Operating an ACO - Part 2 June 23, 2011. Speakers David Jones – CureIS Healthcare, Inc....
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Transcript of Operating an ACO - Part 2 June 23, 2011. Speakers David Jones – CureIS Healthcare, Inc....
Operating an ACO - Part 2June 23, 2011
Speakers
• David Jones – CureIS Healthcare, Inc. (Minneapolis, MN)
• Michael Kosir – Initiate Consulting (St. Paul, MN)
Presentation Overview
1. What got us here2. Why ACO | Why Now3. Commercial vs Government ACOs4. Medicare Shared Savings5. Governance6. Data Driven7. Care Management8. Financial Formula9. Summary
Texas Workers Compensation Research Institute33% expenditure difference across state…with near-equal outcomes.
Striking the Balance: An Analysis of the Cost and Quality of Medical Care in the Texas Workers’ Compensation System
Global The Commonwealth FundU.S. = highest cost but last in outcomes.2007 study of 6 industrialized countries
Texas New Yorker 50% Medicare expenditure difference between
similar health populations of El Paso & McAllen.
A Cost Conundrum: What a Texas Town can teach us about health care
What Got Us Here
Runaway Inflation
What Got Us Here
Spending on Health Care ServicesIn 2005 dollars
1965$187 Billion
2005$1.9 Trillion
4.9%
Source: Congressional Budget Office based on health services and supplies, as defined in CMS national health expenditure accounts.
Average Annual Growth
Average annual GDP growth2.1%
5.1%of GDP
17.6%of GDP2009
EvolutionWhy ACO | Why Now
Fee For ServiceInsurers pay for transactions
HMOControlled reimbursement | some quality
Domestic Medicine1:1 doctor – patient relationship
Employer-based CareEmployed physicians serving employees
Medical HomeMedical team
ACOPatient-centered care controlled by medical professionals
Commercial• Patients Assigned
• Patients Free to Roam
• Patients Stay in Medicare
• Payment/Penalty Terms Set
• Quality Measures in Place
• Pioneer Option
• Patients Engaged
• Patients Corralled
• Patients Change
Jobs/Plans
• Payment/Penalty Terms Negotiated
• Quality Measures
Similar
ACO Differences
Medicare
Medicare Shared Savings Program
Objectives (3 Part Aim)
1 Better Care for Individuals
2 Improved Health for Populations
3 Lower Growth in Expenditures
Qualified & Quantified!Data Information Data Information Data Information Data Information Data Information Data
Medicare Shared Savings ProgramRequirements
• Minimum term 3 years
• Financial means to repay losses & facilitate receipt/distribution of savings
• Minimum Medicare beneficiaries 5,000
• Leadership & management for both clinical and administrative activities
• Information Infrastructure ability to evaluate data & give feedback to
organization
• Shared governance representing beneficiaries, community partners, and
provider/suppliers
• Provider Driven 75% of governing body must be ACO participants
• Public reporting of ACO performance and operational metrics
and more…
Technology Component Definition Examples
Financial Infrastructure
Ability to accept, track allocate payments associated with performance results
•Validate budget goals based on beneficiary population•Track performance payments received•Administer payment to participants
Reporting Infrastructure
System to share performance data with payer, management and participants
•Monthly performance reports•Population management trends (disease/case management)•Utilization practice variance reports
Performance Management
Dynamic reports and dashboards supported with proactive alerts and tasks.
•Disease-specific reports/alerts (CHF, COPD)•Actual results vs. benchmarks (ALOS, readmissions)•Adherence to evidence-based medicine
Data Aggregation
Meaningful joining of all data to create a holistic view of population’s care experience
•Sharing all data (Lab, radiology, pharmacy, etc.)•Disease Registry
Data & Information Drive Success
Governance – It REALLY Matters
A commitment by leadership to improve value as a top priority + a system of operational accountability to improve performance at the following levels:
– Care Management• Total Medical Leadership Commitment
– Administrative • Active Medical Leadership Participation
– Marketing• Active Medical Leadership Participation
– All Else• Active Medical Leadership Participation
If not engaged
nothing else matters
Care Management
Critical Aspects• Early diagnosis & intervention diabetes, CHF, COPD, etc.
• Active application of best practices alerts, etc.
• Peer review participating providers
• Reduction of unnecessary ER visits
• Reductions of hospital readmissions alerts, etc.
• Creative patient education services e-mail, text, etc.
Opportunities are endless…
Patient Satisfaction
Build it… they may not comeOne of the 5 quality domains is Patient/Caregiver Experience. Simple
Patient surveys assess the following:• Getting Timely Care, Appointments, and Information• How Well Your Doctors Communicate• Helpful, Courteous, Respectful Office Staff• Patients' Rating of Doctor• Health Promotion and Education• Shared Decision Making• Health Status/Functional Status
Imagine if 20% of your shared savings were determined simply by
measuring patient satisfaction.
Quality
• 65 Measures• 5 Domains includes patient/caregiver experience
• 6 Core disease states• PQRI limits• EHR Meaningful use
and more…
Medicare Shared Savings ProgramThe Basic Formula
FFSMinimum Quality
Minimum Savings
+ [ + = $
How It Works
Intent: increased quality and increased savings equals increased
sharing.
]
Formula: Components
One Sided• Shared savings payments for achieving cost
saving benchmarks
Two Sided• Shared savings payments (higher percentage)
for achieving cost saving benchmarks• Repayment of shared losses
All ACOs will operate under the two sided model in year 3 of the initial contract period and thereafter.
Formula: Components
Number Beneficiaries One Sided Two Sided
MSRSliding Scale
Set @ 2%
FQHC/RHCUp to 2.5%
Up to 5%
Savings Share Maximum 7.5% of
benchmark
10% of
benchmark
Shared Savings50% 60%
Shared Losses Greater than 2% of benchmark NA Maximum – 10%
Minimum savings rate for each one sided ACO based on the number of beneficiaries assigned. MSR calculated as follows:
Number Beneficiaries
MSR (low end)
MSR (high end)
5,000 - 5,999 3.9% 3.6%
6,000 - 6,999 3.6% 3.4%
7,000 - 7,999 3.4% 3.2%
8,000 - 8,999 3.2% 3.1%
9,000 - 9,999 3.1% 3.0%
10,000 - 14,999 3.0% 2.7%
15,000 - 19,999 2.7% 2.5%
20,000 – 49,999 2.5% 2.2%
50,000 – 59,999 2.2% 2.0%
60,000 + 2.0%
Formula: Components
Formula: Components
• Retrospective benchmarks = 3 years of data (weighted 60%. 30%, 10%)
• No prescribed payments
• Payments to TIN
• Forfeit savings if ACO departs program early
• 25% withhold of shared savings payment to offset possible future losses (2-sided only)
Formula: An Example
New Way ACO 1-Sided Model
20,000 patients @ $8K average cost/yr (3 yr historic avg.)
Benchmark = $160M2.5% MSR = $4M
Target Spend = $156M
Performance Year 1 = $140MNet Savings = $20M
50% of Savings = $10MFQHC/RHC 2.5% Credit = $0.5M
Total Savings Share = $10.5MMaximum = 7.5% of benchmark ($12M).
New Way keeps everything.
Sharing
Sharing the Savings
You Decide!
Summary
If You Remember Nothing,Remember This:
• Medical Leadership Engagement• Data & Information• Quality Care• Patient Satisfaction• Know Your Formula
Upcoming Webinars
Understanding Regulations of ACOsJuly 14, 2011
For more information and to register, visit www.aaacountablecare.org
For More Information
