April 20th, 2011 by Stanley Feld, M.D. in Health Policy, Opinion
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In 2009 President Obama stated that Accountable Care Organizations (ACOs) were going to be pilot programs in real world settings. The goal was to see if they effective in reducing costs and increasing “quality of care.” The results of the pilot programs have not been published.
Last week despite the lack of proof of concept HHS and CMS announced new proposed regulations for ACOs.
The new delivery and payment model the agency estimates could serve up to 5 million Medicare beneficiaries through participating providers, and also potentially save the Medicare program as much as $960 million over three years.
How were these estimates derived? It could be another accounting trick by President Obama’s administration.
The idea of coordinating care and developing systems of care is a great idea theoretically. From a practical standpoint, execution is very difficult.
I tried to execute something similar in 1996 with the American Association of Clinical Endocrinologists; a national Independent Practice Association. AACECare received little cooperation or interest from Clinical Endocrinologists.
The problem is coordinated medical care is dependent on physicians cooperating and not competing with each other. It also depends on hospital systems developing an equitable partnership with physicians.
The equitable partnerships between hospital systems and physicians are difficult to achieve if past results are any indication of future results. Read more »
*This blog post was originally published at Repairing the Healthcare System*
April 14th, 2011 by Happy Hospitalist in Health Policy, Humor, True Stories
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This was a classic moment of comical clarity that only comes along once a week. As you may or may not know, starting in 2013, The Medicare National Bank has promised to take back 1% of all of a hospital’s total Medicare revenue (to increase in future years) if the hospital has a higher 30 day readmission rate for congestive heart failure, acute myocardial infarction or pneumonia than an as yet undefined acceptable 30 day rate of readmission.
What does this mean? It means if the government decides that 20% is an acceptable rate for congestive heart failure 30 day readmission, and the hospital has a readmission rate of 25%, the hospital will be told to return 1% of all Medicare revenue for the year, not just their heart failure revenue.
Let’s use some hypothetical numbers, shall we? If a hospital generates $250 million dollars in a year on 25,000 Medicare discharge diagnosis related groups (DRGs) but only 100 of those discharge DRGs (or $1,000,000) were heart failure in 2013, what would happen if 21 CHF patients returned for readmission (a 21% thirty day readmission rate) within 30 days for heart failure instead of allowable 20%? The hospital would have to return 2.5 million dollars (1% of their total revenue on all Medicare admissions).
That one patient that took them from 20% to 21% will cost them 2.5 million dollars. The hospital would generate one million dollars in CHF revenue for the year and pay back 2.5 million dollars in penalty. That’s a pretty hefty price to pay considering that hospital profit margins from Medicare have been negative, on average, for most of the last decade. Read more »
*This blog post was originally published at The Happy Hospitalist*
April 11th, 2011 by DrRich in Health Policy, Opinion
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As difficult as it may be for most of his readers to believe, not everyone appreciates the erudite writings or well-reasoned analyses habitually offered up herein by DrRich. And despite the fact that DrRich takes great pains to express himself cordially even when addressing particularly contentious issues, and that he assiduously avoids personal attacks on his opponents, and indeed usually attributes lofty motives to them (focusing instead on their counterproductive methods or naive premises), it is not at all rare for DrRich to be the recipient of some rather negative, even personally hostile, communications.
And of all the topics likely to engender such negative feedback, none gets a more vociferous response than this: DrRich’s contention that among the many mandatory features that will necessarily comprise any Progressive healthcare system, the most obligatory, compulsory, requisite and non-negotiable of all will be the imperative to forbid individuals from having any meaningful control over their own healthcare destiny.
There are two basic reasons individual autonomy in healthcare must be stifled. Read more »
*This blog post was originally published at The Covert Rationing Blog*
April 11th, 2011 by DavidHarlow in Health Policy
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ACO regulations and related federal issuances hit the street last Thursday, after several months of waiting — from CMS, OIG, FTC, DOJ and IRS. They cover the waterfront, ranging from the central regulation defining the structure and workings of the ACO, to limited Stark self-referral ban and anti-kickback statute waivers in the fraud and abuse arena, to new frameworks for antitrust analysis, to rules governing joint ventures involving taxable and tax-exempt organizations.
I had the opportunity to discuss the regs the day after they were issued on a special edition of the Blog Talk Radio show, ACO Watch, hosted by Gregg Masters (@2healthguru). Gregg’s guests included Mark Browne (@consultdoc), Vince Kuraitis (@VinceKuraitis), Jaan Sidorov (@DisMgtCareBlog) and yours truly (@healthblawg). We are geographically diverse, and bring a variety of perspectives to the table. I invite you have a listen — we enjoyed the opportunity to discuss the rules, we all learned from each other, and we hope you enjoy the conversation as well. (It runs about 90 minutes.)
Update 4/5/2011: For a collection of ACO analyses curated by Anita Samarth see: http://bit.ly/ACO-Analyses.
Here are a few points to consider as part of a first look at the ACO rules:
1. The rules were worth the wait. There are a lot of moving parts to coordinate, and the multi-agency effort really came together. The CMS rule also retains a fair amount of flexibility. Some requirements are very specific, but others much less so. (For one example of specific guidelines, take a look at the eight-part definition of patient-centeredness; an organization must satisfy all eight in order to be an ACO. Other requirements have no detail at all, and CMS will look to applicants to explain how they meet the requirements, without giving any hints.)
2. This is the Frankenstein regulation: A Medicare beneficiary must sit on the board of the ACO, CMS must approve all marketing materials before they are used …. These requirements may be traced back to origins in CMS demonstration project and Medicare Advantage policies, respectively, and illustrate the way in which CMS took a short statute and really put some meat on the bones. Some may balk at the weight of the requirements limiting the options of an ACO.
3. CMS has bootstrapped a law aimed at ACOs serving at least 5,000 Medicare beneficiaries each into a system of rules that effectively requires that commercial business be handled in an ACO-like manner. This, among other infrastructure requirements (e.g., 50% of ACO docs must be meaningful users of EHRs), leads to the conclusion that there will be relatively few ACOs, at least initially. CMS estimates 75-150 nationwide. There are, of course, many unanswered questions about what a commercial ACO would look like. One model I am familiar with — here in the People’s Republic of Massachusetts — is the AQC, or Alternative Quality Contract offered by Blue Cross Blue Shield of Massachusetts to providers enrolled in its HMO Blue product. One question is whether a slightly different financial model could apply to the commercial side of the house. One model worth a close look is Jeff Goldsmith’s proposed ACO model, which would treat primary care, emergency and diagnostic care, and episodes of specialty care in three distinct ways.
In brief, Goldsmith recommends risk-adjusted capitation payments for primary care, fee-for-service payments for emergency care and diagnostic physician visits, and bundled severity-adjusted payments for episodes of specialty care. Primary care would be provided through a patient-centered medical home model, which would likely have a collateral effect of reducing the total volume of emergency care and diagnostic physician visits. Specialty care would be provided through “specialty care marts,” ideally more than one per specialty per market to maintain a little healthy competition.
A quick explanation of this approach to an intensivist over the weekend elicited a favorable response.
4. Also in the bootstrapping department, CMS has shifted the ACO from a “shared savings” approach to having ACOs share risk as well as the upside. Of course, this makes a lot of sense; a number of commentators, including the HealthBlawger, had lamented the fact that risk sharing was left out of the statute. CMS has used its general waiver and demo authority under the ACA to move the ACO into risk sharing. The ACO may choose: share risk from day one, and enjoy a potentially higher percentage of the upside, or defer the risk sharing to year three.
5. The retrospective nature of patient attribution and savings calculations mean that each ACO must treat every Medicare fee-for-service patient as if he or she is “theirs.” Patients have the right to decide whether they want their data shared with an ACO; if enough patients are spooked by health care data privacy and security issues, fewer and fewer will authorize the sharing from CMS to the ACO, and the ACO will have to drive by feel — or base its management of Medicare beneficiaries on its management of its general patient population.
6. Organizations that dominate their local markets may be the most successful as ACOs, but they may face the most involved antitrust review at the hands of the FTC/DOJ.
7. Scoring on 65 quality metrics in 5 domains will help determine the amount of any shared savings to be paid to an ACO. One domain, patient experience of care, links up nicely with the patient-centeredness threshhold requirement noted above. (For private sector attention to patient experience, see what the Leapfrog Group is doing in this domain, using some of the same measures.) While some may bristle at the number of metrics, it is worth noting that these metrics are all drawn from existing sets of measures.
8. All in all, the regulations represent the first stage of realizing the ACO vision expressed by Don Berwick last fall: there is a field open to experimentation (albeit a field likely limited to large networks of significant means that can underwrite the up-front infrastructure costs), and the ACO rules sketched out in the statute and further delineated in the regulations will enable CMS to incentivize the provider community to help achieve the triple aim of better care for individuals, better health for populations and reduced per-capita costs.
David Harlow
The Harlow Group LLC
Health Care Law and Consulting
*This blog post was originally published at HealthBlawg :: David Harlow's Health Care Law Blog*
April 7th, 2011 by Toni Brayer, M.D. in Health Policy, Opinion
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I am all for any proposal that will improve heath care in America. Improvement means controlling costs, covering all Americans so no one has to worry about going bankrupt to pay for health care. Improvement means access to quality care without having to worry about losing your job, which means losing your coverage. Improvement means a system where all incentives are aligned to prevent disease, rather than using expensive technologies and hospitals to treat disease after the fact. Any proposal that gets us there has my vote.
In the GOP “Path to Prosperity” budget for 2012, they propose a few things that are good and a few big things that are bad…really really bad. First the good. Capping the medical malpractice lawsuits for “pain and suffering” would be a huge step forward. Patients should be compensated for medical errors but the “hit the lottery” windfalls for pain and suffering are costly drivers that make no sense. There is no place in the world, besides the USA, that has such onerous medical malpractice lawsuits. And they drive up cost for everyone. Read more »
*This blog post was originally published at EverythingHealth*
