Table of Contents• PART I: Introduction, History, ACO Stake holders, Core principles for all ACOs, CMS

Announcement you-tube clip

(Anthony Harding)

• PART II: Overview of ACO and Key Elements of ACO/Health Reform • (Jolly Patel)

• PART IV: The ACO - Immediate Benefits for Delaware • (Anthony Mbirwe)

• PART V: Conclusion• (Jitka Gruntova)

IntroductionAn accountable care organization

(ACO) is a type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.

A group of coordinated health care providers form an ACO, which then provides care to a group of patients.

The ACO may use a range of payment models (capitation, fee-for-service with asymmetric or symmetric shared savings, etc.).

The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided.

According to the Centers for Medicare and Medicaid Services (CMS), an ACO is "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.

ACO Stakeholders

Providers-ACOs are comprised mostly of hospitals, physicians, and other healthcare professionals. Depending on the level of integration and size of an ACO, providers may also include health departments, social security departments, safety net clinics, and home care services.

Payers- The federal government, in the form of Medicare, will be the primary payer of an ACO. Other payers include private insurances, or employer-purchased insurance.

Patients- An ACO’s patient population will primarily consist of Medicare beneficiaries. In larger and more integrated ACOs, the patient population may also include those who are homeless and uninsured.

History The term “Accountable Care Organization”

was first used by Elliott Fisher – Director of the Center for Health Policy Research at Dartmouth Medical School

In 2006 during a discussion at a public meeting of the Medicare Payment Advisory Commission.

The term quickly became widespread, reaching its pinnacle in 2009 when it was included in the Patient Protection and Affordability Care Act.

Although the term ACO was not coined until 2006, it bears resemblance to the definition of the Health Maintenance Organization (HMO), which rose to prominence in the 1970s.

Like the HMO, the ACO is “an entity that will be ‘held accountable’ for providing comprehensive health services to a population.“

The ACO-model builds on the Medicare Physician Group Practice Demonstration and the Medicare Health Care Quality Demonstration, established by the 2003 Medicare Prescription Drug, Improvement, and Modernization Act.

Kaiser Permanente and HealthCare Partners Medical Group are two notable examples of successful ACO prototypes.

However, a recent study by the Medical Group Management Association (MGMA) has shown that the implementation of ACOs is one of the toughest challenges facing the MGMA members today

CMS Announces Accountable Care Organization Rule

http://youtu.be/K1OwHo3kV1o

What Is An Accountable Care Organization (ACO)?

http://youtu.be/ULy5vjcGuDcConsists of providers who are jointly held accountable

for achieving measured quality improvements and reductions in the rate of spending growth

May involve a variety of provider configurations, ranging from integrated delivery systems and primary care medical groups to hospital-based systems and virtual networks of physicians such as independent practice associations

Has a strong base of primary care, although hospitals are encouraged to participate, because improving hospital care is essential to success

ACOs In PerspectiveThink of it like buying a television...

A TV manufacturer such as Sony may contract with many suppliers to build a TV – like a Sony, an ACO would bring together the different component parts of care for the patient (primary care, specialists, hospitals, home health care, etc.) and ensure that all of the parts work well together

The problem today is that patients are getting each part of their health care separately – they are buying individual circuit boards, not a whole TV

Core Capabilities

How Does It Differ From HMOs?The principle difference between HMOs and

ACOs is their size

HMOs, like most insurance companies, generally have enrollees in the hundreds of thousands compared with as few as 5,000

HMOs function like insurance companies (they bear 100 percent of the risk that the premiums they charge will not be enough to cover all necessary services for their enrollees) while ACOs will bear little or no insurance risk in their first few years

Key ConceptsThe key concepts for ACOs are “continuum of the

care” and “quality of the care”

ACOs in the future will see incentives for providers who keep costs down and still manage to meet specific quality benchmarks, concentrating on prevention of chronic diseases and efficient disease management

Keeping the costs of hospitalizations under control and then providing quality home healthcare to patients is essential to success

ACOs & The PPACAThe Patient Protection and Affordable Care Act

(PPACA) was signed into law by President Obama on March 23,2010

The PPACA’s intent is to ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs

PPACA Titles I - IIIThe Patient Protection and Affordable Care Act contains nine titles, each addressing an important component of reform:

I. Quality, affordable health care for all Americans

II. The role of public programs

III. Improving the quality and efficiency of health care

PPACA Titles IV - IXIV. Prevention of chronic disease and improving

public health

V. Health care workforce

VI. Transparency and program integrity

VII. Improving access to medical therapies

VIII. Community living assistance services and supports

IX. Revenue provisions

Title IIIImproving the Quality and Efficiency of Health Care

The PPACA will encourage development of new Patient Care Models starting with a new Center for Medicare & Medicaid Innovation to be established within the Centers for Medicare and Medicaid Services

Medicare & Medicaid InnovationThis new Center for Medicare & Medicaid

Innovation will have the responsibility of research, development, testing and expanding innovative payment and delivery arrangements

ACOs that take responsibility for cost and quality received by patients will receive a share of savings they achieve for Medicare

Requirements For ACO Status1. A willingness to become accountable for the

quality, cost, and overall care of the Medicare beneficiaries it treats

2. Entrance into an agreement with the Secretary of Health and Human Services (HHS) to participate in the program for not less than 3 years

3. A formal legal structure that allows the entity to receive & distribute payments

Requirements Continued4. The inclusion of primary care professionals

that are sufficient for the number of Medicare beneficiaries assigned to the ACO

5. Provision to the Secretary of information regarding the professionals who participate in the ACO and implementation of quality and other reporting requirements

Requirements Continued6. A leadership and management structure that

includes clinical and administrative systems

7. Defined processes that promote evidence-based medicine and patient engagement, reporting on quality and cost measures, and care coordination

8. Demonstration that the organization meets patient-centered criteria

More About ACOsThe ACO initiative was scheduled to launch in

January 2012

Right now, a main source of revenue for healthcare organizations comes from the tests and procedures performed on patients in the current fee-for-service payment system, but after the creation of ACOs, organizations and providers will get paid for saving more while still providing quality healthcare to the patients - they will get paid for keeping patients healthy and out of the hospital

Financial Savings Associated With ACOs

The Congressional Budget Office estimates that ACOs could save Medicare at least $4.9 billion through 2019 – less than one percent of Medicare spending during that period, but if the program is successful it can be expanded by the Secretary of Health and Human Services

Comparison of Payment Reform Models

Cost Considerations For The ACOPredominately large hospital systems and big

physician groups are pursuing the ACO concept due to the large investment required in healthcare IT and infrastructure

ACOs are designed to encourage consolidation among hospitals and doctors which has also drawn anti-trust scrutiny

If an ACO is not able to save money, it would be stuck with the costs of investments made to improve care, such as adding new nurse care managers, but would still get to keep the standard Medicare fees

Who Is In Charge Of The ACO?It’s flexible – can be hospitals, doctors, or even

insurers

Some regions of the country already have large multi-specialty physician groups that may become an ACO on their own, likely by networking with neighboring hospitals

In other regions, large hospital systems are buying physician practices with the goal of becoming ACOs that directly employ the majority of their providers (because hospitals usually have access to capital, they may have an easier time than doctors in financing the initial investment required by an ACO)

What Does This Mean For You, The Patient?

http://youtu.be/Xlq2XJ6J76gPatients may not even know that they are part

of an ACO

Doctors will want to refer patients to hospitals and specialists within the ACO network, however patients will still be free to see doctors of their choice outside the network

Because ACOs will be under pressure to provide high quality care in order to receive financial benefits, patients should ultimately receive better care

The ACO - Immediate Benefits for Delaware

Support for seniors

Last year, roughly 11,900 Medicare beneficiaries in Delaware hit the donut hole, or gap in Medicare Part D drug coverage, and received no additional help to defray the cost of their prescription drugs.

By August last year, 2,983 of seniors in Delaware had received their $250 tax free rebate for hitting the donut hole

The new law continues to provide additional discounts for seniors on Medicare in the years ahead and closes the donut hole by 2020

Free preventive services for seniors

All 140,000 of Medicare enrollees in Delaware will get preventive services, like colorectal cancer screenings, mammograms, and an annual wellness visit without copayments, coinsurance, or deductibles.

The ACO - Immediate Benefits for Delaware

Coverage expansions

$13 million from federal government will be available for Delaware State beginning July 1st to provide coverage for uninsured residents with pre-existing medical conditions through a new Pre-Existing Condition Insurance Plan program, funded entirely by the Federal government

This program is a transition to 2014 when Americans will have access to affordable coverage options in the new health insurance system and insurance companies will be prohibited from denying coverage to Americans with pre-existing conditions.

 

Small business tax credits

 

About 14,000 small businesses in Delaware will be eligible for the new small business tax credit that makes it easier for businesses to provide coverage to their workers and makes premiums more affordable.

  Small businesses pay, on average, 18 percent more than large businesses for the same

coverage and health insurance premiums have gone up three times faster than wages in the past 10 years.  

The ACO - Immediate Benefits for Delaware

Extending coverage to young adults

 When families renew or purchase insurance on or after September 23, 2010, plans that

offer coverage to children on their parents’ policy must allow children to remain on their parents’ policy until they turn 26, unless the adult child has another offer of job-based coverage in some cases

Health coverage for early retirees

An estimated 16,000 people from Delaware retired before they were eligible for Medicare and have health coverage through their former employers. Unfortunately, the numbers of firms that provide health coverage to their retirees have decreased over time.

This year, a $5 billion temporary early retiree reinsurance program will help stabilize early retiree coverage and help ensure that firms continue to provide health coverage to their early retirees. Companies, unions, and State and local governments are eligible for these benefits

 

The ACO - Immediate Benefits for Delaware

Improved Access to Care

Patients’ choice of doctors will be protected by allowing plan members in new plans to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.

More doctors where people need them   Beginning October 1, 2010, the Act will provide funding for the National

Health Service Corps i.e. $1.5 billion over five years for scholarships and loan repayments for doctors, nurses and other health care providers who work in areas with a shortage of health professionals. And the Affordable Care Act invested $250 million dollars this year in programs that will boost the supply of primary care providers in this country – by creating new residency slots in primary care and supporting training for nurses and physician’s assistants. This will help the 14% of Delaware’s population who live in an underserved area

ACO’s- SummaryACO’s = health care organizations and

related set of providers - primary care physicians, specialists, and hospitals that are accountable for the cost and quality of care delivered to a defined population.

The goal of the ACO’s is to deliver coordinated and efficient care.

ACO’s that achieve quality and cost targets will receive some sort of financial bonus, and, those that fail will be subject to a financial penalty

Concept of ACO’s

ACO’s make the people and organizations that actually provide care accountable for the quality and the cost of that care.

Previous health reform initiatives involved insurers and made them ultimately accountable.

The positive side of ACO’sBeneficiaries/patients will be able to go anywhere for care and will be

able to use any physician.Patients will be able to enroll for lower premiums.New programs will be available and some programs will be expanded.

For example, some services like screenings and vaccinations will become free.

There will be new rules. For example, lifetime limits on health coverage will be gone.

Insurers will be limited in how they spend premium dollars and they will no longer be able to turn people down or charge them more if they're sick.

Some small businesses will get tax breaks to help them pay for health insurance for their workers.

By 2019, 32 million of American citizens who don’t have health insurance will have it.

Negative side of ACO’s ACO’s will cost 938 billion dollars over the next ten years, according to the

Congressional Budget Office. A lot of the savings will come from health care providers and insurers in the

Medicare program. The fees the government pays to hospitals under Medicare won’t be allowed to rise

as fast as they have been. Insurance companies that provide services to people on Medicare will be paid less. A terrible business deal for providers. In order to get any shared savings, they will

have to spend millions on consulting, systems, care managers and IT staff, give up a dollar in immediately reduced income, and maybe, if they check all the boxes right, get 50 or 60 cents back in 18 months.

Further, some taxes will go up too. For example, people with high earnings will pay higher Medicare taxes.

There will be new taxes on insurers and businesses who offer high-end benefit plans, and on companies that make medical devices and drugs.

Do you like the new health care law, hate it, still don’t know? Any Questions?