ACOs: Much Ado about Nothing (?). Moderator: Douglass G. Hewitt, Esq., Partner, Kubasiak, Fylstra, Thorpe & Rotunno, P.C. Panelists: Bradford A. Buxton, President, BTB Associates, LLC Ciara Ryan Frost, Esq., Partner, Kerns, Frost & Pearlman, LLC
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Much Ado about Nothing (?)
Douglass G. Hewitt, Esq., Partner, Kubasiak, Fylstra, Thorpe & Rotunno, P.C.
Bradford A. Buxton, President, BTB Associates, LLC
Ciara Ryan Frost, Esq., Partner, Kerns, Frost & Pearlman, LLC
Kristin D. McMahon, Esq., Chief Claims Officer, IronHealth
The Patient Protection and Affordable Care Act (“PPACA”)Public Law 111 -148, signed March 23, 2010
“In the US, we hold no one accountable for our problems. Accountability is as fragmented as care, itself; each separate piece tries to craft excellence, but only within its own walls. Meanwhile, patients and carers wander among the fragments. No one manages their journey, and they are too often lost, forgotten, bewildered.”
- Dr. Donald Berwick, former CMS Administrator
Source: Donald M. Berwick, “A Transatlantic Review of the NHS at 60,” http://www.pnhp.org/news/2010/may/a-transatlantic-review-of-the-nhs-at-6-, July 1, 2008.
Source: Organization for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.
“The creation of ACOs is one of the first delivery-reform initiatives that will be implemented under the ACA. Its purpose is to foster change in patient care so as to accelerate progress towards a three part aim: better care for individuals, better health for populations, and slower growth in costs through improvement in care.”
-Dr. Donald Berwick
CMS Innovation Center initiative
Eligibility-healthcare organizations experienced in providing coordinated, patient centered care to Medicare beneficiaries (a minimum of 15,000 Medicare Part A and B beneficiaries) in an ACO type environment
Approximately 32 organizations have been designated as Pioneer ACO Models including: Banner Health, Beth Israel Deaconess, Dartmouth Hitchcock, and Presbyterian Healthcare Services.
♦First two years of Pioneer are shared savings payment with higher levels of savings and risk than Shared Savings Program;
♦ By end of second year, Pioneer ACO must enter into similar payment contracts with insurers and health plans constituting 50% of ACO revenue.
Sample ACO Organizational Components:
Hospitals, Diagnostic/ Therapeutic Service Centers
Alternate Health Service Organizations
Health Information Communication Connectivity Network
EHRs, Interfaces, Communication Hubs
Patient Centric CDRs (Beneficiary)
Aligned Physicians – Ind
Population Health Data Warehouse
Physicians - Ind
At its roots, the ACO model is about changing the reimbursement structure of the U.S. healthcare system toward one that pays for the quality of care delivered (and, by derivative, the outcomes achieved) versus the units of service provided.
- Beyond ACOs: The Pending Risk Shift to Providers, William Blair
Hospitals with strong market power and higher private-payor and other revenues have less pressure to constrain their costs. Thus, these hospitals have higher costs per unit of service, which can lead to losses on Medicare patients. Hospitals under more financial pressure—with less market share and less ability to charge higher private rates—often constrain costs and can generate profits on Medicare patients.
- MedPac, Health Affairs, May 2010
Blue Shield of California gives $20M in ACO Help
- Healthcare IT News, October 18, 2011
Health care organizations can expect to see impacts to their customers, products, markets, and margins .
Revenue Cycle Management
Source: Healthways 2010
Lower Total Health Care Cost
The landscape is complex and choosing partners requires understanding oneself and the target partner. Three types of partners meet different sets of needs.
Providers and payors require a structure in the new, transformed state
Providers must consider the balance between geography and provider services offered
♦ Activities/services of the ACO and its constituentparticipants
♦ ACO’s organization/legal structure, and
♦ Applicable state law
(Note, Final ACO Antitrust Policy Statement provides for an Antitrust Safety Zone)
ERISA Preemption Defense
Increase in Population
Insured Under Individual
For every action, there is an equal and opposition reaction.
Liability for medical and managed care mishaps
Douglass G. HewittCiara Ryan Frost, Esq.
Kubasiak, Fylstra, Thorpe & Rotund, P.C.Kerns, Frost & Pearlman, LLC
20 S. Clark Street, 29th Floor70 West Madison, Suite 5350
Chicago, IL 60603Chicago, IL 60602
(312) 630-9600(312) 261-4553
Bradford BuxtonKristin D. McMahon, Esq.
BTB Associates, LLCChief Claims Officer
594 North Woodland LaneIronHealth
Northfield, IL 60093175 Powder Forest Drive
(847) 400-7450Simsbury, CT 06089