This presentation briefly reviews the definition of ACOs, and details the recent (3/31/11) CMS rulings that further defined them.

1. Accountable Care Organizations A Look at ACO Design and Implementation Keith Marple Keithmarple.com

2. Accountable Care Organizations Theory of ACOs ACO Examples CMS Shared Savings Program Legislation My Take

3. Theory of ACOs Defined by Elliott Fisher, MD/MPH in 2009 Seeks to address the following problems: Current Incentives and System Fragmentation prevent providers from managing the health of their patient population Provider incomes are tied to service volume and intensity Patients believe that more care is better care

4. Theory of ACOs Fisher’s Solution ACOs care for patient populations using integrated care teams, evidence-based medicine, and a focus on primary care. Legal Provider Entity Attributable and Significant Patient Base Invisibly assigned by empirical methods Risk-Adjusted Cost Benchmarks Quality Measurement and Reporting Shared Savings

5. Some ACO Examples Some examples I’ll cover… CMS Physician Group Practice Demonstration Project Geisinger Health System, Danville, PA Montefiore Medical System, Bronx, NY And some in Massachusetts you probably already know about… Commonwealth Care Alliance BCBS Alternative Quality Contract Participants Caritas Christi Health Care

6. CMS Physician Group Practice Demo 2005 Demonstration Program to test ACO concept 10 large physician groups chosen Focused on management of diabetes patient population Fee-for-service payment plus payment incentives for cost and quality results Results in Year 1 All 10 groups improved quality of diabetes management 8 of 10 experienced lower cost increases than national average

7. Geisinger Health System Integrated Delivery Network Located in rural Pennsylvania Includes Health Plan with 250,000 covered lives, which allows Geisinger to be financially incentivized for low-cost, high-quality care Introduced ProvenCare model: Standard, evidence-based care processes Surgical checklists Money-back “Warranty” on complications Introduced with CABG surgeries, rolled out to other acute services

8. Geisinger Health System Introduced ProvenCare Navigator for Case Management

9. Montefiore Medical Center Includes 1,500 bed medical center and health plan with 150,000 covered lives Located in poor urban neighborhood in the Bronx (27% below poverty line) Provides in-home and remote case management and chronic disease management, even with low commercial payments

10. ACOs in Practice: The CMS Shared Savings Program Section 3022 of the Patient Protection and Affordable Care Act: CMS must establish a “Shared Savings Program” by 1/1/2012 Final CMS rule scheduled to be published this December 2010 (Update: actually published 3/31/11) Participants must have: Formal legal structure PCPs with 5000+ Medicare patients 3 year commitment to program Information systems to manage care and reporting Processes to provide evidence-based care and coordinate care across the ACO

11. ACOs in Practice: The CMS Shared Savings Program ACO must take responsibility for >5000 Medicare beneficiaries Beneficiaries must be notified at time of care Patient cannot be limited to ACO provider network Shared savings available in two tiers: Low risk (shared savings in years 1-3, shared losses in 3) Up to 50% of saved dollars above 2% threshold More risk (shared savings and losses in years 1-3) Up to 60% of all saved dollars, up to 10% of shared losses Savings only available when reported quality benchmarks are met, and savings amounts based on total quality score of ACO Anti-trust and kickback laws exempt for shared savings $$ HHS estimates $960 million in savings

12. My Take on Shared Savings Program “Voluntary and Incremental” A good first step. The lack of a closed network is limiting but… Effects on cost and quality will be muted but still evident Commercial payers will follow suit, multiplying incentives Existing providers will be moderately successful By improving quality and reducing unnecessary and duplicative services But at the cost of excessive restructuring costs and losses Tightly integrated PCP networks best positioned (Harvard Vanguard)

13. What’s Next New capital will be infused in the market for: Reclamation projects of struggling systems including PCP networks(ex. Caritas Christi) With nothing to lose, the change process in these systems will be greatly aided Brand new systems designed for prevention and low-cost, high-touch mid-level care teams Follow-on legislation will include Full capitation Limited networks Rate setting?