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Final Rules for ACOs-Act 2

By: | Tags: , , , , , , | Comments: 0 | June 15th, 2015

Today the U.S. Department of Health and Human Services (HHS) released the Final Rule for The Centers for Medicare & Medicaid (CMS) on the Medicare Shared Savings Program (MSSP) in an effort to encourage more participation of accountable care organizations (ACOs) in risk-based models.

The CMS press release noted:

The final rule issued today improves the program over the proposed rule in a number of areas, including but not limited to:

• Creates a new Track 3, based on some of the successful features of the Pioneer ACO Model, which includes higher rates of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools; 

• Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries’ care;

• Establishes a waiver of the 3-day stay Skilled Nursing Facility (SNF) rule for beneficiaries that are prospectively assigned to ACOs under Track 3; and 

• Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings, and announces CMS’ intent to propose further improvements to the benchmarking methodology later this year. 

For the most part, the ACO industry is breathing a little better after these changes. This new version provides ACOs with more options and may even bring back some of those that abandoned the program at the third year. After 590 pages, the final rules were not simple. The final rules aim to simplify the rules for ACOs, reduce their administrative burdens and provide more flexibility within the risk-sharing options. These changes hope to encourage participation in the program and bring more doctors and hospitals in while retaining those who already have participated. CMS will allow some organizations to continue working under models in which they stand only to gain from achieved savings and will not be forced into arrangements where they would be at risk for losses.

There are now 3 tracks for current and future ACOs to follow – from no risk, low reward, middle risk and middle rewards, and now higher risk and higher rewards. We are confident that this is not going to make the next result much different, and I remain very skeptical that this will work. Yes it does potentially save CMS money, but I wonder when you take into account the labor, technology and use of other resources, does it really provide the best return on capital?

As we note here and believe without a doubt, the health care industry as a whole needs to prepare for an eventual shift from Medicare’s fee-for-service model toward one that will look far more like those of insurance companies, with systems widely used to control costs. Having spent so many years in managed care and in risk-based programs, which is likely where we need to go more in the coming years. CMS has set a goal of 30% of traditional fee-for-service models to alternatives models by 2015 and increase to 50% by 2018.

Some would say that the ACO program is a success with over 7 million effective enrollments nationwide. I understand this view – it is a hybrid model that feels like traditional Medicare while trying to modify behavior of providers. I have to admit that I like the Medicare Advantage model more in the long-term. Today in the MA program there are 16 million people enrolled. Yes, MA programs can impose some limits like the access to a network, but with capitation payments the revenue is known, and the effort can (or should be) put on actual care, coordination of care, and recently on preventative care. The MA programs have incentives to keep the beneficiary healthy and active. That is the experience I have witnessed. It can also be a huge benefit to those that receive the care with lower financial exposure.

CMS has said that it is considering other changes to the ACO program. Among those could be measurements and values to use for evaluation, and when a true savings has occurred. I am of the belief that great primary care doctors are good for ACOs. Let’s be frank, the ACO’s key objective is to not refer unnecessarily to specialist. So the more we go towards ACO, MA and non-fee-for-service, the more pressure specialists will feel. We are likely to see CMS issue more rules on how it will make these adjustment and “benchmarking methodology” later this year.

Background on ACOs:

The Medicare Shared Savings Program was created by Section 3022 of the Affordable Care Act to promote better health for Medicare fee-for-service beneficiaries by encouraging physicians, hospitals, and other health care providers to improve patient health, experience of care and to reduce growth in costs. The program is voluntary and accepts applications on an annual basis in which organizations agree to participate for three years.

There are nearly 400 ACOs participating in the Medicare Shared Savings Program. Early results released last November indicated Medicare Shared Savings Program ACOs, starting in the first two years of the program, improved quality of care for beneficiaries, as ACOs improved performance in 30 of 33 quality measures.

Based on an independent evaluation report released by CMS earlier this month, the Pioneer Accountable Care Organization (ACO) Model generated over $384 million in savings to Medicare over its first two years – approximately $300.00 per participating beneficiary per year.

The real problem, and the real opportunity as reported over and over, is the lack of minimal use and integration of medical records in ACOs. The few successful ACOs are driven by great doctors however, most ACOs do NOT have a functional interaction of medical records. We believe this leaves a great deal of value and medical care on the table. Most ACOs are driven by Primary Care Physicians (PCP), and they still have to effectively communicate with specialists via phone or fax. The real quantum shift will happen when a care team, composed of unaffiliated providers, can share the same electronic medical records on a real time basis. When this occurs, we will have changed the outcome for better care and I am confident, lower cost.

– Noel J. Guillama, President

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