Will Accountable Care Be a Game Changer?

March 17, 2015
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accountable care organizationFirst, I’m referring to Accountable Care and not the Affordable Care Act (ACA aka Obamacare). The ACA expansion of healthcare insurance coverage is a game changer to many individuals, yet it is unlikely to fundamentally change the healthcare system. Accountable Care is a series of pilot reimbursement programs managed by the CMS Innovation Center.

accountable care organizationFirst, I’m referring to Accountable Care and not the Affordable Care Act (ACA aka Obamacare). The ACA expansion of healthcare insurance coverage is a game changer to many individuals, yet it is unlikely to fundamentally change the healthcare system. Accountable Care is a series of pilot reimbursement programs managed by the CMS Innovation Center. While the CMS Innovation Center’s was funded by ACA, its purpose is to support the development and testing of innovative healthcare payments and service delivery models. The goal is to improve patient care, health and lower cost from improving the healthcare system.

Accountable Care is the third transformational wave of trying to improve health care outcomes and costs since the establishment of Medicare and Medicaid in 1966. Accountable Care dominates the healthcare industry discussion while ACA dominates the mainstream discussion.  The healthcare system is quietly transforming while the debate continues on the number of people signing up on healthcare exchanges, a Congress repeal of Obamacare and the U.S. Supreme Court hearing challenge to invalidate Obamacare provisions.

The primary Accountable Care pilot programs are Medicare’s version of Accountable Care Organizations (ACO) and Bundled Payments.  There are already over 600 ACOs operating, including commercial health plan ACOs. 6,500 providers that considered bundled payment pilots which began January 1, 2015.

ACA impacts people who need insurance coverage, Accountable Care may impact everyone. It may have a major impact on your doctor, your hospital and other providers that deliver care. Accountable Care is different than managed care or traditional fee-for-service insurance for providers (Physicians, Hospitals, Other). For patients, very little changes. For providers, it will require changing care delivery to be successful.

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What’s new for providers?

Accountable Care is overlaid upon the traditional fee-for-service Medicare coverage that enables patients the freedom to go to any provider. Primary care physician in an ACO are at risk for the overall cost of the patient over 12 months. Bundled Payment participants are at risk for the overall cost of the patient for 90 days during and after a hospital stay.

  1. New Quality Measures – New quality measures tied to financial incentive must be tracked and measured for both ACOs and Bundled Payments.
  2. Auto-assigned patients – Patients are assigned to an ACO based on an algorithm that determines where they receive primary care and if their physician participates in the ACO. Patients are assigned to a Bundled Payment if the participating provider (i.e., Hospital) is enrolled in the program and the reason for their hospital stay was pre-selected for participation.
  3. Shared Risk – ACO share 50% of the saving and may have downside penalties if the overall cost for 12 months is higher. Bundled Payment participants receive the total saving or are responsible for the additional cost once CMS receives 2-3% of the total cost.
  4. Care Management – While health plans provide care management to high cost chronic patient members, this is new for providers. Providers haven’t been reimbursed for care management in the past. They are now incented to provide this without reimbursement to drive overall savings for the ACO or Bundled Payment.

Why providers must develop new approaches

Most of traditional managed care approaches that health plans use to drive outcomes and managed cost will not work in Accountable Care. A health plan has the power of the purse to restrict patient services, patients are free to go to any provider in Accountable Care.

  1. In-Network – Accountable Care providers cannot restrict patients to a network.
  2. Contracted Fees – Accountable Care providers can negotiate rates with other providers, yet cannot require patients to use those providers.
  3. Secure Authorizations – Accountable Care providers cannot require patients to get authorizations for services.
  4. Annual Enrollment – Accountable Care providers don’t know in January who their patients will be over 12 months because of health plan enrollment. Patients are auto assigned with some ACO experiencing a 30% turnover churn year-to-year.
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Potential impact from the new provider approaches – Here could be the major game changers

  1. Care driven by patient experience – Patients will be managed because they choose to be managed. They have to want to stay within the ACO or Bundled Payment participant’s network because it is seamless, it makes their life easier, they develop trust and feel good about the experience.
  2. Care driven by patient outcomes rather than patient services – Providers will treat patients to drive overall patient outcomes rather than maximizing the number of services they can provide each day. Providers can no longer provide amazing service for office visits or a hospital stays to a patient while they end up visiting the Emergency Room 24 times over the year.
  3. Care driven by patient rather than a condition – Patients can’t be separated from their chronic conditions. Providers will need to get to know patients, their needs, their barriers (money for meds, or ride to the doctors) and cost effectively address the ones that could impact the overall outcomes.
  4. Care driven by efficiency – Providers only get paid when the patient comes to their office or hospital. Even though physicians do not get reimbursed for an email, phone call or video call, it may become more cost effective for some patients that don’t have transportation or to avoid expensive ER visits.
  5. Care driven by teams rather than fragmentation – ACOs are responsible for the overall medical care and behavioral health. Providers will need to develop multidisciplinary teams around patients and improve on the only 14% of ACOs that have integrated medical care and behavioral health.

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