Accountable Care Organizations (ACOs) Migena Peno Pharm.D. Candidate LECOM School of Pharmacy Part 3 of 3

Measures for at risk population Centers for Medicare & Medicaid Services. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. 42 CFR Part 425. Final Rule. DIABETES CARE : 1.HbA1c control <8% 2.LDL-C <100 mg/dL 3.BP<140/90 mm Hg 4.Tobacco non-use 5.Aspirin prophylaxis use 6.Poor HbA1c control >9% ISCHEMIC HEART DISEASE 1.Complete lipid profile 2.LDL-C control <100 mg/dL CORONARY HEART DISEASE 1.Treatment for high LDL-C 2.ACEI or ARB if CAD + DM +/- left ventricular systolic dysfunction

Measures for care coordination & patient safety  Important for prevention of hospital readmissions  Includes :  Risk-adjusted, all-condition readmission measure  Measures for admissions from ambulatory sensitive conditions : COPD & CHF  Medication reconciliation after discharge from inpatient facility Centers for Medicare & Medicaid Services. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. Final Rule. Fed Regist. 2011;76(2): (codified at 42 CFR Part 425).

Role of different health care providers in cost reduction & quality improvement  Primary Care practices  Improved access to care  Prevention  Early diagnosis  Reduction in unnecessary testing, referrals, & treatment  Selection of lower-cost treatment options  Reduction in ER visits & hospitalizations  All providers  Improved management of complex patients with multiple disease states Capgemini Consulting. US Health Care Reform: The Emergence of Value Based Purchasing and Accountable Care Organizations

 All providers  Lower-cost more accessible settings & care delivery methods  Use of lower-cost, high-quality providers  Coordinated health & social services support  Hospitals & Specialists  Improved efficiency of patient care  Reduction in readmissions  Reduction in adverse & sentinel events  Selection of lower-cost treatment options Role of different health care providers in cost reduction & quality improvement Capgemini Consulting. US Health Care Reform: The Emergence of Value Based Purchasing and Accountable Care Organizations

Methods ACOs generate shared savings  Reduction of unnecessary OR duplicative services  Development of care protocols  Improve coordination of care  Improve management of disease states  Increase preventive services  Encourage early diagnosis  Improve information flow  Promote lower-cost treatment options  Scale purchasing of goods & services  Reduction in preventable ER visits & re- hospitalizations  Hiring specialists to optimize efficiency  Efficient use of resources Some ACO activities may have antitrust or other legal and regulatory constraints, which are beyond the scope of this report.

Value-Based Purchasing (VBP)  Links payment to quality of care  Rewards providers that show improved performance  Performance: based on a set of quality measures that are related to improved clinical processes of care & patient satisfaction  Reduces inappropriate care  Encourages improvements in quality of care resulting in additional savings over time  Main focus: Best clinical practices & patient’s experience of care  Hospitals scored based on performance relative to other hospitals & improvement in performance over time Administration Implements New Health Reform Provision to Improve Care Quality, Lower Costs. Healthcare.gov

Value-Based Purchasing (VBP)  In 2013, 1% reduction in hospital payment for care provided to Medicare patients to create funding for VBP  Reduction in payment will be increased by 0.25% annually until reaching maximum 2% in 2017  Starting 2013, hospital payment reduced if excess 30- day readmissions for patients with heart attacks, HF, & PNA  In 2013, ~ $850 millions from the money saved to Medicare will be distributed among 3,500 hospitals based on their overall performance Administration Implements New Health Reform Provision to Improve Care Quality, Lower Costs. Healthcare.gov Centers for Medicare & Medicaid Services. Medicare Program; Hospital Inpatient Value-Based Purchasing Program. Final Rule. Fed Register. 76;

Value-Based Purchasing (VBP)  Performance based on:  12 clinical process of care measures (70% of hospital’s total performance score)  Includes: HF discharge instructions, acute MI & PNA care, healthcare-associated infections, & surgical care improvement  8 patient experience measures (30% of hospital’s total performance score) derived from HCAHPS  Includes: Measures related to discharge information & communication about medications Centers for Medicare & Medicaid Services. Medicare Program; Hospital Inpatient Value-Based Purchasing Program. Final Rule. Fed Register. 76;

Value-Based Purchasing (VBP)  Starting 2014, in addition to clinical process & patient experience, performance score will also include outcomes & efficiency  Outcome measures implemented in 2014  Includes: Mortality rates for heart attacks, HF & PNA, hospital-acquired conditions, & patient safety indicators  Efficiency measures implemented in 2014  Includes: Cost per beneficiary Studer Group. Value-based purchasing at a glance. Centers for Medicare & Medicaid Services. Medicare Program; Hospital Inpatient Value-Based Purchasing Program. Final Rule. Fed Register. 76;

Benefits of ACOs  Less medical errors & duplication of services  Reduced hospital admissions  Shared information among providers participating in ACOs reduces burden of transferring information, reduces errors, & improves quality of care  Improved communication & coordination of care among different health care providers  Keeping patients healthy by encouraging preventive care Administration Implements New Health Reform Provision to Improve Care Quality, Lower Costs. Healthcare.gov Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010

Benefits of ACOs  Health care providers are accountable for entire continuum of care, from primary to post-acute  Performance measures ensure improvement in quality of care  Coordinated care among providers involves integration of providers across different care settings  Primary care is emphasized  Improved outcome, quality of care, & patient experience Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010

Benefits of ACOs  Estimated to save Medicare up to $960 millions in the 1 st 3 years  Savings are not at the cost of quality  Shifts some of the responsibility for costs from health insurers to health care providers  Does not require Medicare beneficiaries actually join a health plan Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010 Harold D. Miller, How to Create Accountable Care Organizations, Center for Healthcare Quality and Payment Reform, Pittsburgh, PA, September 7, The House Tri-Committee’s proposal, the America’s Affordable Health Choices Act of 2009, required that beneficiaries be informed of their assignment to an ACO, whereas the Senate Finance Committee’s America’s Healthy Future Act of 2009 did not stipulate that beneficiaries be informed. See Kelly Devers and Robert Berenson, Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandaries? Robert Wood Johnson Foundation and Urban Institute, Washington, DC, October 2009, p. 6

Limitations of ACOs  Must have the necessary capital to initiate the program at the individual facility, making it harder for individual providers to join  Gives provider groups power to negotiate rates of reimbursement which can increase payment for private insurance even if less efficient care is provided  Medicare Shared Savings Program only includes items & services under Medicare Part A & B while Medicare Part D is excluded Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010 Robert A. Berenson, Paul B. Ginsburg, and Nicole Kemper, “Unchecked Provider Clout in California Foreshadows Challenges to Health Reform,” Health Affairs, vol. 29, no. 4 (April 2010), p Francis J. Crosson, “Medicare: The Place to Start Delivery System Reform,” Health Affairs, Web Exclusive January 27,. 2009, pp. W232-W234.

Limitations of ACOs  Limited data on whether ACOs actually work  Performance measures increase burden of work (reporting, auditing, chart reviews, etc) & cost, & are not always accurate or reliable  Potential for increase in prices by providers not participating in ACO Fisher E, Shortell S. Accountable Care Organizations: Accountable for What, to Whom, and How. JAMA Oct 20, 2010 Vol 304, No. 15 Newman, D. Accountable Care Organizations and the Medicare Shared Savings Program. Congressional Research Service. Nov 4, 2010

Summary