Weighing in on ACOs
Weighing in on ACOs | Accountable Care Organization, ACO, Medicare, Healthcare Delivery Model, American Hospital Association, MedHOK, Nancy Foster, Katie Zito

Beneficiary Assignment, Data Sharing Opt Out Raise Red Flags

The highly anticipated proposed rules for Accountable Care Organizations (ACOs) were released by the U.S. Department of Health and Human Services on March 31, 2011. The hefty document — nearly 500 pages of potential regulatory structure — was open to public comment through the end of May.

The broad concept calls for primary care physicians to enter into a cooperative agreement with other care providers spanning the healthcare spectrum. Under this delivery model, general practitioners, hospitals, medical specialists, outpatient facilities, skilled nursing facilities, rehabilitation experts and home health providers might form an ACO to deliver integrated care with an eye toward meeting quality benchmarks while controlling costs.

“The Affordable Care Act is putting patients and their doctors in control of their healthcare,” said HHS Secretary Kathleen Sebelius at the release of the proposed rules. “For too long, it has been too difficult for healthcare 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.”

“The goal of an ACO would be to provide integrated care to patients and reduce unnecessary utilization of services, thereby reducing Medicare fee-for-service costs. The focus is heavily on coordinated, integrated, seamless care across the continuum, said Katie Zito, MedHOK’s director of Policy and Regulatory Affairs. Headquartered in Tampa, Fla., MedHOK has both a web-based software division offering solutions to improve clinical outcomes, care management and quality measures and a consulting arm to help clients better understand health policy and the regulatory environment.

As proposed, ACOs create incentives for providers to work together in a coordinated fashion across care settings. ACOs that lower costs while meeting quality performance measures would be rewarded through the Medicare Shared Savings Program. According to Zito, those who opt to take on no risk in the first two years would receive a smaller percentage of any achieved savings but would not be held liable if they miss their benchmarks.

“In the second model, they share in both the upside and downside of risk,” she said. If the ACO fails to meet benchmarks, Zito explained, the providers would have to pay a portion of the money received from CMS back to the federal agency. If they did hit their quality and cost marks, then the ACO would get a bigger portion of the realized savings than those in the first model.

Both patient and provider participation in an ACO is voluntary. The fee-for-service Medicare model will still exist, as will Medicare Advantage plans. Although a patient in a Medicare Advantage plan would not be able to participate in an ACO, individuals enrolled in an ACO are not limited to one group of physicians. “The beneficiary maintains choice,” said Zito. “You cannot prohibit a member from going to another ACO or to a fee-for-service provider.”

Nancy Foster, vice president of Quality and Patient Safety for the American Hospital Association, called ACOs a very intriguing care delivery idea. “Conceptually, we believe it’s a very interesting model,” she said, but added, “Taking something from concept to reality always causes some tension.”

Right now that tension seems to emanate from several places in the proposed rules. Two particular sources of concern are the way beneficiaries are slated to be allocated to an ACO and the ability for beneficiaries to opt out of data sharing.

“Beneficiary assignment, I think, is probably the biggest area where people are skeptical,” said Zito. “CMS is using an odd assignment process. It’s passive on the member’s end.” Looking back three years, CMS plans to assign members based on where that member accessed a plurality of care. If, for example, a city had two ACOs, the Westside ACO and Eastside ACO, CMS would look at a patient’s primary care pattern to determine which ACO would be attached to that patient.

Again, Zito noted, a member would still have the option to go to a doctor in the other ACO if they so chose. In fact, if care patterns changed over the following year, the member would be switched to the other ACO. She added that CMS has acknowledged they expect about a 25 percent turnover annually between people moving, switching ACOs, opting out of the program or death.

Foster said AHA members have indicated concern about this very issue. “There are lots of questions about the retrospective allocation of patients to an ACO and how that works with the overarching concept of an ACO, which is to prospectively manage a group of patients.”

She questioned, “If you are going to manage a group, wouldn’t you have to know who is in that group?”

Zito, who echoed Foster’s sentiments, speculated this ambiguity could be by design. “CMS is really trying to change the way care is delivered. As a result, they are trying to encourage doctors to provide this integrated care to everyone … not just those that are in an ACO.”

A second major area of concern is that an ACO member has the right to opt out of data sharing, which could skew the remaining data. If chunks of information are missing, Zito pointed out, “Not only does it make it difficult for an ACO to meet the quality metrics, it’s also difficult to coordinate care.”

In late April, Foster said the AHA was gathering information to prepare the organization’s comments to the proposed rules, as were many other groups potentially impacted by the implementation of ACOs.

Despite concerns, most provider organizations remain interested in this overarching concept that puts the patient in the center of the care model and largely returns decision-making to the hands of providers and patients.

Part of an Obama Administration trifecta, the release of the proposed rules for ACOs is one of three recent announcements by HHS impacting the broader healthcare quality, safety and affordability landscape. In addition to the new care delivery model, the federal agency has recently released the first-ever National Quality Strategy and launched the Partnership for Patients to minimize preventable injury and illness while potentially saving the government billions in healthcare expenditures.


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