Transcript Slide 1

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Accountable Care Organizations
Preliminary Look at Proposed Regulations
Oregon State Bar Health Law Section
Brown Bag Lunch Discussion
June 10, 2011
Peter D. Ricoy
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
Basis of presentation
• CMS published proposed rule in federal register
Thursday April 7, 2011.
• Focus is on ACO organizational requirements
• Not covered: fraud & abuse, antitrust waivers, IRS
guidance, Pioneer Model
• Final rules to be issued in the future means content in
this presentation will be stale in future.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Outline
1.
2.
3.
4.
5.
6.
Background of ACO Program
ACO Requirements
Quality Measures
Savings
Oregon CCO Concept
Discussion
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
General Advice Hypotheticals
You are an attorney in private practice approached by each
of the following wanting to know: “There was a news
article about ACOs. Should I be doing something?”
• Physician Group
• Hospital
• Health Plan
• Director of State’s Medicaid Program
• Chair of State Workers Benefits Board
• Physical Therapy Practice
• Self-Funded ERISA Plan
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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General Advice Hypotheticals
• Chiropractor
• National Dental Practice
• Naturopath
• OIG Investigator
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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General Advice Hypotheticals
You are an attorney in private practice approached by each
of the following wanting to know: “Is it a good idea for me
to form or join an ACO or CCO?”
• Small Group, 3 Physician Primary Care Practice
• Specialty 5 Physician Orthopedic Surgeons
• Large Multispecialty Physician Clinic 150 physicians,
including primary care, dominant in a geographic area
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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General Advice Hypotheticals
• Large multispecialty clinic, 150 physicians, no-primary care
• Large Single Specialty Group of 50 Radiologists
• Large Hospital in Urban Area, many employed physicians
• Large Hospital in Urban Area, no/limited employed physicians
• Only Hospital in rural county, no employed physicians
• Staff-Model HMO-style Health Plan
• PPO Health Plan – Network only
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Background: Basis for Shared
Savings Program?
• Section 3022 of PPACA added section 1899 of Social
Security Act to promote accountability for a patient
population under Parts A and B;
• Program required to be established by January 1, 2012;
• On November 10, 2010, CMS published a request for
information (RIF) regarding accountable care
organizations.
Reference: 76 FR 19531
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Background: Why do we Need ACOs?
Current medical system:
–
–
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Fragmented services across providers;
Little coordination of care;
Pays for units of service rather than outcomes; and
Holds no one organization or individual responsible for
either the quality or cost of care.
Reference: Congressional Research Service, “Accountable Care Organizations and the Medicare
Shared Savings Program”, David Newman, November 4, 2010.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Background: Estimated Impact of ACOs
Congressional Budget Office Estimated ACO Program
– Reduce Medicare expenditures $4.9 billion over the 6
year period.
– After two years, 20% of fee-for-service Medicare
beneficiaries would be assigned to participating
primary care physicians.
– By 2019, 40% would be assigned.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Background: Key Definitions
“ACO Professional”
Physician
Physician Assistant
Nurse Practitioner
Clinical Nurse Specialist
“ACO Participant”
ACO Provider (e.g. hospitals & others)
“ACO Provider”
ACO Supplier (e.g. physicians, & others)
Hospital
Skilled Nursing facility
Home Health Agency
Hospice
Others
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Background: Who can be an ACO?
5 Categories:
1. ACO professionals in group practices
2. Networks of individual practices of ACO professionals
3. Partnerships or joint venture arrangements between
hospitals and ACO professionals
4. Hospitals employing ACO Professionals
5. Other groups or providers and suppliers determined
by CMS
Reference: SSA Sec. 1899(b)
Bend, OR
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Portland, OR
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Seattle, WA |
Vancouver, WA
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Emphasis on Physicians
“The emphasis is on physicians rather than
insurers or hospitals since physicians ‘control
(directly or indirectly) 87% of all personal
health spending.’”
- CRS Report
Reference: Congressional Research Service, “Accountable Care Organizations and the Medicare
Shared Savings Program”, David Newman, November 4, 2010.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
What is an ACO?
• Legal entity
• Comprised of eligible “ACO Participants”
• Manage and Coordinate Care for Medicare feefor-service beneficiaries
• Establish mechanism for shared governance
Reference: Proposed 42 CFR 425.4
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Provider Payments Continue as Usual
Payments continue to be made to providers of services and
suppliers participating in an ACO under original Medicare
FFS program under Parts A and B in the same manner they
would otherwise be made, except that a participating ACO is
eligible for shared savings payment.
Reference: Section 1899(d)(a)(A) of SSA; 76 FR 19532, 19602,
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Portland, OR
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Salem, OR
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Vancouver, WA
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Assignment of Beneficiaries
‘‘(c) ASSIGNMENT OF MEDICARE FEE-FOR-SERVICE
BENEFICIARIES
TO ACOS.—The Secretary shall determine an appropriate
method to assign Medicare fee-for-service beneficiaries
to an ACO based on their utilization of primary care
services provided under this title by an ACO professional
described in subsection (h)(1)(A).
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Retrospective Beneficiary Assignment
• Beneficiaries are assigned to an ACO based on their
utilization of primary care services by a ACO-affiliated
primary care physician
• CMS will add up the total allowed charges for primary
care services for each beneficiary for each ACO, and
assign a beneficiary based on where beneficiary received
a “plurality” of services.
• Neither primary care providers nor specialists know
whether a particular patient at treatment point is in ACO
or not.
Reference: Proposed 42 CFR 425.6.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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How does an ACO qualify for a
Shared Savings payment?
3 Key Requirements

Maintain ACO eligibility requirements

Meet quality performance standards

Exceed minimum savings rate
Reference: Proposed 42 CFR 425.5(2)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Legal Entity Requirements
• State law recognized legal entity
• Perform key functions:
– receiving and distributing shared savings
– repaying losses
– meeting reporting requirements
– ensuring ACO participants comply requirements
• Unique TIN
• Not necessarily enrolled in Medicare; not necessarily
licensed to practice medicine or provide clinical services
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Governance
ACO’s governing body:
• Must have adequate authority to execute ACO functions
• Must accept responsibility for administrative, fiduciary,
and clinical operations.
• Must be comprised of:
– ACO participants or representatives
– Medicare beneficiary representatives
Reference: Proposed 42 CFR 425.5(8)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Governance (Continued)
• At least 75% control of the ACO’s governing body must
be held by ACO participants.
– Comment: Leaves open possibility that 25% could be in control of
health plan or management company.
• Each ACO participant must choose appropriate
representative and have “appropriate proportionate
control” over governing body decision making.
• Governing body must be separate and unique to ACO in
cases where the ACO comprised multiple otherwise
independent entities
Reference: Proposed 42 CFR 425.5(8)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
Can Existing Boards Qualify?
“If the ACO is comprised of a single entity that is
financially and clinically integrated, and if at least
75 percent control of the entity’s governing body
is comprised of representatives of the entity, the
ACO governing body may be the same as the
governing body of that entity, provided it satisfies
the other requirements of this section”
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Leadership
• Must be managed by executive whose
appointment and removal are under
control of governing body.
• Must have leadership team that has
“demonstrated ability to influence or
direct clinical practice to improve
efficiency processes and outcomes”.
• Must have full-time senior medical
director who is board-certified physician
and on location.
Reference: Proposed 42 CFR 425.5(9)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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ACO Qualification Requirements
• Clinical Integration. Must have a “meaningful commitment” to the
ACO’s clinical integration program to ensure likely success.
– ACO participants have a meaningful financial or “human” investment in
the ACO to motivate appropriate behaviors
•
Quality Assurance. Physician-directed quality assurance and
process improvement committee must oversee program that
established internal performance standards for quality, cost, and
outcomes.
• Evidence-Based Medicine. Must implement program to promote
evidence-based medical practice or clinical guidelines.
• Marketing Guidelines. All ACO marketing communications get
approved prior to us.
Reference: Proposed 42 CFR 425.5(9), (4)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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ACO Qualifications (Continued…)
• Participant Agreement. Participants must agree to comply with
guidelines and process, and ACO must have ability to expel those
not meeting requirements.
• Infrastructure & IT. Must be able to collect and evaluate data and
provide report cards to participants.
• Compliance Plan. Must have a designated compliance official (not
legal counsel). Comply with False Claims Act, anti-kickback statute,
physician self-referal law, civil monetary pentalies law.
• Sufficient Number of Beneficiaries and Providers. ACO must
have an assigned population of 5,000 or more beneficiaries and a
sufficient number of primary care physicians to support that
population.
Reference: Proposed 42 CFR 425.5(9), (10)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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ACO Qualifications Continued ….
• Proof of Patient-Centered Focus. ACO must provide
documentation of plans to:
– Promote evidence-based medicine
– Promote beneficiary engagement
– Internally report quality and cost
– Coordinate care
– Conduct CAHPS survey
– Promote patient involvement in governance
– Implement process for evaluating population health needs
Reference: Proposed 42 CFR 425.5(15)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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ACO Qualifications (Continued…)
• Proof of Patient-Centered Focus. ACO must provide
documentation of plans to:
– Communicating clinical knowledge in “a way that is
understandable to them” (plain English? Plain Spanish?)
– Process for beneficiary engagement and shared decision-making
that takes into account the beneficiaries’ “unique needs,
preferences, values and priorities.”
– Standards in place for beneficiary access and communication
– Processes for measuring clinical or service perforance by
physicians and using these results to improve care and service
over time.
Reference: Proposed 42 CFR 425.5(15)
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
ACO Qualifications Continued ….
• Distribution of Savings. A description of how it plans to
distribute savings, achieve specific goals, and achieve
better care, better health, and lower costs.
• Three-Year Agreement. Can elect for “Track 1”, onesided model for savings, or “Track 2” for two-sided.
• Reinsurance. ACO must obtain reinsurance, place
funds in escrow, surety bonds, or line of credit to ensure
repayment of losses under “Track 2”
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
www.schwabe.com
Quality Measures
• CMS selects the measures designated to determine an
ACO’s success in promoting:
–
better care for individuals
–
better health for populations
–
lower growth in expenditures
• CMS selects the quality performance standards
• ACOs must submit data on the measures according to
method established by CMS.
Reference: Proposed 42 CFR 425.9.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Quality Measures
1.
Patient/caregiver experience (7 measures)
2.
Care coordination (16 measures)
3.
Patient safety (2 measures)
4.
Preventative health (9 measures)
5.
At-risk population/frail elderly health (31 measures)
Reference: Proposed 42 CFR 425.10 and 76 FR 19571-19591.
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Quality Measures
Patient / Caregiver Examples
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How well doctors communicate
Helpful, courteous, respectful staff
Getting timely care, appointments and information
Patients’ rating of doctor
Bend, OR
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Quality Measures
Care Coordination Examples
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Hospital readmission rate within 30 days of discharge
Hospital discharge rate -- diabetes complications
Hospital discharge rate – congestive heart failure
% of physicians meeting HITECH “Meaningful Use”
% of PCPs who are electronic prescribers
Bend, OR
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Portland, OR
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Vancouver, WA
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Quality Measures
Patient Safety Examples
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Foreign object retained after surgery
Falls and trauma
Accidental puncture or laceration
Blood Incompatibility
Poor Glycemic Control
Bend, OR
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Portland, OR
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Vancouver, WA
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Quality Measures
Preventive Health Examples
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Influenza Immunization
Pneumococcal Vaccination
Mammography Screening
Cholesterol Management
Blood Pressure Measurement
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Quality Measures
At Risk Population Examples
– Diabetes: Aspirin Use, Tobacco Non-Use, Foot Exam
– Heart Failure: Weight Measurement, Beta-Blockers
– Coronary Artery Disease: Oral antiplatelet therapy,
cholesterol, ACE Inhibitor
– Hypertension: Blood Pressue & Plan of Care
– Frail Elderly: Osteoporosis management, INR testing
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Calculating Quality
• CMS Defines:
– Minimum attainment level
– Performance benchmark
• Each 5 domains is equally weighted
• All measures within a domain must have a score above
minimum attainment for the domain to be scored
• If ACO satisfied the quality performance standards for
one or more domains and savings, ACO may receive a
proportion of shared savings.
• CMS retains audit rights
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Savings
• Track 1
– One-sided risk during first two years
– Two-sided risk during third year
– Two-sided risk thereafter
• Track 2
– Two-sided risk from start and going forward
Reference: Proposed 42 CFR 425.10 and 76 FR 19571-19591.
Bend, OR
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Vancouver, WA
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Savings
Establishing Expenditure Baseline.
– CMS identifies beneficiaries that would have been assigned to
the ACO in most recent 3-year period.
– Adjust for health status using “CMS-Hierarchical Condition
Categories”.
– Truncate per capita expenditures at 99th percentile to eliminate
large claim variations.
– Expenditures would be indexed using Medicare growth rates
based on national spending growth levels (not local).
– Adjustments for “minimum savings rates” to reduce random
fluxuations based on the size of the ACO
– 6-Month runout period
Bend, OR
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Portland, OR
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Seattle, WA |
Vancouver, WA
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Savings (Continued)
• One-Sided Risk:
– ACO receives up to 50% of Savings
– Cap of 7.5%
• Two-Sided Risk:
– ACO receives up to 60% of Savings
– Cap of 10%
Bend, OR
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Portland, OR
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Seattle, WA |
Vancouver, WA
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ACO vs HMO Key Differences
• Patient’s Perspective: No Gatekeeper: Can still go to any
Provider inside or outside of network.
• Provider’s Perspective: No Capitated Payments:
payments based on quality and savings
Bend, OR
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Vancouver, WA
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Oregon’s Coordinated Care Organizations*
* Based on Proposed Legislation, HB 3650
Bend, OR
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Oregon “Coordinated Care Organizations”
– Big Picture
• CCOs are a legislative concept passed by Oregon
Special Joint Legislative Committee (HB 3650).
• Intent is to creates a new and integrated health care
delivery system for the Oregon Health Plan
• Replace current system of managed care orgainizations
• Federal waiver to address “dual eligibles” (Medicare /
Medicaid).
• Coordinates / integrates care among physical health,
mental health, chemical dependency and dental health
providers.
Bend, OR
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Vancouver, WA
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Oregon CCOs – Big Picture
• “Global Budget” for each CCO.
• Significant rulemaking required; in the interim, the
authority “shall renew” the contracts of prepaid managed
care health services organizations
• In any area of the state where CCO not certified, OHA
continues to contract with managed care organization
• OHA may amend current contracts to allow prepaid
managed care health services organizations that meet
the criteria to become CCOs.
Bend, OR
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Portland, OR
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Vancouver, WA
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CCO Organizational Requirements
Oregon Health Authority to adopt by rule criteria for CCO.
• CCO may be a single corporate structure or a network of providers
organized through contractual relationships.
• CCO must either be:
(1) community-based organization; or
(2) statewide organization with community-based participation in
governance; or
(3) any combination of the two.
• “Community” means groups within geographic area served by CCO
& includes groups by age, ethnicity, race, economic status or other
characteristic that may impact health care delivery
Bend, OR
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CCO Organizational Requirements
Governance Structure Must Include:
1. Consumers of CCO Services;
2. Persons that Share in the Financial Risk of the CCO;
3. Major “Components” of health care delivery system;
and
4. Community at large.
CCO must convene a community advisory council, including
community and county government representatives to
“ensure” health care needs are being met
Bend, OR
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Seattle, WA |
Vancouver, WA
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CCO Global Budget
• Each CCO will have a fixed, global budget -- a total
amount established prospectively by OHA to deliver care
to all CCO members;
• OHA to develop global budgeting process;
• Legislative Fiscal Office not quantify fiscal impact yet;
news reports of savings in the second year of around
$500 million in total funds;
• OHA to adopt a rule with safeguards to protect against
underutilization & service denials
• Members and providers may appeal denials under
contested case hearings
Bend, OR
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Vancouver, WA
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CCO Payment Mechanisms
OHA to “Encourage” CCO reimbursement (within the CCO
system) methodologies:
1. Reimburse on outcomes and quality;
2. Hold providers responsible for efficiency;
3. Reward good performance;
4. Limit medical cost inflation;
5. Promote prevention, person-centered care such as use
of primary care homes;
6. No reimbursement of never events;
7. Transitional provisions for rural hospitals.
Bend, OR
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Network Issues
• Members required to use CCO if available
• Members have a choice of providers within network
• Should Include providers of specialty care
• A “health care entity” may not unreasonably refuse to
contract with an organization seeking to form CCO if
participation necessary to qualify as CCO
• A health care entity that unreasonably refuses to contract
with a CCO may not receive fee-for-service
reimbursement from the authority for health services that
are available through CCO
• Providers may participate in multiple CCOs
Bend, OR
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CCO Quality Measures
• OHA to develop outcome and quality measures
• Must include ambulatory care, inpatient care, chemical
dependency and mental health treatment, oral health care and
other services
• Must include demographic variables including race and ethnicity
• Incorporate measures into contracts to “hold the organizations
accountable for performance and customer satisfaction”
• Information must be published, including quality measures,
costs, outcomes, and other information necessary to evaluate
value of CCO
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List of Qualifications & Aspirations
• Members have relationship with a stable team of
providers responsible for comprehensive care provided;
• Supportive and therapeutic needs of each member are
addressed in a holistic fashion using patient centered
primary care homes and individualized care plans;
• Transitional care when entering and leaving an acute
care or long term care facility;
• Members receive navigational assistance through
certified health care interpreters, community health
workers, and personal health navigators;
Bend, OR
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Vancouver, WA
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List of Qualifications & Aspirations
• Services geographically located as close to
where members reside as possible;
• CCO uses health information technology to link
services and providers across the continuum of
care;
• CCO prioritized working with members who have
high health care needs, multiple chronic
conditions, mental illness or chemical
dependency;
Bend, OR
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List of Qualifications & Aspirations
• Providers work together to develop best practices for care and
service to reduce waste and improve the health and well-being of
members;
• Educated about the “integrated approach”
• Emphasize prevention, healthy lifestyle choices, evidence-based
practices, shared decision-making
• Each member must be encouraged to be an “active partner” in
directing the member’s health care and services;
• Members family should receive timely, complete and accurate
information to participate in care and to have family knowledge,
values, and cultural backgrounds respected
Bend, OR
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Portland, OR
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Vancouver, WA
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List of Qualifications & Aspirations
• Members must have access to competent advocates and
assistance that is “culturally appropriate”
• Must implement patient centered primary care homes &
require providers to communicate and coordinate using
electronic health information technology
Bend, OR
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Portland, OR
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Salem, OR
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Vancouver, WA
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Other
• Antitrust: Intent to use State Action Doctrine to provide
immunity from federal anti-trust laws;
• Study defensive medicine and make recommendations
regarding caps on medical liability damages
Bend, OR
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Portland, OR
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Salem, OR
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Seattle, WA |
Vancouver, WA
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Discussion ….. Please Share Your Ideas!
Bend, OR
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Perspectives….(Big Picture)
Kathleen Sebelius
“The Affordable Care Act is putting patients and their
doctors in control of their health care,” said HHS
Secretary Kathleen Sebelius. “For too long, it has been
too difficult for health care providers to work together to
coordinate and improve the care their patients receive.
That has real consequences: patients have gaps in their
care, receive duplicative care, or are at increased risk of
suffering from medical mistakes. Accountable Care
Organizations will improve coordination and
communication among doctors and hospitals, improve
the quality of the care their patients receive, and help
lower costs.”
Reference: http://www.hhs.gov/news/press/2011pres/03/20110331a.html
Bend, OR
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Perspectives….(Big Picture)
Michael F. Cannon, Director of Health Policy Studies at the Cato
Institute
“Medicare's idea of encouragement is this: If doctors and hospitals
invest substantial resources to form an ACO, and better care
coordination reduces the amount they bill Medicare, then the ACO
will get to keep part of the savings.
"Here's a flash for the policy wonks pushing ACOs," writes industry
expert Robert Laszewski. "They only work if the provider gets paid
less for the same patient population. Why would they be dumb
enough to voluntarily accept that outcome?“”
Reference: Michael F. Cannon, “ACO Debacle Exposes Obamacare's Fatal Conceit (Guest Opinion)”,
Kaiser Health News, June 3, 2011.
http://www.kaiserhealthnews.org/Columns/2011/June/060311cannon.aspx
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Will Private Industry Follow CMS’ lead?
• Hospital DRG reimbursement started out as a
CMS payment policy.
• Physician PPS started out as CMS payment
policy.
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Several National Health Plans Have
Announced Commercial ACOs …..…
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Cigna
Aetna
Humana
United Healthcare
Anthem Blue Cross Blue Shield
… Will Oregon Health Plans Follow?
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Perspectives…..(Risk Models)
American Medical Association:
“The AMA urges CMS to provide a payment option that
includes shared savings only (“one-sided risk”) without
the mandatory shared loss provision. We believe an
option allowing ACOs to receive shared savings, without
the down-side risk, will encourage participation by a
greater variety of physician practices.”
Reference: AMA letter to Donald Berwick, June 3, 2011.
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Perspectives ….(Complexity)
American Medical Group Association:
Without dramatic changes to the proposed rule, it is our considered
opinion that ACOs will be unsuccessful from inception and that the
best opportunity for health care delivery reform in decades, and its
potential for attendant improvements in care for millions of
Americans, may be lost….
Determining attractiveness of ACO participation is a function of the sum
of all of the requirements and conditions of participation measured
against the likelihood of financial benefit, assessed in the context of
meshing program and institutional goals. CMS has created a design
specification encompassing onerously complex application and
participation requirements coupled with unbalanced risk/reward
criteria, that disadvantages ACO entities.
Reference: AMGA letter to Donald Berwick, June 6, 2011.
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Perspectives…..OR & WA
Oregon Association of Hospitals and Health Systems:
“Our key concern is that the proposed rules places
handicaps on low cost states like Oregon that have a
track record of providing care to Medicare beneficiaries at
costs lower than the national average. This proposed
rule sets a lower expenditure benchmark for low-cost
regions like ours which will limit the achievable shared
savings and increase the risk of exceeding the
benchmark. We propose a methodology which would be
equitable to states like Oregon and would not penalize
them for historically keeping Medicare costs down. We
suggest that CMS develop a “low-cost state reward
multiplier.”
Reference: OAHHS letter to Donald Berwick, June 3, 2011.
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Perspectives … OR & WA
Washington State Hospital Association
We are concerned that many providers in Washington State have
already taken significant steps to reduce cost and unnecessary
services. Many providers in our state have lower utilization rates,
when adjusted for acuity, than their counterparts in other areas of the
country. These more efficient, less costly providers should not be
disadvantaged when calculating shared savings payments. It is
potentially more difficult for providers with lower overall costs per
beneficiary to achieve significant savings in upcoming time periods.
CMS should create a shared savings model that also incentivizes more
efficient, less costly providers to become an ACO. If the shared
savings model does not take lower baseline spending into
consideration, more efficient providers may not participate
Reference: WSHA letter to Donald Berwick, December 3, 2010.
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Perspectives…(Assignment)
American Medical Association:
“The AMA urges CMS to adopt a more flexible approach to
beneficiary assignment to an ACO….We urge that
instead of retrospective attribution, CMS should adopt a
prospective approach that allows patients to volunteer to
be part of the ACO and permits the ACOs to know upfront those beneficiaries for whom the ACO will be
responsible.”
Reference: AMA letter to Donald Berwick, June 3, 2011.
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Perspectives …(Assignment)
American Medical Association
Consequently, CMS should seek to maximize the extent to
which an ACO is held accountable only for those patients
who voluntarily choose its physicians to provide or
manage their care, and who are willing to allow the ACO
to access data about the patients’ services. It should also
seek to minimize or eliminate the use of statistical
attribution methodologies, particularly retrospective
attribution, after care has already been delivered. At a
minimum, CMS should create one payment option that
allows beneficiaries to elect participation in an ACO and
makes ACO-related payments based only on the
beneficiaries who make that election.
Reference: AMA letter to Donald Berwick, June 3, 2011.
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Perspectives ……(Governance)
America’s Health Insurance Plans:
“The proposed rule limits the role that health plans and other nonprovider stakeholders can play in the formation and governance of
ACOs. We question the practicality of CMS prescribing such an
arbitrary governance standard. CMS’ focus should be ensuring that
an ACOhas a demonstrated ability to treat individuals, improve
population health, and create programs and perform outreach to
reduce unnecessary care. To that end, ACOs should have the
maximum amount of flexibility to create governing bodies that best
meet their individual needs and help them achieve the intended
goals of the MSSP, and should not be subject to a “one-size fits-all
approach to governance which would prohibit the establishment of
potentially effective alternatives.”
Reference: AHIP letter to Donald Berwick, June 6, 2011.
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Perspectives …(Governance)
American Medical Group Association
Drop the requirement to have beneficiaries on the
governing body, as this is unduly intrusive into the
operations and organization of a private business, is
impossible for many under state law, and a heavy burden
for most.
Reference: AMGA letter to Donald Berwick, June 6, 2011.
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Perspectives ……(Cost Shifting)
America’s Health Insurance Plans
“ACOs could have an incentive, and through the
aggregation of market power an enhanced ability, to
obtain shared savings payments by reducing Medicare
expenditures to achieve “savings” under the MSSP and
compensate for the reduced expenditures by charging
higher rates and possibly reducing quality of care in the
private market. This is not the intent of the ACA or the
MSSP. Thus, the MSSP should require reporting by
ACOs to determine whether such cost shifting is
occurring, and any MSSP participants that engage in cost
shifting should be terminated from the MSSP, or at a
minimum, have their shared savings payments reduced
by the amount of the cost shift.”
Reference: AHIP letter to Donald Berwick, June 6, 2011.
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General Advice Hypotheticals
You are an attorney in private practice approached by each
of the following wanting to know: “There was a news
article about ACOs. Should I be doing something?”
• Physician Group
• Hospital
• Health Plan
• Director of State’s Medicaid Program
• Chair of State Workers Benefits Board
• Physical Therapy Practice
• Self-Funded ERISA Plan
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General Advice Hypotheticals
• Chiropractor
• National Dental Practice
• Naturopath
• OIG Investigator
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General Advice Hypotheticals
You are an attorney in private practice approached by each
of the following wanting to know: “Is it a good idea for me
to form or join an ACO or CCO?”
• Small Group, 3 Physician Primary Care Practice
• Specialty 5 Physician Orthopedic Surgeons
• Large Multispecialty Physician Clinic 150 physicians,
including primary care, dominant in a geographic area
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General Advice Hypotheticals
• Large multispecialty clinic, 150 physicians, no-primary care
• Large Single Specialty Group of 50 Radiologists
• Large Hospital in Urban Area, many employed physicians
• Large Hospital in Urban Area, no/limited employed physicians
• Only Hospital in rural county, no employed physicians
• Staff-Model HMO-style Health Plan
• PPO Health Plan – Network only
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Questions / Discussion
Peter D. Ricoy
Schwabe, Williamson, & Wyatt, PC
1211 SW 5th, Suite 1900
Portland, OR 97204
Email: [email protected]
Phone: 503-796-2973.
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