Accountable Care OrganizationsThe Camel’s Nose Is In The Tent

David Harlow JD MPHTHE HARLOW GROUP

LLCblog • healthblawg.com

twitter • @healthblawg

November 8, 2012 Baton Rouge, LA

23rd AnnualLouisiana Society of Hospital Attorneys

Health Law Symposium

We are challenged by shifting sands

High-performing health care providers can be integrated into

high-performing health care systems

What are the federales trying to

accomplish?

The “Triple Aim”

Better careBetter health Lower costs

ACO: Getting more elegant?

ACO: Drop in the bucket?

ACO: Getting more elegant?

Value-Based Payment

ACO is one tool to get providers to manage a population of

patients

How? Financial incentives.

BillingsDartmouth

EverettForsyth

GeisingerMarshfield

MiddlesexPark Nicollet

St. John'sMichigan

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

Yr 1 Yr 2

Yr 3 Yr 4

Yr 5

Graphic courtesy Jaan Sidorov, Disease Management Care Blog

What is an

ACO?

ACO BasicsSingle entityThree-year commitmentOne-way or two-way risk-sharingPCPs and broader network 5000 patient minimum

33 performance measures Patient engagement Patient-centeredness Stark/AKS IRS Antitrust

Proposed Rule versus Final Rulehttp://j.mp/ACOchart

http://j.mp/ACOqualitymeasures

Final ACO quality measures

ACO regulations coordinate

across numerous Federal

agencies

All in all, ACO risk/reward ratio seems skewed

IT infrastructure cost estimate >$1.5m

Success requires both:Conversion of health systemdata to actionable intelligence

Clinical Integration

&

More details from the ACO rules, and traps for the unwary

Over 60% of health care provider executives said they intend to form an ACO before the rules were out

Culture of Collaboration

Opportunities for physician-led ACOs

Even if an ACO is not in your immediate future, these principles

will affect you

Bundled Payments

Commercial ACOs

Pay for Performance

Other Innovations

Commercial plans are non-standardized

Jeff Goldsmith: Suggests 3 commercial ACO payment systems

for 3 different types of providers

•Risk-adjusted capitation

Primary

•Fee-for-service

Emergency

•Bundled payments

Specialty

MSSP is just one arrow in the quiver

•Medicare Shared Savings Program – “Traditional” ACO•Advance Payment Initiative•Pioneer ACO•Other CMS Innovation Center Initiatives

Bundled PaymentsComprehensive Primary Care InitiativeFinancial Alignment InitiativeFQHC Advanced Primary Practice DemoGraduate Nurse Education DemoHealth Care Innovation AwardsIndependence At Home DemoInitiative to Reduce Avoidable Hospitalizations Among Nursing Facility ResidentsInnovation Advisors ProgramMedicaid Emergency Psychiatric DemoMedicaid Incentives for the Prevention of Chronic DiseasesMillion HeartsPartnership for PatientsCommunity-based Care Transitions ProgramState Innovation Models InitiativeStrong Start for Mothers and NewbornsFor details, see: innovations.cms.gov/initiatives/

CMS Bundled Payment Initiative

Bundled Payments

ACO “lite”MS-DRG-specificGainsharing

. . . Bundled Payment Pilot - 2013

Medicare FFS Reimbursement

Discount incorporated

into target price

Potential shared savings

Actual cost of providing bundle of services

Bundled Payments

CMS payment

Care Coordination Initiatives

What can you do now to prepare for the future?

Physicians are central to

the development

of an accountable

care organization

You cannot manage what you do not measure

Opportunity for all providers: Be the go-to (cost-effective) guys (or gals)

.

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harlowgroup.nethealthblawg.com

twitter.com/healthblawgdavid@harlowgroup.net

Thank YouDavid Harlow JD MPHTHE HARLOW GROUP

LLC