of hospitals in the relevant area from three to two. A three-to-two reduction is anathema to the FTC, according to antitrust attorneys.
Learn more about Anesthesia Business Consultants.