Toward Accountable Care Where Policy Meets Practice: Lessons from the CMS Physician Group Practice Demo Nicholas Wolter, M.D. Alliance for Health Reform Hill Briefing Washington, D.C May 10, 2010

ACO: Accountable Care Organization Current use evolved from discussion between MedPAC Commissioners & Elliott Fisher on November 9, 2006 in effort to define ways to control healthcare costs in an environment of regional variation in utilization and a largely unorganized & fragmented delivery system Further defined the following month in an article in Health Affairs [Health Affairs 26, no. 1 (2007): w44–w57 (published online 5 December 2006; /hlthaff.26.1.w44)] Onslaught of ACO conferences, white papers, consultant Power Points, RWJF Pilot in New Jersey, etc. Effect of Physician Group Practice demonstration on discussions with CMS, MedPAC, Congress Culmination in Health Reform bill (both HR and Senate versions)

Program Environment: Billings Clinic Group Practice 240 Physicians, 65 midlevels, all employed 29 (~50 sub-) specialties (Allergy to Vascular Surgery) 8 clinic locations 272 (220) bed tertiary hospital Manage/support 6 CAHs ~3500 Committed Employees 3 rd largest employer in Montana Integrated Delivery System/ Medical Foundation Board of Directors: community-based Leadership Council (Internal Board): physician majority + senior administrators

Everett, WA – Everett Clinic Marshfield, WI – Marshfield Clinic Springfield, MO – St Johns Danville, PA-Geisinger Billings, MT-Billings Clinic St. Louis Park, MN – Park Nicollet Winston-Salem, NC-Novant- Forsyth Physician Group Practices Integrated Delivery Systems Academic & Network Org. Middletown, CT – Integrated Resources for Middlesex Area (IRMA) Ann Arbor, MI - University of Michigan Bedford, NH-Dartmouth Hitchcock 10 Organizations

Service Region Locations Riverton Fremont Casper Powell Park Cody Hot Spring s Thermopolis Bighorn Lovell Greybull Washakie Worland Sheridan Johnson Buffalo Campbell Gillette Crook Lincoln Flathead Sanders Mineral Lake Glacier Missoula Ravalli Beaverhead Granite Deer Lodge Powell Toole Pondera Teton Lewis & Clark Cascade Jefferson Silver Bow Broadwate r Madison Gallatin Park Sweet Grass Stillwater Meagher Wheatland Judith Basin Chouteau Libert y Hill Blaine Fergus Golden Valley Carbon Big Horn Yellowstone Musselshell Petroleum Phillips Valley Garfield Rosebud Treasure Powder River Carter Custer Fallon Prairie Wibaux Dawson McCone Richland Roosevelt Sheridan Daniels Missoula Butte Dillon Havre Lewistown Livingston Columbu s Billings Red Lodge Hardin Roundup ForsythMiles City Baker Glendive Sidney Wolf Point Glasgow Weston Natrona Great Falls Kalispell I-15I-90 I-25 Williams Williston Divide McKenzie Dickinson Golden Valley Billings Dunn Stark Slope Bowman Adams Hettinger I-94 HWY 2 Scobey Big Timber Colstrip Bozeman Affiliate Management Services Columbus - Stillwater Hospital Colstrip - Colstrip Clinic Lovell - North Big Horn Hospital Red Lodge - Beartooth Hospital Big Timber - Pioneer Medical Center Livingston - Livingston Healthcare Scobey - Daniels Memorial Hospital Clinic Locations & Number of Providers Billings Clinic - Cody (7 MDs, 1 PA) Bozeman OB/Gyn (6 MDs, 2 NPs, 1 PA) Billings Clinic- Main (200 MD, 47 PA) Billings Clinic - West (8 MDs, 1 PA) Billings Clinic - Miles City (10 MDs, 3 PAs) Billings Clinic - Red Lodge (4 MDs) Billings Clinic - Columbus (2 MDs, 1 NP) Billings Clinic - Heights (4 MDs, 1 PA) Counties with Affiliate or Branch Clinic Other Service Area Counties

Montana: 147,138 square miles and 922,002 people

PGP Demo Concepts Medicare Fee For Service continues as before – Business risk for the PGP If PGP is able to reduce the rate of growth of Medicare spending for the cohort under its care compared to a local comparison, CMS will share part of its savings with PGP – Savings is a function of expenditure control and health status changes Budget neutral project for CMS Meeting Financial Target= Gate Once Open, PGPs portion dependent on meeting Quality Measures

PGP Project Financial Model SAVINGS >2% 20% CMS 80% Performance Pay 0.3 Q 0.7 E 0.4 Q 0.6 E 0.5 Q 0.5E Y1 Y2 Y3-5 Q: Quality E: Efficiency

CMS PGP Quality Measures Year 1: Diabetes Year 2: Year 1 plus HF and CAD Year 3: Year 2 plus Hypertension and colorectal and breast cancer screenings + flu and pneumonia vaccines Total 32 Outpatient Taken from the Doctors Office Quality measurement set in Thus some of the target measurements are not the current quantitative benchmark. PGP Quality Thresholds: Absolute or Relative Targets benchmarks or >10% improvement in gap (100%- baseline)

10 The demonstration uses a total of 32 measures that focus on common chronic illnesses and preventive services DiabetesCHFCADPreventive Care HbA1c ManagementLeft Ventricular Function Assessment Antiplatelet TherapyBlood Pressure Screening HbA1c ControlLV Ejection Fraction Testing Drug Therapy for Lowering LCL-C Blood Pressure Control BP ManagementWeight ManagementBeta-Blocker Therapy Prior MI Blood Pressure Control Plan of Care Lipid MeasurementBP ScreeningBlood PressureBreast Cancer Screen LDL Cholesterol LevelPatient EducationLipid ProfileColorectal Cancer Screen Urine Protein TestingBeta-Blocker TherapyLDL Cholesterol Level Eye ExamAce Inhibitor Therapy Foot ExamWarfarin Therapy Influenza Vaccination Pneumonia Vaccination

Common Basis for Strategies among the PGP Groups 1. Focus: High Cost Areas Components of Medicare Expenditures For Billings Clinic (base year) Inpatient40% Hospital OP24% Part B22% SNF 7% Home Health 3% DME 4% Reduce avoidable admissions, ER visits, etc 2. Focus: Chronic Care & Prevention High prevalence and high cost conditions Provider based chronic care management Care transitions Palliative care Financial Savings are INPATIENT driven. Quality Measures are OUTPATIENT driven.

12 Interactive Telephone System with Web-enabled Data Tracking Utilizes daily monitoring system for patients via Interactive Voice data collection Patients call daily between 4 AM and Noon Data appears immediately on a web server HF Care Coaches (RNs) call outliers – Manage per HF protocols (diuretic ) – Refer to HF Clinic MD/NPP or PCP Goal: coordinate care w/Tx Physician Validated, proven system that manages by exception Allows for 1 RN to follow patients

% reduction in hospitalizations or ~ 5/100/month enrolled in TA Total: # 780 Medicare: ~80%

Advisory Board

CMS-PGP Demonstration CMS PGP Objectives Encourage coordination of Part A & Part B Coordinate care for chronically ill and high cost beneficiaries in an efficient manner Decrease the growth in Medicare spending over the next 3 years Timeline Base Year: Calendar year 2004 Performance Year 1:April 1, March 31, 2006 Performance Year 2:April 1, March 31, 2007 Performance Year 3:April 1, March 31, 2008 Performance Year 4: April 1, 2008 – March 31, 2009 Performance Year 5: April 1, March 31, 2010

Accountable Care Organizations Key Features Local Accountability Shared Savings Performance Measurement Key Design Components Organization well defined Scope of providers – PCP essential – Continuum of care Spending and quality thresholds to ensure success Distribution methodology for shared savings Brookings-Dartmouth ACO Learning Network

Advisory Board

Accountable Care Organizations: A group of providers willing and capable of accepting accountability for the total cost and quality of care for a defined population. 7 Core Components 1. Providers 2. Payers 3. Management 4. Alignment Structure 5. Population IT/Data 6. Medical Home (PCMH) 7. Patients Providers PCPs Specialists Hospital LTC Home Care Pharmacy Ancillary/DME Alternative/Integrative Hospice

Scope of Accountability Single Service/Episode Disease Specific Service Oriented Segment by Illness Total Population Care Bundled Payment/ETG P4P for outcome measures (HF, diabetes, etc. Medical Home payments CMS Chronic Care demo Accountable Care Org

Copyright ©2009 by Project HOPE, all rights reserved. Stuart Guterman, Karen Davis, Stephen Schoenbaum, and Anthony Shih, Using Medicare Payment Policy To Transform The Health System: A Framework For Improving Performance, Health Affairs, Vol 28, Issue 2, w w

Patient Protection and Affordable Care Act ACO Definitions Secretary (of HHS) shall establish – significant degree of discretion in rule making Starts not later than January 2012 Shared Savings Program Accountable for a population (>5,000 beneficiaries) Coordination of Medicare A&B Investment in infrastructure High quality and efficient delivery groups of providers of services and suppliers meeting criteria = ACO – Group practice arrangements – Networks of practices – JV between hospitals/providers – Hospitals w/ employed providers – Others?

Patient Protection and Affordable Care Act ACO Requirements Accountable for quality cost and overall care for assigned beneficiaries Agree to 3 year period Form legal structure to receive and disperse payments PCP enough for population ( 5K) Specify the providers in ACO Leadership for clinical and administration services Processes to ensure it – promotes EBM – reports quality, cost, & utilization measures – coordinates care (emphasizes technologies, care transitions) – assesses patient and provider experience Engagement in PQRI, e-Rx, EHR (?meaningful use), possibly higher standards than general Medicare providers

Patient Protection and Affordable Care Act ACO Methodologies Assignment of FFS beneficiaries based on use of PC services – appropriate method; prospective vs. retrospective – Beneficiaries enrolled in A+ B, excludes Part C (Medicare Advantage) FFS payments continue + potential for shared savings payments Benchmark to determine shared savings – prior 3 year average per capita expenditure for assigned ACO population – updated by national growth trend (absolute amount, not rate) – risk adjustment methodology required but not defined by statute – updated each performance period Savings occurs if the average per capita expenditure is below a percentage of the benchmark that assures performance is not due to normal variation – ? 95% confidence interval, thus population dependent – Quality requirements must be met – Secretary to determine percentage & maximum amount of net savings shared Other features – Monitoring of risk avoidance by ACO – Termination possible if ACO not meeting quality standards

DESIGN ISSUES Attribution Beneficiary Participation Comparator Group Rapid Performance Feedback Risk Adjustment Infrastructure Investment Requirements Financial Design- 2% Threshold Shared Savings as a Longterm Design Feature

Other Thoughts Focus on high volume/high cost Continued need to refine FFS payment Eliminate incentives driving fragmented behavior Importance of some stick with the carrot Relationship between delivery system organization and payment policy can be nonlinear Importance of leadership/culture Importance of collaborative learning Rural healthcare providers can be players

Collegiality is the Key The key feature of the new integrated health care enterprise is not a balance of power, however, but the emergence of collegiality as the fundamental organizing principle. The essence of collegiality is tolerance and a sharing of common professional values. This trust and sharing of values is, in turn, the central precondition of the ability to share and successfully manage the economic risk of health costs. Jeff Goldsmith Driving the Nitroglycerin Truck Healthcare Forum Journal March/April 1993

Culture of Quality and Safety: Billings Clinic CMS PGP Demo Early adopter CMS Core Measures ICU Bundles(Pronovost) MRSA reduction using positive deviance technique Specialty Society Quality Data: STS, ACC, NSQP Chronic Disease Registeries PACE Magnet/Beacon Center Translational Research Quest/Premier ACO Demo

The past 50 years have been marked by advances in the science of medicine. The next 50 will be marked by improvements in the organization and teamwork of how healthcare is delivered. Charles Mayo, M.D. January, 1913

Thank You