The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Reconciliation Act of 2010 are collectively known as the Affordable Care Act along with the American Recovery and Reinvestment Act (ARRA) Part 2
With the last article, we have agreed to look in depth at the above Acts to explore the magnitude of their impact in the health care industry. In the last article we discussed Value Based Programs. In this article, let’s explore the Accountable Care Organization (ACO).
The Accountable Care Organization (ACO)
CMS has, for years, suggested to healthcare providers across the care continuum that they must refine old and create new methods of providing care. Providers are expected to collaborate and coordinate to minimize the fragmentation in healthcare. They need to work together to improve care delivery, efficiency, and effectiveness. Home health care providers should be aware of the new Chronic Care Management Models that include Accountable Care Organizations (ACOs) (see Select Data ezine, January, 2012 , www.selectdata.com ) .
The Coker Group (2012) defined the ACO as an “integrated healthcare delivery system that contracts to provide a full continuum of services to a defined patient population with specific financial incentives established for meeting both quality and cost targets.”
Let’s look at the Accountable Care Organization
Through collaboration amongst stakeholders, with coordination of expensive chronic care, and with partnership developments, strategic alliances are being encouraged. Is your home health agency ready? What specific programs do you have in operation? Are they evidenced-based? What have been the outcomes? Do you have reliable statistics?
Section 3022 of the Affordable Care Act added another section to the Social Security Act requiring the establishment of a Shared Savings Program intending to “encourage providers of services and supplies (e.g., physicians, hospitals, and others involved in patient care) to create a new type of health care entity, an ACO that agrees to be accountable for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending” (CMS, Summary of Final Rule Provisions for ACOs under the Medicare Shared Savings Program (SSP).
The Regulations identify that ACO participants may include: Physicians, Nurse Practitioners, Physician Assistants, Clinical Nurse Specialists, Hospitals, and specific medical providers and suppliers. Several safe harbors will grant relief to the ACO from fraud, antitrust, and tax-exemption concerns. The ACO must have at least 5,000 beneficiaries assigned to it.
In October, 2011, CMS finalized new rules under the Affordable Care Act to assist physicians and hospitals and other health care providers to create ACOs through Medicare Shared Saving Programs that are expected to lower health care costs while meeting performance standards on quality of care. The Final Rule requires CMS to “assess the ACO’s quality and financial performance based on a population’s use of primary care services at the end of each year to determine whether a particular ACO should be credited with improving care and reducing growth in expenditures compared to a benchmark population.”(CMS, Summary of Final Rule Provisions for ACOs under the Medicare Shared Savings Program (SSP).
As stated in the January 2012 Select Data ezine:
“Home health agencies should be paying VERY close attention to the latest requirement for home health found in the Affordable Care Act. The Act encourages development of Accountable Care Organizations (ACOs) and provides for “incentives to enhance quality, improve beneficiary outcomes and increase value of care.” (CMS Q&As Section 1899 of Title XVIII) The ACO becomes a type of managed care organization that may use fee for service or capitation payment, and is accountable to patients and the third party payor for the quality, appropriateness, and efficiency of the care provided. Because of the Affordable Care Act, CMS was required to have an ACO in place by January, 1, 2012.
There were presently 35 ACOs nationwide by June, 2012, over 50% in California. There are 33 quality measures that an ACO must report on to CMS. These measures are collected by: Patient surveys (7 measures), data calculated using claims (3 measures), determined via EHR (1 measure), and via Group Practice Reporting Option Web Interface (22 measures). These 33 measures are a part of reporting for this year but in years following the ACOs performance will be directly tied to certain of the quality measures as well as the following of one of two tracks.
In track 1, the one sided model, ACOs will have an upside shared savings opportunity with no downside risk, but the shared savings opportunity is less with this model; 50% of the excess savings to a lower cap. Track 2 is a two sided model requiring the ACO to share in 60% of both savings and losses with a cap.
Per CMS, by April 1, 2012, over 1.1 million beneficiaries are receiving care through ACOs which are members of the Shared Savings Program.
Some home health agencies have begun aligning with physician offices, hospitals, rehabilitation facilities, and long term care providers to coordinate care across the health care continuum. Home health agencies are becoming members of hospital teams in both general and specialty areas. Agencies which cannot seem to form the alliances may find themselves with declining referrals in the near future. Home health needs to demonstrate their personalized approach to care so they may be appealing to the PCMH team.
Home health agencies should be encouraging discussions among provider leaders of all levels of the care continuum. Patient ultimate outcomes should be shared by all providers. Establishing those mutual patient outcomes is a primary step in a strategic alliance ACO.
The Shared Savings Program final Rule can be downloaded at http://www.ofr.gov/inspection.asp
Part 3 will focus on the Electronic Health Record (EHR) Incentive Program of the ACA.