More physicians calling the shots in latest round of ACOs
■ Most of the new accountable care organizations approved by Medicare are led by doctors, who can share bonuses for keeping patients healthy and cutting costs.
By Charles Fiegl — Posted April 23, 2012
Washington Thousands of physicians will be among those coordinating patient care in the 27 accountable care organizations that were chosen in April to participate in the new Medicare shared savings payment model.
The Centers for Medicare & Medicaid Services selected physician groups, hospitals and health system organizations to be among the first networks that will share the potential rewards — and in some cases the risks — associated with coordinating quality and costs of care for beneficiaries, including at-risk populations. The newest organizations to be chosen, which involve more than 10,000 physicians, have agreed to coordinate care for nearly 375,000 Medicare beneficiaries, the agency said during an April 10 briefing with reporters.
In December 2011, 32 pioneer ACOs were selected for a similar shared savings initiative separate from the systemwide program. Medicare plans to approve more ACOs to join the 27 groups during the next several months, said Jonathan Blum, CMS deputy administrator. So far, CMS has received more than 150 applications seeking approval to participate in the second phase of the program, and the agency will announce the groups that qualify in July. Another round of applicants will be approved in January 2013.
The program is “off to a phenomenal start,” Blum said.
Organized medicine was pleased to see that 21 of the 27 ACOs would be physician-run. The American Medical Association also noted that five of the approved groups will participate under an advance payment model, which provides up-front funding from Medicare to cover the costs of establishing the infrastructure needed to coordinate patient care. Advance payments make it possible for smaller groups of doctors to participate in the program in a leadership role, said AMA President Peter W. Carmel, MD. More than 50 organizations have applied for the advance payment option beginning July 1.
“Allowing physicians in all practice settings and sizes to participate increases the number of Medicare ACOs and maximizes the benefits for patients, physicians, taxpayers and the Medicare system as a whole,” Dr. Carmel said. “CMS’ announcement today shows that many of the first ACOs will be led by physicians and build on existing physician-patient relationships. This is critical to successfully improve the quality of patient care while reducing costs.”
Doctors leading coordination charge
Even in some of the new ACOs that involve hospitals, physicians say they still are playing a major leadership role in care coordination.
Plymouth Bay Medical Associates, Jordan Physician Associates and a number of specialty physicians from Jordan Hospital joined to form Jordan Community ACO in Plymouth, Mass. Physicians in the network will coordinate care for more than 6,000 Medicare patients.
The ACO is structured so that physicians and the hospital have an equal say in how the organization will operate and share in any savings. The pool of doctors, who mostly are primary care physicians, and the hospital each have one vote, and a majority is needed to move forward. That effectively means decisions must be unanimous or both sides continue negotiating, said James Fanale, MD, senior vice president of system development at Jordan Hospital.
Like the other 27 approved ACOs, the network aims to improve quality to lower costs. For instance, the ACO will focus on coordinating care to keep hospital readmission rates low, Dr. Fanale said. “If the patient doesn’t show for an appointment, we can schedule a visit with a physician assistant or send someone out to their home.”
Plymouth Bay Medical Associates already has many patients enrolled in risk-based care management, said Eric Johnson, MD, the group’s president. Medicare’s ACO program was a natural fit for the group because it already has other risk-sharing agreements with hospitals and insurers.
The ACO will be looking for Medicare patients to be active rather than passive participants in the care model. “Patient education is paramount for any project to work,” Dr. Johnson said.
The CMS rules for the program allow for prospective assignment, so doctors know which patients are participating in an ACO for the purposes of calculating any shared savings. But beneficiaries still retain the right to choose physicians outside an ACO.
“We are excited to have the opportunity to serve our Medicare patient populations as an accountable care organization and to move our community closer to realizing the goals of true health care reform — improved quality, improved patient experience and lower cost,” said Dennis Horrigan, president and CEO of Catholic Medical Partners in western New York. The network of 900 physicians serving the Buffalo area will coordinate care for 31,000 beneficiaries.
Lower bonuses but less risk
Only two of the 27 approved ACOs agreed to be held accountable for a share of any losses if Medicare costs for the patients receiving coordinated care exceed projections. The rest of the groups will not be exposed to possible penalties, but they will be eligible for a lower share of potential savings compared with the two ACOs exposed to risk.
This outcome supports the contention that the government needed to offer a payment track that was risk-free to encourage doctors and hospitals to participate, said Robert Belfort, a partner at New York law firm Manatt, Phelps & Phillips. Initially, CMS had proposed two tracks that each carried some degree of risk. But physicians and practice administrators criticized that proposal and predicted that the prospect of harsh penalties would dissuade groups from participating.
CMS finalized the program in October 2011 by creating a track that would be free of extra financial risk outside of startup costs that some groups would need to form ACOs.
“Even in the no downside risk model, there is still risk because of investments made in health information technology and hiring case managers,” Belfort said. “All that costs money with no certainty of a return.”
ACOs will be evaluated for shared savings from April 1, 2012, through Dec. 31, 2013. Groups have the opportunity to share in some of any savings after 12 months through an interim reconciliation process, said Ellen Griffith, a CMS spokeswoman. CMS requires a period of months to analyze claims and finalize results, so the first interim payments are expected to be sent to groups during the summer or fall of 2013.
In addition, physicians reporting quality measures under the shared savings program will qualify for additional Medicare bonuses through the physician quality reporting system, she said.