Accountable Care Organizations: The Medicare Shared Savings Program - - PowerPoint PPT Presentation

Accountable Care Organizations: The Medicare Shared Savings Program

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Accountable Care Organizations

Medicare Shared Savings Program

Summary Explanation of Proposed Rule Private Practice Section APTA

Jerry Connolly Connolly Strategies & Initiatives connollystrategies@gmail.com 703-307-5363

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Themes in Health Care Reform

• Prevention and wellness, Medicaid expansion,

exchanges, nondiscrimination

Expansion of Coverage

• Cuts in payment rates, refinements to payment

systems, patient assessment instruments

Refining / Changing Payment Methodologies

• Value based purchasing, hospital readmissions

policy, electronic health records, registries

Linking Payment to Quality

• Provider Enrollment
• Funding Increases for Enforcement
• Expansion of Audits (RACs)

Program Integrity

• Bundling
• Accountable Care Organizations
• Medical Homes

Integrated Models of Care – Innovation

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Webinar Aims

Today’s purpose

• Explain major provisions of the proposed rule
• Answer questions (to the best of our ability)
• Submit to: privatepracticesection@apta.org
• Base further analysis on feedback
• Prepare for 2nd webinar

Next webinar – May 26 – 2 PM EDT

• Present draft comments and “talking points”
• Encourage member submissions

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Accountable Care Organizations

 Labeled the Medicare Shared Savings Program PPACA -- Section 3022  Shared savings for

• hospitals and doctors
• changing payment models from FFS
• to model that rewards efficiency and quality
• (from fragmentation to coordination)
• (from volume to value)

 Implementation date: 1/1/2012—this is not a pilot!  Viewed as a potential means for bending the health care cost curve  CBO scored 10-year savings of $4.9 billion

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Case for Payment and Delivery Reform

 Current Medicare FFS model results in fragmented care and breaks down care in silos  Incentivizes providers on volume of services and does not encourage clinician collaboration  Need to create a system that seamlessly coordinates care & incentivizes same  Costs of current delivery model unsustainable

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Proposed Rulemaking for ACOs

Medicare Shared Savings

 Sec. 3022 of the Affordable Care Act requires CMS to

establish a Medicare Shared Savings program “by

• Jan. 1, 2012 that promotes accountability for a

patient population, coordinates items and services under Medicare Parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.” Participating entities, referred to as Accountable Care Organizations that meet quality and performance standards are eligible to receive payments for shared savings.

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ACO -- Rulemaking

Regs promulgated in four separate rulemakings:

• CMS Medicare Shared Savings Program Proposed

Rule:

http://www.ofr.gov/(X(1)S(xrkl4mdtyvi54lavhney5kfi))/OFRUpload/OF RData/2011-07880_PI.pdf

• CMS/OIG Waiver of Fraud and Abuse Certain

Provisions Notice with Comment Period:

http://www.ofr.gov/(X(1)S(vxlliaunmjoofe4qc13ybxl1))/OFRUpload/OFRDa ta/2011-07884_PI.pdf

• FTC/DOJ Anti-trust Enforcement Policy Notice with

Comment Period:

http://www.ftc.gov/os/fedreg/2011/03/110331acofrn.pdf

• IRS Request for Information on Tax-Exempt Status

for Shared Savings Programs: http://www.irs.gov/pub/irs-

drop/n-11-20.pdf

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Accountable Care Organization - What is It?

 CMS: “An organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.”  Assignment to an ACO will be “invisible to the beneficiary, and will not affect their guaranteed benefits or choice of doctor. A beneficiary may continue to seek services from the physicians and other providers of their choice, whether or not the physician or provider is part of an ACO.”  Assignment methodology to be specified by CMS; based on which ACO professionals provide “the bulk of primary care services” to a particular fee-for-service Medicare beneficiary.

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What is An ACO?

 Must meet specified quality performance standards to receive a share of any savings if the actual per capita expenditures of their assigned Medicare beneficiaries are a sufficient percentage below benchmark amounts set by CMS (January 2012)  Triple Aim: 1) better care for individuals; 2) better health for populations; and 3) lower growth in expenditures  “…not just a new way to pay for care but a new model for the

• rganization and delivery of care.” (Dr. Berwick)

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Common Misconceptions

An ACO is not a “provider network” ACOs are provider-driven ACOs do not necessarily have to involve a hospital Not to be confused with “bundling” or the “medical home” Participation in the ‘Shared Savings’ program not mandatory ACOs are not paid under capitation (not yet) Neither ACOs nor providers or suppliers that are not ACOs will have their Medicare payments reduced [FFS]

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Who Is An ACO Professional?

 ACO professionals are defined as

• a physician (ref: section 1861(r)(1)); and
• a practitioner described in

section1842(b)(18)(C)(i),

• physician assistant,
• nurse practitioner, or
• clinical nurse specialist

 Note: Outpatient physical therapy is referenced in section 1861(p) so NOT included in statutory definition.

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Proposed Structure

 Must have a formal and legal structure that allows the ACO to receive and distribute payments for shared savings  Formal CMS application and approval process  May be a corporation, partnership, LLC, foundation, or any other entity permitted by State law  ACO governance structure should allow for appropriate proportionate control for ACO participants, giving each ACO participant a voice in the decision-making process  Governing body must have representatives from Medicare FFS beneficiaries and each ACO provider/ participant  Allows for partnering with private entities but ACO participants must have at least 75 percent control of the ACO’s governing body

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Proposed Structure

 ACO must develop and implement evidence-based medical practice or clinical guidelines and processes for delivering care based on three part aim  ACO providers/suppliers and participants must commit to a three-year contract (CMS lays out remedial actions for removing participants for non-compliance)  5000 yearly patient threshold requirement (patients assigned to ACO by primary care utilization)  Participation purely voluntary for providers and patients  ACOs must notify patients that they are a part of an ACO and that health information will be shared among ACO providers and participants

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Rural Exceptions

 Special rules apply to certain Medicare ACOs in rural or underserved communities, such as sharing first dollar savings above the Minimum Savings Rate.  A Medicare ACO that includes a federally qualified health centers or rural health clinics receives an increase in its sharing rate, depending on the percentage of ACO-assigned beneficiaries with one or more visits to the federally qualified health centers or rural health clinics during the applicable year.

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Participation of Medicare Beneficiaries

 completely voluntary  no enrollment or assignment of beneficiaries to the Medicare ACO  allowed to receive care outside of the Medicare ACO  not required to actively choose a primary care physician

• “Beneficiary assignment” is used to determine whether a beneficiary

received a sufficient level of requisite primary care services from physicians associated with a specific ACO.

• CMS will assign beneficiaries to a Medicare ACO’s TIN based on the

primary care services they received from primary care physicians billing under that TIN, if they receive a plurality (as opposed to a majority) of their primary care services (based on allowed charges) from primary care physicians within that ACO.

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Beneficiary Education

 CMS intends to develop a communications plan to provide information on utilization of services furnished by a Medicare ACO and the possibility of being assigned to an ACO.  Medicare ACOs must notify patients that they are participating in an ACO. To improve coordination of care, CMS proposes offering access to Medicare claims data to ACOs for patients they are treating if the beneficiary grants permission.

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Marketing the ACO

 The statute is silent on marketing by ACOs;  CMS concerned about beneficiaries being misled;  All marketing materials (including revisions) must be approved by CMS prior to their use.  Failure to meet this requirement can result in corrective action or termination.

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Eligible Providers

 Distinction between ACO professionals and ACO participants  ACO professionals (hospitals and physicians) in group practice arrangements, networks of individual practices of ACO professionals, partnerships or joint venture arrangements between hospitals and ACO professionals, and hospitals employing ACO professionals, and CAHs. (statutory)  ACO participants – can contract and participate in ACOs but could not form ACOs on own (PTs in private practice, physical therapy groups, Rehab Agencies, SNFs, HHAs)  ACO identified through TIN (may or may not be Medicare enrolled entities)  ACO participants must be Medicare enrolled (ACO will report a list

• f NPIs)

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Proposed Quality Monitoring and Reporting

 Formation of a physician-directed quality assurance and process improvement committee that would oversee an ongoing quality assurance and improvement program that would be accountable for meeting performance and compliance standards  CMS will conduct site visits and will require patient surveys, and quarterly and annual reports focused on five domains:

• Patient/caregiver care experiences;
• Care coordination;
• Patient safety;
• Preventive health; and
• At-risk population/frail elderly health

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Proposed Quality Reporting

 First year - quality performance standard at the reporting level  Proposed quality measures aligned with PQRS, EHR Incentive Program, and Hospital Inpatient Quality Reporting Program  ACO providers/suppliers and participants who are also eligible professionals under PQRS may earn PQRS incentives as a group practice under the Shared Savings Program

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Proposed Shared Savings Arrangement

 ACO participants paid under current Medicare FFS payment  Shared savings payments directly (retrospectively) to the ACO as identified by its TIN  CMS would develop a benchmark for each ACO to assess performance  Benchmark = estimate of total Medicare FFS Parts A and B costs for ACO patient population if provided absent ACO  Benchmark factors in patient characteristics, geographic location, etc  Benchmark updated each year of the three-year period

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Proposed Shared Savings Arrangement

 CMS proposes minimum savings rate based on percentage of the benchmark that the ACO must exceed  25% of ACO shared savings payments will be withheld to ensure pay back of any losses incurred to CMS  ACOs must opt into one of two risk-sharing models, which will determine the percentage of savings that ACOs are eligible to receive:

• One-Sided Risk Model—Savings are shared for the first two years and

then in the third year savings and losses are shared (50% of the savings are shared)

• Two-Sided Risk Model—Savings and losses are shared for all three

years (60% of the savings are shared)

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Shared Savings Models

Design Element One-Sided Model

(performance years 1 & 2)

Two-Sided Model

Quality Scoring Sharing rate up to 50% based on quality performance Sharing rate up to 60% based on quality performance FQHC/RHC Participation Incentives Up to 2.5 percentage points Up to 5 percentage points Minimum Savings Rate (MSR) Varies by population Flat 2% regardless of size Minimum Loss Rate (MLR) None Flat 2% regardless of size Maximum Sharing Cap Payment capped at 7.5% of ACO’s benchmark Payment capped at 10% of ACO’s benchmark Shared Savings Savings shared once MSR is exceeded; unless exempted, share in savings net of a 2% threshold; up to 52.5% of net savings up to cap. Savings shared once MSR is exceeded; up to 65% of gross savings up to cap Shared Losses None First dollar shared losses once the MLR rate is exceeded. Cap on the amount of losses to be shared is phased in over three years starting at 5% in year 1; 7.5% in year 2; and 10% in year 3. Losses in excess of the annual cap would not be shared. Actual amount of shared losses would be based on final sharing rate that reflects ACO quality performance & any additional incentives for including FQHCs and/or RHCs using the following methodology (1 minus final sharing rate).

Source: Medicare Shared Savings Program, proposed rule, page 93.

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Sharing Savings

 Year 1: CMS proposes that the Medicare ACOs report 65 quality measures grouped into five domains:

• patient/care giver experience;
• care coordination;
• patient safety;
• preventive health; and
• at-risk population/frail elderly health.

 Years 2 and 3: (Quality measure reporting requirements will be created during future rule-making).

• Beginning in the second program year, CMS will consider performance
• n the reported measures when determining whether an ACO is eligible

to receive shared savings payments.

• ACOs will receive larger percentages of shared savings if they

demonstrate providing high quality care.

• ACOs must publicly report information on ACO Participants,

parties sharing in the governance of the ACO, quality performance standard scores, and general information on how an ACO shares savings with its members.

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Physician Self-Referral Law and Anti-Kickback Waivers

To allow the ACO to distribute savings among cooperating physicians and hospitals (i.e., ACO Participants), the notice includes proposals to waive the laws in three circumstances:

 The distribution of shared savings payments received by an ACO to or among qualified ACO participants and ACO providers/suppliers.  An ACO’s distribution of shared savings payments to other individuals or entities for activities necessary for and directly related to the ACO's participation in the Shared Savings Program.  For the anti-kickback statute and civil monetary penalties provisions

• nly, “any financial relationship between or among the ACO, ACO

participants, and ACO providers/suppliers necessary for and directly related to the ACO's participation in and operations under the Medicare Shared Savings Program that implicates the physician Self- Referral Law and fully complies with an exception…”

• CMS is seeking public comment on these possible waivers of the statute and certain civil

monetary penalties provisions.

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Alignment with other Federal Laws

 CMS and OIG propose to waive certain provisions of the Stark II statute, Anti-kickback statute, and Gain-sharing CMPs for ACO/Shared Savings Programs that meet proposed requirements  FTC/DOJ Anti-trust enforcement statement (applies “rule of reason” analysis to ACO formations and lays levels of anti- trust scrutiny based on PSA percentages  IRS tax exempt status for ACOs and non-ACO functions (501(c)(3) organizations and taxes on unrelated business income)

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Important Things to Keep in Mind

 The ACO itself need not provide all necessary services.  In fact, the ACO itself may not include all the professionals and providers required to directly provide all necessary services.  The individual Medicare beneficiary is never under an obligation to receive care from an ACO.  The determination of whether an ACO has produced sufficient savings (to share with the Medicare program) will take into account all Medicare expenditures for its assigned beneficiaries, not just those for services provided by the ACO.

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Suggested Reading

 ACO regulations promulgated in four separate rulemakings:

• CMS Medicare Shared Savings Program Proposed Rule:

http://www.ofr.gov/(X(1)S(xrkl4mdtyvi54lavhney5kfi))/OFRUpload/OFRData/2011- 07880_PI.pdf

• CMS/OIG Waiver of Fraud and Abuse Certain Provisions Notice with

Comment Period:

http://www.ofr.gov/(X(1)S(vxlliaunmjoofe4qc13ybxl1))/OFRUpload/OFRData/2011- 07884_PI.pdf

• FTC/DOJ Anti-trust Enforcement Policy Notice with Comment Period:

http://www.ftc.gov/os/fedreg/2011/03/110331acofrn.pdf

• IRS Request for Information on Tax-Exempt Status for Shared Savings

Programs: http://www.irs.gov/pub/irs-drop/n-11-20.pdf  Brookings-Dartmouth ACO Tool Kit, Chapter 15, Overview of Legal Issues Associated with Creating ACOs; available at

https://xteam.brookings.edu/bdacoln/Pages/Toolkit.aspx.

 http://www.cms.gov/MLNProducts/downloads/ACO_Providers_Factsheet_ICN9 03693.pdf  Extensive ACO bibliography on PPS/APTA web site

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Regulatory Timeline

 Comments are due by June 6, 2011  Final rules published later this year  ACOs must be operational by January 2012  Demonstrations will also take place in concert with ACO implementation and will be run through CMMI (separate and apart from this rulemaking)

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PPS Next Steps

 Continue analysis, summarize, identify impact  Member feedback welcome  Draft comments to proposed rules  Share with membership – Second Webinar May 26th  Develop strategies -- e.g., guidelines, resources and models that articulate the VALUE of physical therapists (PTPPs)  Member education and outreach

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Thank You!

Medicare Shared Savings Program Accountable Care Organizations Summary Explanation of Proposed Rule

Private Practice Section APTA Jerry Connolly Connolly Strategies & Initiatives connollystrategies@gmail.com 703-307-5363

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Questions/Discussion

????

ACOs

Co/APTA PPS/SIG Agenda Effectiveness

Health Care Reform Value

Efficiency

Know Your Costs

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