Testing the Future of Accountable Care David W. Saÿen, Regional Administrator CMS San Francisco September 23, 2011 CASA Annual Conference

Healthcare Innovation: One Patient’s Story “The idea of the program is to keep me healthy, keep me out of the hospital and keep costs down. I don’t think I would still be here without this program. It has been my lifeline.” – Marie Jones Dedicated nurse case manager for high risk patients. New York Times, June 21 st 2010 An Insurer Pays more to Save

CMS Mission CMS is a constructive force and a trustworthy partner for the continual improvement of health and health care for all Americans. 3

Measures of Success Better healthcare - Improve individual patient experiences of care along the IOM 6 domains of quality: Safety, Effectiveness, Patient-Centeredness, Timeliness, Efficiency, and Equity Better health - Focus on the overall health outcomes of populations by addressing underlying causes of poor health, such as: physical inactivity, behavioral risk factors, lack of preventive care, and poor nutrition Reduced costs - Lower the total cost of care resulting in reduced monthly expenditures for Medicare, Medicaid or CHIP beneficiaries by improving care

The Current System Greatest Acute Care in the World: People come from around the world to be treated But: 46 million Americans lack coverage Uncoordinated – Fragmented delivery systems with variable quality Unsupportive – of patients and physicians Unsustainable – Costs rising at twice the inflation rate

A Future System Affordable Accessible – to care and to information Seamless and Coordinated High Quality – timely, equitable, safe Person and Family-Centered Supportive of Clinicians in serving their patients’ needs

Transforming Health Care We can invent our way to success We can improve our way to a sustainable, proud, and excellent American health care system We can make health care more affordable for our country by making it better for the people who depend on it Better care will be, overall, less costly care

The Foundation for Healthcare Transformation: Meaningful Use Medicare/Medicaid incentives: estimated $20 billion starting 2011 Reward the “meaningful use” of EHRs (not the purchase of EHRs alone) Physicians: $44,000/$63,750, with penalties starting in 2015 Hospitals: $2M plus bonuses for higher Medicare, Medicaid volume Escalating requirements – 2011, 2013, 2015

New Tools in the CMS Toolbox Medical Homes Hospital-Acquired Conditions (HAC) Payment Rules Value-Based Purchasing Reducing Fraud, Waste & Abuse Medicare and Medicaid Coordination Office CMS Innovation Center Medicare ACO Shared Saving Program

The Innovation Center “The purpose of the Center is to test innovative payment and service delivery models to reduce program expenditures under Medicare, Medicaid and CHIP…while preserving or enhancing the quality of care furnished…” –“Preference to models that improve coordination, quality and efficiency of health care services.” Resources - $10 billion in funding for FY2011 through 2019 Opportunity to “scale up”: HHS Secretary authority to expand successful models to the national level

The Innovation Center Mission Statement Be a constructive and trustworthy partner in identifying, testing and spreading new models of care and payment that continuously improve health and healthcare for all Americans.

Initial Programs Multi-Payer Advanced Primary Care Practice Demonstration Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration Medicaid Health Home State Plan Option State Demonstrations to Integrate Care for Dual Eligible Individuals Partnership for Patients ACO Initiatives: Pioneer, Advance Payment, Learning Sessions

Accountable Care Organizations

ACOs are one big step toward a new and better healthcare system –one of the most innovative tools provided by the Affordable Care Act ACOs are not the status quo repackaged.

Grounded in the Three Part Aim: Better Care, Better Health, Lower Costs Grounded in primary care. Focus on coordinated, seamless care. Able to manage information, with full attention to privacy. Accountable for what it does and what it achieves, ensuring patients and families thrive, and that the care they need is the care they get. Rewarded financially for success in lowering costs of care, not by withholding care, but by improving care.

Focusing on Seamless, Coordinated Care We have examples of health care organizations showing that it works. –Denver Health – saving a hundred million dollars with better care, and having the lowest case-mix-adjust mortality among 112 academic medical centers. –Virginia Mason – pioneering with lean production principles.

Balancing Competing Goals Defining parameters for ACOs requires balancing competing, important goals: –The need to return dollars to the Medicare Trust Fund vs. offering care providers an attractive on-ramp to coordinated care. –Cooperation among providers vs. the requirement to prevent anticompetitive behaviors. –Assuring high quality care vs. minimizing burden of quality reporting. –Data sharing with ACOs vs. beneficiaries’ privacy needs. –Speed, which our nation needs, vs. the time for learning, which many providers need. –Risks and rewards for both providers and for Medicare.

Different organizations are at different stages in their ability to move toward an ACO model. We want to try to meet you where you are. Our hope is to offer models of participation to encourage organizations across the spectrum of readiness to join in and begin this work. We are looking for those organizations that are authentic in their commitment to joining us on this path. Understanding different stages of readiness

ACO Initiatives at CMS: –Shared Savings Program –Pioneer ACO Model –Advance Payment Initiative –ACO Accelerated Development Learning Sessions CMS ACO Initiatives

The Shared Savings Program We received thoughtful and constructive comments ~ over 1200 in all. Appreciative of the healthy debate in the industry. CMS reviewed all official comments received to construct the final rule. Publication of the final ACO Shared Savings rule later this year.

The Pioneer ACO Model Designed for organizations that –Are well on their way to changing care delivery and business model –Interested in being the leading edge –Able to show the country what is possible

The Pioneer ACO Model Key Features of the Pioneer ACO Model Financial Gain – higher risk but larger reward for participating organizations Payment Structure – population-based payment starting in the third year, which gives providers flexibility Flexibility in payment arrangements – While the Pioneer ACO Model includes one payment arrangement, applicants are invited to propose alternative payment arrangements that meet the parameters detailed in the RFA. Payment Arrangements with Other Payers – Over 50% of total revenues must be derived from outcomes-based contracts Beneficiary Alignment – option of prospective alignment for their beneficiary populations. Length of Agreement - agreement period lasts up to five years

The Pioneer ACO Model The Innovation Center released a Request for Applications (RFA) for the Pioneer ACO Model on May 17, Two part application process: –Interested organizations submitted a Letter of Intent. –Applications were due August 19, Appreciate the great enthusiasm for this ACO model from the industry.

Advance Payment Initiative The Innovation Center sought public comments on whether it should offer an Advance Payment Initiative. The Advance Payment Initiative would give certain ACOs participating in the Medicare Shared Savings Program access to part of their shared savings up front. ACOs would need to provide a plan for using these funds to build care coordination capabilities, and meet other organizational criteria. Advance payments would be recouped through the ACOs’ earned shared savings. Comments were due June 17, and the Innovation Center staff is currently reviewing those comments and exploring various alternatives.

Accelerated Development Learning Sessions The Innovation Center is offering ACO Accelerated Development Learning Sessions for the leadership teams of existing or newly emerging ACOs. The goal of these sessions is to prepare participants to: –Understand their current readiness to become an ACO. –Identify organization-specific goals for achieving the three-part aim of improving care delivery, improving health, and reduced costs through improvement. –Begin to develop an action plan for establishing essential ACO functions.

Accelerated Development Learning Sessions Registration is free for leadership teams from existing or newly forming ACOs Four sessions in 2011 June in Minneapolis September in San Francisco Bay Area, California October – Philadelphia, PA area November – Atlanta, GA area All materials from the sessions will be publicly available More information and registration available at

Partnership Join us on this journey to provide coordinated, seamless, reliable, and patient-centered care that is rooted in health, grounded in primary care, and economically sustainable. CMS wants to support your transformation and work with you to improve care and reduce costs.

Questions? Suggestions? How can we work together? Thank You

David W. Saÿen Regional Administrator, San Francisco Centers for Medicare & Medicaid Servicers U.S. Department of Health & Human Services 90 Seventh Street, Suite San Francisco, CA (415) Website: Twitter: CMSGov Contact Information