The New Jersey Health Care Quality Institute (NJHCQI) brought together several distinguished experts to discuss the development of and implications for the new accountable care organization (ACO) models and rules being established on a federal and state level for Medicare and Medicaid. The focus of the seminar was on exploring what ACOs were (and what they were not), as well as the anticipated CMS rule and pending New Jersey legislation for a Medicaid ACO demonstration project. Speakers included, among others, David Knowlton, President and CEO of the NJHCQI, Jonathan Blum, Deputy Administrator and Director for the Center of Medicare, CMS, and Dr. Jeffrey Brenner, founder of the Camden Coalition of Healthcare Providers.
The keynote speaker, Jonathan Blum, discussed CMS’ views for the forthcoming CMS Rule on ACO participation in the Shared Savings Program established by the Patient Protection and Affordable Care Act (PPACA). Anticipated by mid-January, Blum noted that the focus would be on both quality and cost-control, not just solely for participants for the Medicare program, but for the broader scheme of health care delivery systems and all other payors on a state and private level. Mr. Blum provided ten central principles that the anticipated Notice of Proposed Rulemaking would center around:
- ACOs are not one-size fits all and therefore the Rule will need to respond to and attract large integrated hospital systems, small and medium sized physician groups, and hospital-physician groups. Mr. Blum acknowledged that this could require different payment models and “entry ramps” that would create multiple pathways suitable for different types of organization as well as populations (eg., urban or rural).
- ACOs must change patient care. The ACO structure must move away from uncoordinated and fragmented care and move towards coordinated, patient-centered “journeys.”
- ACOs must prioritize clinical quality and standards. The Rule will strive to ensure that delivery systems reward outcomes and processes, as well as focus on improving patient experiences and responding to patient expectations. Mr. Blum noted that the Rule will almost certainly establish quality measures that ACOs will need to meet.
- ACOS are about constant improvement and evolution. Although the Rule will certainly set benchmarks and standards, CMS is aware that there will need to be a constantly evolving process, with updated payment rules and policies each year, as well as policies that incentivize (not dictate) organizations to invest in health information technology and other vital improvements.
- ACOs must include data-exchange solutions for understanding patient histories and identifying high-risk patients. Mr. Blum noted that CMS is very much aware of the culture of privacy and confidentiality that this conflicts with at the same time as understand the need for information to be shared with doctors and CMS.
- ACOs must involve communication to patients. Patient advocacy and notice of participation is key. Patient-beneficiaries will be notified when being assigned to an ACO, and Mr. Blum highlighted how notice helps patients understand the incentives their physicians have in participating in ACOs but at the same time understanding also the benefits their participation in an ACO will result in.
- ACOs are NOT just about signing up and taking a gamble that it will work, or attempting to maintain the “status quo.” Mr. Blum noted the Rule will take this in to account and create mechanisms to ensure that organizations seeking to participate share the same values that CMS does towards improving quality and controlling costs.
- ACOs are NOT about dominating markets. Mr. Blum underscored how CMS was well aware of the antitrust implications of ACOs and gave assurances that CMS was working with the DOJ and OIG to ensure the Rule would be compliant and not create anticompetitive concerns.
- ACOs are NOT about changing the nature of the underlying Medicare fee-for-service structure. Mr. Blum emphasized that the Rule will not take away rights for beneficiaries to receive care from different hospitals or physicians.
- ACOS are NOT static. They must be constantly evolving, creating new models and striving to meet the concerns of organizations and patients as they emerge.
Questions asked of Mr. Blum by attendees revolving around how exactly the proposed Rule would address anticompetitive concerns for multi-hospital concerns, what the ACO model would look like (physician-led, hospital-led?) and how the Rule would address the conflict of patient-choice and a cohesive coordinated system of care. Mr. Blum, although unable to provide specifics, noted that the Rule would try to capture multi-system patients in one-system of care while balancing market concerns and competiton, avoinding monopoly creating incentives. He also acknowledged that PPACA was somewhat inconsistent in striving to maintain patient choice but yet seeking a coordinated system of care, and that the Rule would seek to establish incentives for patients to stay with providers in an ACO, noting that “creation of demand for quality of care” was a key for success. He also focused on the role of physicians in ACOs as a key success and although not embracing any one ACO model, stated CMS would try to make participation attractive to all types of leadership roles. Finally, Mr. Blum emphasized again how important it was for ACO organizations not only to “work for CMS” but to work for other payors, including Medicaid.
Jeffrey Brenner focused on the establishment of Medicaid ACOs in NJ, highlighting the problems in the past of increasing volume without increasing quality of care for patients. The goal of ACOs, he emphasized, was to move away from volume, and instead towards increasing quality and lowering costs. The legislation introduced into NJ would be that aimed towards “safety-net” ACOs with a focus towards better primary care that was community-based, not hospital-based. The board would be composed of providers, hospitals, social service providers AND patients within the organizations chosen geographic area. He then focused on why ACOs are necessary, emphasizing that the nation as a whole, including NJ, was going broke, and how NJ in particular was an outlier in hospitalization and care. He highlighted that cost-shifting methods and remote care management simply did not work to reduce costs, and that hospitals needed assistance transitioning, or face mass closings, in response to the shift in volume expected from ACOs. Finally Mr. Brenner re-emphasized that the NJ Medicaid ACO model will seek to develop mechanisms for delivering ground-up, high quality care.
Representatives from the business community stressed that quality and access to care was critical to businesses and that the NJ ACO legislation had the full backing of the Chamber of Commerce and business community. Mr. Wilson, from the Kaufman Zita Group, noted that the goal was to have the legislation passed, in full, by March, and that as many problems and concerns of stakeholders would be addressed as possible.
The general concern among attendees appeared to revolve around ensuring that all social service providers and community representatives were included within the ACO structure, as well as general antitrust and anticompetitive concerns. Of particular concern to some was the transition process and the difficulties hospitals would face in light of the new legislation and Mr. Brenner acknowledged that while the transition would likely be “messy”, hospital closings, where necessary, would need to be done methodologically and carefully and noted that the legislation would help at-risk hospitals learn the skills they need to reinvent themselves in the wake of the ACO movement. And finally, some expressed concern that the NJ Medicaid ACOs would not be able to “stand on their own” if PPACA were repealed at the federal level. Panelists stressed that the NJ legislation was entirely independent of PPACA. Because the ACO model predated the Act, they felt that it would continue even if the remote possibility of PPACA’s repeal came true.
JAMA recently published an article noting that:
Proponents hope that ACOs will allow physicians, hospitals, and other clinicians and health care organizations to work moreeffectively together to both improve quality and slow spending growth. Skeptics are concerned that ACOs will focus narrowly on their bottom line and either stint on needed care or use the leverage they achieve through local integration to demand unreasonable prices from payers…. It is likely that the success of ACOs (and the many other payment-reform initiatives included in the Affordable Care Act) will depend in large part on whether the Centers for Medicare & Medicaid Services, private payers, physicians, and health system leaders can work together to establish a tightly linked performance measurement and evaluation framework that not only ensures accountability to patients and payers, but also supports rapid learning, timely correction of policy and organizational missteps, and broad dissemination of successful organizational and practice innovations." (emphasis added).
For additional information about the PPACA the AMA has a good summary posted that is worth checking out. To receive a copy of our health law bulletin discussing antitrust and other legal issues for ACOs, including privacy laws that continue to affect how health information exchange among providers may occurr, even in the ACO context, submit your request to firstname.lastname@example.org.
This post was prepared with assistance from Krystyna Nowik, Esq.