Bowing to widespread criticism, the Centers for Medicare & Medicaid Services (CMS) made substantial changes to its proposed rule for accountable care organizations (ACOs). The final rule is likely to increase the integration of health care services provided by physicians, hospitals, and other caregivers and fundamentally change the way the government pays for services.
“This is the biggest structural change to the provision of health care in America since Medicare was initiated in the 1960s,” said Robert Provenzano, MD, Vice President of Medical Affairs for DaVita.
While the ACO rule is a good step forward, Dr. Provenzano and others said it does not make the government's model attractive for nephrologists.
“My reaction is that something else will eventually be needed for the patient with kidney disease,” said L. Lee Hamm, MD, who chaired the American Society of Nephrology task force that provided comments on the proposed ACO rule after it was issued last spring. Dr. Hamm is a nephrologist and Executive Vice Dean of Tulane University School of Medicine.
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Like other leaders in the nephrology community, he was disappointed that the ACO regulation did not address any nephrology-specific concerns.
The agency did, however, adopt substantial changes that made the ACO model more attractive for primary care physicians (PCPs) and hospitals. Among them:
* ACO participants have a greater chance of being financially successful in the ACO model because their risk is reduced.
* The number of quality measures that ACOs must report was reduced from 65 to 33.
* Some start-up costs have been reduced, including the requirement for use of electronic health record technology.
* CMS will notify ACOs up front about which of their patients are likely to be assigned to the ACO (although the actual assignment will occur retrospectively).
Those and other changes were well received within the health care community, which had shown nearly universal disdain for the original proposal. As a result, many primary care groups and hospitals reignited their plans to seek ACO contracts with CMS. The first ACO contracts go into effect April 1.
History of Integrated Care
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The disappointment on the part of nephrologists stems from their long-standing work to do just what the ACO model is set up to accomplish.
“It is felt that there is no other segment of medicine that is better prepared for the ACO risk model than nephrology,” said Dr. Provenzano, referring to the End-Stage Renal Disease (ESRD) Management Demonstration. “And we have a long history of providing integrated care data to the government … that was basically ignored.”
From the outset, CMS has maintained that primary care physicians should be at the heart of the ACO model because they should take responsibility for coordinating patient care delivered by subspecialists, hospitals, and other caregivers. Dr. Provenzano and many other nephrology leaders wanted CMS to make an exception that allowed for renal-specific ACOs.
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In a renal-specific ACO, nephrologists would have responsibility for coordinating their patients' care and would be able to share the savings generated for caring for a group of high-cost Medicare patients. In a primary care-led ACO, by contrast, kidney patients may be seen as costly problems when compared with the majority of other patients.
“How will our advanced CKD [chronic kidney disease] patients or dialysis patients be handled in a classic ACO?” said Ruben Velez, MD, President of the Renal Physicians Association. “That's the concern we have as a specialty.”
Andrew Howard, MD, Medical Director for two Fresenius Medical Care North America (FMCNA) facilities and Advisor to the FMCNA Medical Office, said Fresenius, DaVita, and others have applied to the Center for Medicare & Medicaid Innovation (CMMI) to establish a renal-specific ACO pilot. CMMI, created by the Affordable Care Act, seeks to test payment innovations through pilot and demonstration projects.
Many nephrology groups already know how to deliver the “Triple Aim” promoted by former CMS Administrator Donald Berwick, MD: better care for individuals, better health for populations of patients, and reduced per-capita costs.
“So, we are clearly succeeding in Dr. Berwick's Triple Aim, which pervades everything that CMS is all about at this point,” he said.
Despite his misgivings about the established model, Dr. Hamm encourages nephrologists to stay abreast of ACO developments in their markets. As the new model of health care payment is emerging, physicians must help influence it so that it works well for them and their patients.
“Nephrologists should engage with the people forming an ACO so that they are part of how this evolves, rather than waiting to see what evolves,” he said. “I hope they will be engaged in the process.”
Dr. Howard agrees. If primary care groups and hospitals organize an ACO in any community, patients with chronic kidney disease who are not on dialysis as well as ESRD patients on dialysis will be included in the population it serves—and that means nephrologists need to be involved in their care.
“The nephrologist is a critical component, working with the PCP, to successfully manage those patients,” he said. “That will ultimately lead to better quality of care and lower cost, which will result in the shared savings that all would be able to benefit from.”
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Dr. Velez, who heads 75-physician Dallas Nephrology Associates, points out that, in some markets, there will be multiple ACOs, and subspecialists can participate in all of them. An RPA task force is working on guidelines that will help nephrologists think through their options and decide on the best course of action.
“We don't need to make any fast decisions,” he said.
Accountable Care Organizations Explained
Under the Medicare Shared Savings Program, an accountable care organization (ACO) is a group of physicians and other providers who will work to reduce health care costs and meet quality standards for a specific population of patients and share the savings they create for the Medicare program.
The government's rule for ACOs applies only to those organizations that are contracting with the Centers for Medicare & Medicaid Services (CMS). Many private insurers are also entering into “shared savings” contracts with physicians and hospitals, using a wide variety of contract terms and definitions. Thus, a nephrology practice may participate in an ACO that contracts with a private insurer but opt not to join an ACO that contracts with CMS.
Among the government's requirements for accountable care organizations are:
* ACOs must consist of ACO professionals, a term that includes physicians, nurse practitioners, physician assistants, and clinical nurse specialists. A group of professionals can form a joint venture with a hospital, but an ACO does not have to include a hospital. Group practices and networks of physicians can contract as an ACO on their own.
* Each ACO must serve at least 5,000 Medicare patients who will be assigned to the ACO if they receive most of their primary care from the organization. At the beginning of the contract, CMS will identify the patients who, based on their past health care use, are likely to be accrued to a given ACO. However, the actual assignment of patients to the ACO for accounting purposes will be determined later, based on actual utilization.
* In 2012, CMS will initiate two contract periods: ACO agreements that go into effect April 1 will run for three years and nine months; agreements that begin July 1 will run for three years and six months. In 2013, all new ACO agreements will start on Jan. 1 and have three-year terms.
* ACOs can choose from two financial tracks: Track 1 is for ACOs that do not want to assume any financial risk in the event they do not save any money for Medicare, and Track 2 is for ACOs that are willing to share losses, if any, with CMS. The ACOs that choose Track 1 can share up to 50% of the savings they create for Medicare, as long as they save at a minimum rate. Because they accept greater risk, Track 2 participants can share up to 60% of the savings they create for Medicare.
* No “shared savings” will be calculated or distributed until an ACO meets quality standards. That means the ACO must hit acceptable scores on 33 measures that evaluate the patient/caregiver experience, care coordination/patient safety, preventive health, and at-risk population. In the first year of the ACO contract, ACOs must only report the measures; subsequently, ACOs will be judged on their actual performance on the various measures.
* CMS will set a risk-adjusted spending benchmark for each ACO based on the spending for the ACO's assigned patients during the previous three years. At the end of each year, CMS will calculate the difference between the ACO's actual spending and the benchmark. That is the “savings” that will be split between CMS and the ACO.
* ACO participants will divide their portion of the shared savings in whatever way they wish; CMS does not dictate the methodology.
© 2012 Lippincott Williams & Wilkins, Inc.