Change is Here
Since the passage of the Affordable Care Act in 2010, the industry has begun a disruptive shift from payments based on number of visits to payments based on quality metrics and cost savings. And even though we are just at the base of a rising quality/penalty reimbursement curve, providers are already feeling the effects of the value-based payment structure.
*Payments based on quality metrics and cost savings vs. number of visits
Did you know that only 6% healthcare dollars spent go to primary care physicians? The reality is that Primary Care Physicians are already being impacted by value-based payments and the changes have only yet begun.
Medicare FFS will shift to value-based programs with risk sharing by 2019
Privately insured patients falling under value-based payments by 2017
Private Practice Pressure
$85kAverage practice billing claims cost per FTE physician & rising
31%Decrease in patient office visits since 2000
$52kAverage practice IT cost per FTE physician and rising
70%of physicians spend an average of 3 days per week on paperwork
Challenging Future Ahead
Although this shift represents a first step to a fresh start for a better, smarter Medicare that fosters healthier patients and a sustainable ecosystem, it will have significant and long-reaching impact on Independent providers.
Advanced Alternative Payment Model (APM)
Most Commonly Known as Accountable Care Organizations (ACOs)
- Additional 5% lump sum bonus is available to Qualified Participants (QPs) which is not available under MIPS
- ACO leverages regulations in your favor and mitigates risk
- ACO provides stepwise, built-in programs and technology proven to achieve: quality, efficiency meaningful use and practice improvement requirements
Merit Based Incentive Payment System (MIPS)
- PCPs bear 100% of the brunt for: quality, efficiency, EHR meaningful use and clinical practice improvement activities.
- You are on your own for learning curve, technology and program expense and risk
- Odds stacked against independent providers with 87% of solo practitioners projected to incur ongoing penalties under MIPS
APM: ACO is the Answer
The future will require independent provider to do much more with less, managing the health of more patients while keeping tighter control on quality, service and efficiencies. Success and longevity will depend upon the long-term alliances formed today. That long-term alliance is the APM Accountable Care Organization (ACO).
An ACO is a group of health care providers who voluntarily band together to share the responsibility for providing care to a particular, defined patient population. Collaborating makes managing the quality and cost of care for these patients across multiple settings (primary and secondary physician offices, hospitals, and more) easy, and helps providers better meet quality benchmarks, improve outcomes and realize shared cost savings.
Of GDP will be taken up by healthcare costs by 2021
Patients are added to Medicare daily
ACOs nationwide and growing rapidly
Projected growth in ACO lives by 2020
ACO 101: A Brief Overview and History
ACO DefinedAccording to the Centers for Medicare and Medicaid Services (CMS), an ACO is “an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.”
Pioneer ModelThe Centers for Medicare and Medicaid Services (CMS) launched an initiative to test the ACO theory and program design before making final rules for the Medicare Shared Savings Program. These beta test ACOs were called “Pioneer” ACOs. The Pioneer ACO Model is separate and distinct from the Medicare Shared Savings Program (MSSP) and is no longer being licensed.
Medicare MSSP ModelCMS officially licensed Medicare Shared Savings Program (MSSP) ACOs on January 1, 2012, and continues to license ACOs on an annual basis. The Shared Savings Program rewards ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first.
Next Generation ModelBuilt upon the experience from MSSP, the Next Generation ACO Model allows provider groups to assume higher levels of financial risk than the Pioneer or MSSP ACO models. The goal of this model is to test whether strong financial incentives for ACOs couples with tools to support better patient engagement and care management, can further improve health comes and lower expenditures.
Commercial ModelCommercial ACOs are similar to Medicare ACOs, but there is no licensing process. Currently, there are 169 commercial ACOs who have negotiated with insurance carriers for shared savings contracts.
Advanced Payment ModelThis is an initiative available only to ACOs participating in the Medicare Shared Savings Program (MSSP) and offers additional start-up resources to physician- owned and rural providers ACOs to build the necessary infrastructure.
Frequently Asked Questions
What is shared savings?
The Medicare Shared Savings Program (MSSP) is the funding mechanism for ACOs participating in the Medicare ACO model. The MSSP rewards ACOs that lower the rate of growth in health care costs for Medicare beneficiaries while meeting specific performance standards on quality of care and patient experience over the three-year contract.
Medicare ACOs are required to coordinate care, define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and encourage investment in infrastructure and redesigned care processes. In return for meeting quality and cost targets, the ACO is eligible to receive shared savings which are annual bonuses on top of traditional fee-for-service payments.
What's the difference between a Medicare and a Commercial ACO?
What are the requirements and costs to become an ACO?
The Department of Health and Human Services (DHHS) final regulation adjustments on October 20, 2011 outlined the ACO requirements. Some of the key requirements state that an ACO must:
- Accountable for the quality, cost and overall care of its Medicare fee-for-service beneficiaries
- Sign 3-year contract
- Have a formal legal structure to allow for shared savings distributions
- Have a minimum of 5,000 Medicare beneficiary lives assigned to its primary care doctors
- Have a leadership and management structure, including clinical and administrative systems
- Have defined processes to: promote evidence-based medicine and patient engagement; report on quality and cost measures; and coordinate care, such as through the use of telehealth, remote patient monitoring, and other technologies
- Demonstrate they meet patient-centeredness criteria, such as the use of patient and caregiver assessments or the use of individualized care plans