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Accountable Care Backgrou
Specific Concerns
Winners and Losers


Background Information

Accountable Care Organization (ACO) represent an new method of reibursement for medical services, promulgated by the federal government, in Section 3022 of the Patient Protection and Affordable Care Act (ACA) , creating the Medicare Shared Savings program, stipulating ACOs are to contract with Medicare by January 2012.   A whole set of new regulations and modifications of old regulation allows doctors, or doctors and hospitals, to gather 5000+ medicare patients, and manage their care in ways that would improve quality and save money.  The improvement in quality will be measured by Medicare using 31 new metrics that provider, and facilities, will have to report, details of which are pending, and the cost savings will be monitored by Medicare's following billing submissions, using the new 5010 ICD-10 standard. 

(ed. note-- this could translate into a huge administrative burden on each practitioner, regardless if they have electronic medical records)

once physicians  organize an ACO (ed. note, and todate, mosly only hospitals have had the infra-structure and money to accomplish this) the new ACO has to apply to Medicare for Certification by 1/22/12. if certified, then all subaquent billing submitted to medicare will be tracked for those physicians and facilities, and compared to those of 2010.  if there is a > 2% drop in costs per year compared to 2010, then 1/2 of the savings will be shared with the ACO, which can then decide how to distribute these monies as a bonus to the member physicians and facilities.

Primary Care physicians are the backbone, and will be sought by an ACO to list the patients they provide primary care services to--Medicare will keep a check as to accuracy but allowing those who submit billing for primary care services to be counted as primary care---- (ed.---details are still pending on these codes).  Primary care physicians allowed by medicare are those who in their Medicare application listed their Taxonomy as Family Practitioners, internists, gynecologist, geriatricians, and possibly others--- details to be provided soon  ....and changes are likely---for instance, when patients are followed by specialists rendering primary care, or multiple doctors, Medicare will likely choose the one physician submitting the most primary care codes or the bulk of the care, as the primary, and if that practitioner is registered with an ACO, the patient and the doctor will be tracked as such.

According 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."[1]    ACO's can be viewed as new type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers (community doctors, hospitals, nursing home, other facilities and labs)  form an ACO, which then provides care to a group of patients, defined by whether their primary care doctors are in the ACO. The ACO may use a range of different payment models to distribute any savings that may accrue, with different percentages for primary care doctors, specialists, hospitals, and ancillary services and facilities.  The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided.

While the ACO model is designed to be flexible, Dr. Mark McClellan, Dr. Elliott Fisher and others, who were the originators of the idea,  defined three core principles for all ACOs: 1) Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients; 2) Payments linked to quality improvements that also reduce overall costs; and, 3) Reliable and progressively more sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through improvements in care.[2]

The ACO-model builds on the Medicare Physician Group Practice Demonstration and the Medicare Health Care Quality Demonstration, established by the 2003 Medicare Prescription Drug, Improvement, and Modernization Act. Kaiser Permanente and HealthCare Partners Medical Group are two notable examples of successful ACOs.

While ACOs have become increasingly more common in the last few years, a recent study by the Medical Group Management Association (MGMA) has shown that the implementation of ACOs is one of the toughest challenges facing the MGMA members today.[3]

ACOs features as promulgated in the Affordable Care Act

Section 3022 of the Patient Protection and Affordable Care Act (ACA) creates the Medicare Shared Savings program, allowing ACOs to contract with Medicare by January 2012.[1]HYPERLINK  \l "cite_note-3"[4] According to the ACA, the Medicare Shared Savings program, "promotes accountability for a patient population and coordinates items and services under part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery". Section 3022 outlines the following requirements for ACOs:

·        The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it

·        The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period

·        The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments for shared savings to participating providers of services and suppliers

·        The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO under subsection

·        At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the ACO program

·        The ACO shall provide the Secretary with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2)

·        The ACO shall have in place a leadership and management structure that includes clinical and administrative systems

·        The ACO shall define 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 such enabling technologies

·        The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans

·        The ACO participant cannot participate in other Medicare shared savings programs [5]

·        The ACO entity is responsible for distributing savings to participating entities

·        The ACO must have a process for evaluating the health needs of the population it serves

CMS' Notice of Proposed Rule was released March 31, 2011 for the Medicare Shared Savings program and the Comment period closed June 6, 2011. [6]

ACO Pilots and Learning Networks

A range of ACO pilots are currently underway across the country with commercial insurers and state Medicaid programs (New Jersey, Vermont, Colorado, etc.) in advance of the Medicare Shared Savings Program. The Brookings-Dartmouth ACO collaborative is leading five ACO pilots working with commercial insurers, as well as their second ACO Learning Network with over 80 members from across the country. Premier runs an ACO Implementation Collaborative and Readiness Collaborative. And the American Medical Group Association(AMGA) also runs an ACO Development Collaborative and Implementation Collaborative. Independent ACO-like initiatives are also taking place in Massachusetts, Illinois and California. Recently, the Brookings-Dartmouth ACO Learning Network published a publicly available comprehensive ACO implementation guide, the ACO Toolkit. Working with leading experts, several ACO pilots have also been looked at using the portal system HealthyCircles. It was originally built to manage care transitions around H1N1 for the American Medical Association but some found practical application in the ACO space.


·        ACO Requirements White Paper

·        ^ ab"Medicare "Accountable Care Organizations" Shared Savings Program - New Section 1899 of Title XVIII, Preliminary Questions & Answers". Centers for Medicare and Medicaid Services. Retrieved January 10, 2010. [dead link]

·        ^ McClellan M, McKethan AN, Lewis JL, Roski J, Fisher ES (2010). A National Strategy to Put Accountable Care Into Practice. 29. pp. 982=990. doi:10.1377/hlthaff.2010.0194. PMID20439895.

·        ^

·        ^ Fisher ES, Shortell SM (2010). "Accountable Care Organizations: Accountable for What, to Whom, and How". JAMA304 (15): 1715–1716. doi:10.1001/jama.2010.1513. PMID20959584.

·        ^

·        ^"Overview Shared Savings Program". CMS.

part of the above and many of the references retrieved 1/5/12  from ""