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Is ACO Success a Compliance Nightmare?MargaretJ.Hambleton,CHC,MBA,CPHRMSr.VicePresident,MinistryIntegrity,ChiefComplianceOfficerSt.JosephHealth
BarbaraLetts,SeniorManager‐ HealthCareConsultingGroupMossAdamsLLP
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OBJECTIVES
• OverviewoftheACOBusinessModel• UnderstandtheeffectofanACOonthedeliveryofcare
• Complianceissues,barriers,andongoingmonitoringneeds
Thematerialappearinginthispresentationisforinformationalpurposesonlyandisnotlegaloraccountingadvice.Communicationofthisinformationisnotintendedtocreate,andreceiptdoesnotconstitute,alegalrelationship,including,butnotlimitedto,anaccountant‐clientrelationship.Althoughthesematerialsmayhavebeenpreparedbyprofessionals,theyshouldnotbeusedasasubstituteforprofessionalservices.Iflegal,accounting,orotherprofessionaladviceisrequired,theservicesofaprofessionalshouldbesought.
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THE HEALTH CARE DILEMMA: ARE ACOS THE ANSWER?
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WHAT IS CONTRIBUTING TO WHAT IS OCCURRING IN OUR INDUSTRY?
• Cost,costandmorecost,yearafteryear• Therecession‐ healthcarecostdoesnotflexdown
• Healthcarebecamepoliticalbecausethebudgetispolitical
• …andbecausewedidn’tfixourownproblemsasanindustry
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NHE as a % of GDP
Source:CentersforMedicare&MedicaidServices(CMS)
Total 5.9 6.7 7.8 8.6 10.2 11.7 13.6 13.5 15.6 17.3 17.4 19.3
THE VALUE EQUATION IN HEALTHCARE
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THE VALUE EQUATION IN HEALTHCARE
*Estimateisstatisticallydifferentfromestimateforthepreviousyearshown(p<.05).Source:Kaiser/HRETSurveyofEmployer‐SponsoredHealthBenefits,1999‐2010.
$5,791
$6,438*
$7,061*
$8,003*
$9,068*
$9,950*
$10,880*
$11,480*
$12,106*
$12,680*
$13,375*
$13,770*
Average Premiums
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AVERAGE ANNUAL COST COMPARED TO LIFE EXPECTANCY
Source:AdaptedfromdataprovidedbytheWHO
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
72
74
76
78
80
82
84
Japan Italy Canada France Germany UnitedKingdom
Cuba UnitedStates
China
The Cost of a Longer Life ‐ 2009/2010 Data
Life expectancy atbirth, 2009 (years)
Per capita totalexpenditure onhealth, 2010 ($)
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WHERE ARE THE COSTS CONCENTRATED?
Source: Agency for Healthcare Research and Quality analysis of 2009 Medical Expenditure Panel Survey.
Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2009
1%5%
10%
50%
65%
22%
50%
97%
$90,061
$40,682
$26,767
$7,978
Annual mean expenditure
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A FRAMEWORK THAT WORKS
IrrespectiveofthecontinuationoftheACAortheindividualmandate,whathavewelearnedaboutvalue?
Incentivesmustbealignedtopromote
behavior
Clinicalintegrationandcare
coordinationdrivequality
Qualitypromoteshealthandisa
meanstoefficiency
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STAGES OF ACCOUNTABILITY
Rewards Patient Volume
Rewards Patient Health
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ACOS
What’stheidea?Capturingapopulationandcontrollingcostandqualityofcareforthatpopulationwhileallowingthemtocontinuetohavefullchoice
Whatarethebenefits?• Sharedsavings• Patientslikelytohaveabetteroverallhealthcareexperienceina
coordinatedsystem• Qualityislikelytobeenhancedbecauseofcoordinationandaligned
incentives
Who’sready?• Manyprovidersarealreadyinnetworks– ACOslikelywillserveto
increasecollaboration– IDS’s,hospitalsthatemployphysicians• Existingriskbearingorganizationswillincrease“membership”and
alreadyhaveinfrastructureandexperienceinmanagingrisk• FFSmulti‐specialtymedicalgroupsandclinicorganizationslikelyhavea
lotoftheinfrastructureandhaveanopportunitytotryriskonforsize
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CMS ACO PROGRAMS
• SharedSavingsProgram(SSP)o 27newACOslaunchedinApril2012o AdvancePaymentModel(introducedbyCMMI)
Fiveorganizationswillparticipate Assistwithstart‐upresourcestosafety‐netproviders(criticalaccess,rural,andphysician‐owned)tofosterparticipation
• PioneerACOModel(introducedbyCMMI)o 32newACOslaunchedinJanuary2012
• PhysicianGroupPracticeTransitionDemonstrationo Afterfive‐yearpay‐for‐performancedemo,sixlargephysiciangroupslaunchedasnewACOsinJanuary2011toparticipateinasharedsavingsagreement
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WHERE ARE THE CMS ACO PROGRAMS?32 PIONEER AND 27 SSP
Source: The Advisory Board Company – Health Care Advisory Board1 Centers for Medicare and Medicaid Services; Health Care Advisory Board analysis.
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COMMERCIAL ACOS
• EvenbeforethepassageofACA,organizationswereexploringsharedriskandintegratedcaredeliveryo BlueShieldofCalifornia,CalPERS,HillPhysiciansMedicalGroup,andDignityHealth
o Brookings‐DartmouthACOPilotProgram(5pilotsites)
• Gainingmomentumo FivenewcommercialACOsannouncedsinceJanuary2012
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ACO CHALLENGES
• Resourceandcapitalinvestmento Managemento Healthinformationtechnologyo Developmentofcaremanagementprocesseso Implementationofcomplianceprogramso Restructuringofinternaloperations
• Navigatingthroughthelegalandcontractualarrangementso Patientattributionmethodso Data‐sharingagreements
• Downsideriskiftherearefinanciallosses
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ACO CRITICAL SUCCESS FACTORS
• Breadthofnetwork(specialties,settings)andavoidleakage
• Identifyopportunitiestoreduceunnecessaryservicesandcostsforgivenpopulation
• Collaboration(trustandsharedvision)withstrongphysicianengagementtoleadcostreductionandmeetqualitymeasures
• ITintegration• Qualityandperformanceimprovement• Plusforthoseexperiencedinmanagingriskthroughcapitation
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ACO COMPLIANCE ISSUES, BARRIERS, AND ONGOING MONITORING NEEDS
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COMPLIANCE READINESS ASSESSMENT
• Alignmento Currentlevelofalignmentbetweenphysiciansandhospital.
o Matchingvalues,culture,objectiveso Abilitytoworkasateam
• Technologyo FullydevelopedEHRo Availabilityforsharingdataandcoordinatingcare
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DATA REQUIREMENTS
• Marketassessment• Populationassessment• Qualitymetrics• ActualcostattheDRGandCPTlevel
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MEDICARE SHARED SAVINGS PROGRAMAPPLICATION
• GoverningBodyo 75%mustrepresentACOproviderso MustincludeMedicarebeneficiarieso Musthaveconflictofinterestpolicyincludingdisclosureoffinancialinterestsandmethodforremediatingconflicts
• Managemento OperationsmustbedirectedbyanexecutiveunderthecontroloftheGoverningBody
o ClinicalManagementmustbedirectedbyaboardcertifiedphysician
o ACOrequiredtodescribehowitwillestablishandmaintainanongoingqualityassuranceandimprovementprogramledbyaqualifiedhealthcareprofessional
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MEDICARE SHARED SAVINGS PROGRAMAPPLICATION (CONTINUED)
• Applicantsmustbeabletodescribe:o ACOparticipants’rightsandobligationso Scaleandscopeofqualityassuranceprogramso Clinicalintegrationprogramsandinternalperformancestandards
o Howsharedsavingspaymentswillbeusedanddistributedo Planstopromoteandevaluateuseofevidence‐basedmedicineo Patientengagementandpatient‐centeredness,includingexperience‐of‐caresurvey
o Qualityandcostmetricso HowACOwillcoordinatecarewithoutimpedingthebeneficiaryfromseekingcareoutsidetheACO
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MEDICARE SHARED SAVINGS PROGRAMAPPLICATION (CONTINUED)
• Applicantsmustbeabletodescribe:o HowpatientswillbeinvolvedinACOgovernanceo HowtheACOwillevaluatethehealthneedsoftheassignedpopulationandhowthoseneedswillbeaddressed
o Usesystemstoidentifyhigh‐riskindividualsanddevelopindividualizedcareplans
o Howcarewillbecoordinatedalongthecontinuumo HowcareinformationwillbeexchangedinoroutsidetheACO
o Internalprocesstomeasureclinicalandserviceoutcomesbyphysicianandtoimproveovertime
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COMPLIANCE PLAN
• CompliancePlano Mustincludemethodsforidentifyingandaddressingcomplianceproblems
o Hotlineorothermethodforanonymousreportingo Compliancetrainingo Complianceofficer(cannotbelegalcounsel)reportingdirectlytothegoverningbody
o Requirementofreportviolationsoflawo Planmustbeupdatedtoreflectchangesinlawsandregulations
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BENEFICIARY PROTECTIONS
• BeneficiaryNotificationo CMSwilldevelopcommunicationplano ACOmustnotifyatthepointofcarethattheyareparticipatingintheSharedSavingsPrograms
o Postingrequirement• MarketingMaterials
o ACOmustcertifythatallmaterialsmeetmarketingrequirementso 5dayCMSreviewperiodo CMSdevelopedtemplatematerials
• InducementstoBeneficiarieso Prohibitedfromofferinggifts,cashorotherremunerationasinducementtoreceiveservicesorstayintheACO
o Myofferfreeservicesordiscountstoencouragecoordinationofcareandhealthawareness
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MONITORING REQUIREMENTS
• Applicationcommitments• Publicreportingrequirements• Datacertification
o FalseClaimsActviolationforprovidinginformationknowntobefalse
• Qualityperformanceo 33measures‐ patientexperience,outcomesandcareprocesses,preventionandmanagementofchronicdiseasesthathaveahighimpactonbeneficiaries Year1– PayforReporting Year2– 8measuresPayforReportingand25PayforPerformance Year3– 1measurePayforReportingand32PayforPerformance
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MONITORING REQUIREMENTS
• AvoidanceofAt‐RiskBeneficiarieso CMSwillmonitormarketingandservicestoat‐riskbeneficiariestoidentifytrendssuggestinganACOisavoidingat‐riskbeneficiaries
o UnderutilizationbyACOmemberso OverutilizationbymembersoutsidetheACO
• ReferralsandCostShiftingo ACOsprohibitedfromrequiringparticipantproviderstorefernon‐ACOservicestoACOproviders
o ACOcannotrequirethatbeneficiariesbereferredonlytoACOproviders
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MEDICARE ACOS VS. COMMERCIAL ACOSDIFFERENT COMPLIANCE REQUIREMENTS
• FraudandAbuseWaiversforMedicareACOso Pre‐participation:appliestoACOrelatedstart‐uparrangementsinanticipationofparticipation
o Participation:appliestoACOrelatedarrangementsduringthetermofparticipation
o SharedSavingsDistribution:appliestodistributionsanduseofsharedsavingspayments
o PhysicianSelf‐Referral:providerswithcompliantrelationshipsnorequiredtoundertakeseparatereview
o Patientincentives:appliestomedicallyrelatedincentivestobeneficiariestoencouragepreventivecareandcompliancewithtreatmentplans
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ANTITRUST ENFORCEMENT
• PolicyappliestocollaborationsofindependentprovidersandprovidergroupsthatwillconstitutetheACO,notomergersorfullyintegratedorganizations
• RuleofReasontoACOthatmeetsCMS’seligibilityrequirements
• ACOAntitrustSafetyZone
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TAX EXEMPT STATUS
• Arrangementbetween501(c)(3)andACOwillnotresultinanimpermissibleprivateinurnmentofprivatebenefitsif:o Setforthinwriting,negotiatedatarm’slengtho ACOhasbeenacceptedintotheMedicaresharedsavingsprogramandisnotterminated
o The501(c)(3)receivesbenefitsfromtheACOthatareproportionaltothebenefitstheACOreceivesfromtheentity
o Theownershipshareisproportionatetoitscapitalcontributiono Theentity’sshareoflossesdoesnotexceedtheshareofeconomicbenefitsitisentitledto
o TheACOtransactsbusinessatfairmarketvalue• OnecharitablepurposemaybelesseningtheburdensoftheGovernment,doesnotapplytocommercialACO’s
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SUMMARY
• Understandthemodelyouareconsidering• Understandyourdataanddatafromproposedpartners
• Extensiveduediligence• Extensiveperformanceandcompliancemonitoring
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