How Will the New ACO Rules Affect Doctors' Daily Practice?
Leslie Kane: Hi. I'm Leslie Kane, Editorial Director for Medscape's Business of Medicine. I'm here in Washington with Dr. Donald Berwick, Administrator for the Centers for Medicare and Medicaid Services (CMS), and Dr. Richard Gilfillan, Acting Director for the Center for Medicare and Medicaid Innovation.
There's been some big, exciting news today and that is the final rule for Accountable Care Organizations (ACOs) has been issued. You'll remember that back in the spring of 2011, the proposed rule came out. Since then there has been a lot of feedback and talking to physicians and interested stakeholders to get a sense of what types of changes, modifications or improvements could be made to get more people interested in becoming involved with ACOs.
That work has been done and there are some significant changes. First, two of the big things that have come out of this are the Medicare Shared Savings Program and the Advanced Payment Model. Dr. Berwick, could you give a quick overview of the goals of the Shared Savings Program?
Donald M. Berwick, MD, MPP: The Medicare Shared Savings Program is part of the Affordable Care Act, the law that's helping us transform and make healthcare better in America. It's a pretty bold idea. It was the idea that in fee-for-service Medicare, which allows patients to go anywhere they want, physicians or primary caregivers can decide to join an ACO. If they do, then they get support to coordinate care for the patient and to work with other physicians as a team to make things seamless. No matter where the patient goes physicians share information and really act like a team, and by coordinating care better, they reduce the cost of care for patients. Doctors actually share in the savings with the Medicare program. Everybody wins. The Medicare program saves money. The physician or ACO gets rewarded, and quality goes up because you now have more seamless and coordinated care for patients. The patients and families win also.
Ms. Kane: Let's look at a couple of the exact details because there are some big changes. One thing is that there are many elements for sharing in the savings and the number of quality measures has been reduced from 65 to 33. You've also recreated a longer phase-in time to measure the quality. How significant is that to physicians?
Dr. Berwick: We listened really carefully. There were more than 1200 comments that came in and we got tremendous feedback from all of the stakeholders because we wanted to make sure that we were listening to everybody. One of the issues was burden, making sure that when the program runs, physicians and other caregivers and hospitals that participate can really get the work done and we're not overburdening them.
On the other hand, we have a very serious and important job in protecting Medicare beneficiaries. Because when you share the savings, you might worry, "Are they going to hold back on my care a little bit, skimp in order to get savings?" Well, they can't do that. We're watching quality really, really closely. In the proposed rule in March of 2011, we put out the 65 metrics and asked, 'What do you think of these measures?'
We got tremendous feedback on them. Our staffs continued to work and we settled in on a subset of 33 measures that are a really robust set of ways to watch quality, and they're phasing in. So in the first year, the payment reward comes if you report the result.
After the second year, all but 8 of those metrics are required, and performance affects your shared savings.
Ms. Kane: Previously the performance came in a little earlier. Is that it?
Dr. Berwick: Yes, it came in at the start. Now, we're phasing them in. The first year, you do the reporting so we know it's transparent. The second year is to meet most of the metrics, which is now tied to your possibility of shared savings. The third year, all the metrics except one are tied to shared savings.
Ms. Kane: Here's another big one. Previously, 50% of primary care physicians had to be meaningful users for electronic health records (EHRs), and now there's no requirement. What led to such a large change? Is there a practical minimum that you would expect in order for this to be feasible?
Dr. Berwick: I expect all of the ACOs that thrive are going to move to an automated electronic patient record, if not immediately, eventually. It's the only way to go in terms of really being able to coordinate care well. In the whole administration policy, everything we're doing in CMS for the Office of National Coordinator is encouraging and eventually rewarding providers for moving to electronic records. Eventually, they get less money if they don't.
With this, we didn't really want to add an extra requirement to the ACOs. We want them to discover themselves what's best to manage information, but they're going to have to modernize to be successful. Rick, what do you think?
Richard J. Gilfillan, MD: I certainly would agree. I think we heard loud and clear that people wanted to have a lot of opportunity to find the best way to get into this new space of providing coordinated care for their patients. We wanted them to have plenty of liberty to make decisions about what the most important activities they needed to engage in going forward.
For some, EHRs are an absolute given. They're far down the path and the 50% would have been no problem. For others, it could have been a real challenge for them given where they are. So we thought we'd let the high tech rule run its course. Let folks get up on that and not necessarily embed that as a key part of this program, but really focus this on letting folks find their way to delivering the seamless coordination that we're after.
Ms. Kane: But it sounds like they'll have to go with the EHRs because that's the only way to do the reporting that's required.
Dr. Gilfillan: There are other ways to do it initially, but clearly it's easier to do using EHRs. EHRs are getting better at collecting the information as well as on reporting. There's kind of a nice evolutionary path that we think that EHR systems run and that practices will be on. They'll come together very naturally.
Ms. Kane. You've also made a change in the risk models. With the 1-sided risk model, the provider shares in the upside, and with the 2-sided risk model, the provider assumes the risk for potential loss. I understand that that was a little bit thorny the first go-around. Can you tell me about some of the changes that made their way into the final rule?
Dr. Berwick: I wouldn't say thorny. It's a balancing act.
Because we have duties to everyone, we want to make the program attractive so that physicians, other caregivers, and hospitals want to join the ACO movement.
We want to make sure the trust fund is protected so that money returns to the trust fund in which we can do more things for beneficiaries and sustain the trust fund over time. It's a balancing act. We guessed in the proposed rule about how much shared savings would probably be enough to recruit the energies we want.
As we listened carefully, we realized what's going on is that there's a whole spectrum of providers out there. There are people who just want to get into coordinated care, but they don't have much experience with it. We need to make it a little easier for them to get in. And that's why we modified track 1 so that it's 2 years of shared savings to a third year of risk. Right now in the first contract period in the final rule, there are 3 years of shared savings only.
In track 2, there's a little more risk at the start. There's risk in both directions. Rick has been crafting the pioneer program in the Innovation Center. You may want to describe that.
Dr. Gilfillan: We really have 3 tracks now available for folks. We have the pioneer ACO track, which for folks who are already providing these kinds of services and care for their patients and are used to operating with a model like this, they can move more rapidly forward. The first year they have the opportunity to take risk or not. Then they can decide for themselves whether it makes sense.
In the second and third year, that risk and the reward opportunities escalate. In the third year, they're actually in a position to start taking what we call population-based payment and taking the next step down the road to a different payment system to support this new and exciting care system.
Dr. Berwick: We are being more generous than in the proposed rule with those first tracks. And the more risk you take, the more gain you can have. We're more generous across the board, at least in general on the first contract period.
Ms. Kane: I guess you mentioned this a little bit, but the concern had been raised that in some cases ACOs may be tempted to undertreat or to steer away from some of the sicker patients. But I understand that there are safeguards in place. How do you prevent that?
Dr. Berwick: Well, every payment system has hazards. If we pay a fee for service, then with everything you do to get paid for, we run the risk of too much being done. Patients get hurt that way. Complications occur. You get drugs for treatments you don't really need or might not need. That's a risk.
On the other end, we are now are saying that if you can figure out how to coordinate care and make it better for patients; for example, they get to stay home instead of having to go into the hospital or they don't get complications, or you don't have to repeat things because it's coordinated, that should lower costs. You can share the savings.
There the risk is that some people, who might have other intentions, might go for the shared savings by keeping you from getting the care you really need. That's where the other side of the coin comes in. That's why we're watching. That's why we're measuring, and there's accountability. It's accountable care. The organization is accountable to the patient, the family, and to us. That comes from watching the quality and those metrics that are now in place, as well as in other ways.
We will be watching the behaviors of the players who are going to vastly reduce the risks of skimping in care or other things that shouldn't be done.
Dr. Gilfillan: We're using a survey tool to actually ask patients, "How does this new care system feel to you? Are you able to see the doctor you need to see? Are you able to go to the hospitals you want to go to? Is it feeling good?"
We'll be able to monitor on a regular basis exactly what patients are telling us about how they're feeling in this new care system. We'll actually be paying for that service in the first couple of years so that the folks who are new to this can concentrate on redesigning their care, redesigning the experience of care for their patients, so the risk is not there initially.
We'll be handling the survey for them and giving them that feedback and really allowing them to do what's most important in the early phase of this work, which is figuring out how to deliver that seamless coordinated care experience for people.
Ms. Kane: You'll be getting feedback. And then if patients are sensing that there's some kind of discomfort to them about what's going on, it will be revealed.
Dr. Berwick: It will be revealed. We can act on it. There are thresholds for sharing the savings at all. You've got to have the quality in order.
Also remember, this isn't the fee-for-service Medicare system. One of the really great things about this from my point of view is that patients don't lose any choices. If you think something is going on that you don't like, go to another doctor. Go ask for a different specialist. You have all the choices you would have in traditional ordinary Medicare.
I think it's a great bargain for patients. Because of copayments and other out of pocket expenses that often occur, when we're able to improve care in a way that reduces cost, the patient is better off financially because there's less burden for them.
Ms. Kane: It's been said that there's a big attitude change required to get providers across the whole spectrum to be working together for team care and that that's a big challenge. Do you see that as a potential issue? What would you say to groups who are dealing with that, Dr. Gilfillan?
Dr. Gilfillan: We've been around the country over the last year listening to providers, doctors, hospitals, and nurses. The one thing that's clear is they know the country needs them to provide a better care system and to provide that 3-part aim of better care, better health, and reduced costs through improvement.
They know that they need to do that. They're excited and looking forward to the opportunity to do it. One of the reasons we got such a strong reaction to the original regulations was because people said, "Gee, this doesn't feel like it's getting me to the point where I can do this." I think what we're hearing now and what we will hear is that people are saying this is what I need to start moving toward that world. They're naturally going to find their way to working together.
There will be difficulties and people will think about doing things the old way, but the reality is most people are excited about the opportunity to meet the challenge that they know the country and their patients are facing.
Dr. Berwick: One of our approaches is to try to find out where people are and meet them where they are. We would like a program in the ACO environment that invites lots of people to join depending on different levels of maturity. That's why those 3 tracks are there. We really worked hard to try to make it more attractive, even for novices, to get into the progress toward affordable accountable care.
The other thing you remember is the ACO rule that's only one of what we are now calling a suite of activities that invite more work on a quality, more learning about coordination, progress for everybody, change for everybody, change that they are meeting where they are.
The bundled payment initiative is an initiative where, if you're not ready to take coordination of an entire population, but you'd like to coordinate an episode of care, then maybe bundled payment is interesting for you. You want to start a medical home. That's interesting for you. That's a much better primary care environment. Hopefully people are going to find different roads to the same destination, which is seamless, coordinated, high-quality care for everybody.
Ms. Kane: That would be a great accomplishment. Let's talk for a moment about the advanced payment model. I understand that that came from the Center for Innovation.
Is it correct that the idea for the advanced payment model is that money in the pocket is a greater motivator than the hope of future?
Dr. Gilfillan: This came from our ACO team, which is really an integrated team across CMS that's worked together to create this suite of opportunities for ACOs. What we heard loud and clear was, it's going to cost something to start an ACO.
People have cited different numbers, but clearly there's an expense associated with starting an ACO for folks who aren't there already. We know there are some small physicians and some rural hospitals that don't have the resources necessarily to make that investment themselves.
What we heard loud and clear was that people were looking for help, and looking for some sort of support. This program is intended to provide some support upfront, some money right at the beginning, and then money on an ongoing basis during the first performance period so that they can change the way they deliver care, reengineer care, position themselves to succeed, position themselves on the quality side, and the care coordination side. At the end of the first performance period when they have shared savings, they'll then be in a position to finance their activities going forward and pay us back in effect. That's the idea.
In effect, we're giving them the anticipated savings upfront to invest and to help them get started, and eventually they'll be on a self-sustaining path. Again, we want to have a broad, inclusive program that gets lots of people involved because we won't have any shared savings if people aren't engaged.
At the end of the day, that's what this is about -- making sure we get that 3-part aim for a large part of the population. We needed to get folks up and going. We knew there was a component of the system that needed that. We made an investment in a set of 50 practices or 50 physician-based or rural-based ACOs that will give us the opportunity to evaluate whether that model adds value and whether they'll be successful and bring more people into the program.
Ms. Kane: Who is this advanced payment model available to? I understand it's not to everyone.
Dr. Gilfillan: Specifically there are some criteria that we established that look at the size of the physician-based ACO or the size of the rural hospital-based ACO. It looks at that based on a number of criteria including the revenue of the organization and tries to identify those who are most likely to need the support to get going.
It is intended for folks going into either track in the Shared Savings Program. It's not a separate track. It's really for people who say "I want to do the Shared Savings Program, but I'd like some help in getting started."
Ms. Kane: You've noted in this there are 3 ways to receive payments with the advanced payment program, correct?
Dr. Gilfillan: There are a set of components. You'll be continuing to receive fee for service as part of all of these shared savings models. We'll pay fee for service for the services that are provided to folks. There is also an upfront payment that we'll make based on the size of the ACO that will give them some of the capital needed to get started right in the beginning and make some of the investments in care-coordination activities and tools, etc.
There will be an ongoing payment on a monthly basis for each person that is assigned to that ACO. They'll get that through the first period. At the end of that, they'll look at the potential for shared savings and incentive payment based on their performance on the quality and the cost of care measures.
Ms. Kane: Do these savings-planned payment methods operate simultaneously, or is there an advantage of one over the other?
Dr. Gilfillan: These methodologies that I just described for the folks who are in the Shared Savings Program and qualify for the advanced payment program will all be made simultaneously except for the shared savings, which would be done retrospectively at the end of the first performance period.
Ms. Kane: How do specialists fit into the Shared Savings Program?
Dr. Berwick: Well, there are at least 2 ways that I can think of. Once an ACO is formed, they're going to be very interested in coordinating care. They're going to be interested in wooing specialists into relationships where care is coordinated, where the patient returns to primary care at home, where the ball isn't dropped.
I think it's a new world for specialists or some specialists. They always want to do this, but it makes it easier for them to become more coordinated with a home base for the patient.
We've also changed the attribution rule a bit so that the first cut is to see if a beneficiary is using a particular primary care source enough that we can attribute that beneficiary to Dr. Jones who wants to be in the ACO. If not, we take a cut at specialty uses and see if some patterns used can still allow a patient to enter the ACO environment. Specialists are now a little more central to the ACO than they were in the proposed rule.
Dr. Gilfillan: I think it is important to note that the ACO is really bringing together the whole delivery system. Those specialists now have a reason to think really hard about the need to coordinate care with patients' primary care physicians and with other specialists.
It's those kinds of relationships and dynamics that suddenly make an EHR make all the sense in the world. They want to be able to see what's happening and what different people do with patients. It's that kind of interplay of the relationships that result from a bunch of people coming together and saying we are going to provide outstanding care and results for this population of patients.
That's why we think we don't need to necessarily be so prescriptive on some elements because they're going to naturally find their way to the tools and the activities that will make them successful.
Dr. Berwick: I think there are going to be very exciting new forms of cooperation and coordination that we wouldn't have been smart enough to specify. We're trying to leave quite a bit of breadth here for people to come up and show the world what they can do.
Ms. Kane: Right. Speaking of care coordination, now you're also talking about home care and post hospital care, etc. How will some of the technology and ACOs be able to make that happen?
Dr. Gilfillan: There's been a rapid development of new ways of caring for folks at home -- remote monitoring, new tool scales, blood pressure tools, ways of checking your blood thinner at home. There hasn't always been a reason for people to think hard about putting those new methodologies in place. Now there's a reason for people to think hard about how to use those.
The limits to what people will dream up are unknown. That's the wonderful thing about America and it's the wonderful thing about healthcare in America. People will find exciting new ways to do things if they have a good reason to think hard about them. We think that there will be all sorts of new ways people find to deliver care at home and in other places; whereas, today, these types of care may be primarily given in the hospital.
Dr. Berwick: What I want beneficiaries to understand is we're with them where they want to be. With the new incentive systems and the possibilities that exist in the ACO, we can say to the beneficiary that everyone has an incentive in helping you stay home where you want to be. Getting care in the hospital is, in general, a way for the hospital to make its money. Now the tables are turned a little bit. Now everyone is going to be thinking, "How can I keep this person healthy and well and (at home) where they want to be?"
The other thing we're seeing as we go around the country is the hospital folks understand that now. They are reaching out and saying, "Okay, we get it. Our activity can't stop within our walls. We're extending out."
Of course, we have other programs in place right now, some as a direct result of the Affordable Care Act and some that we've done through the Innovation Center that encourage and support that thinking. We have our Partnership for Patients Program where we are looking closely at patient safety, and invested about $500 million in patient safety and activities for addressing the care that people receive when they're in the hospital.
The other wing of that is the Care Transitions Program where we invested $500 million in supporting the development of new community-based care organizations that provide support to people when they leave the hospital.
What we're seeing is a series of activities that really start centering care around the patients and the patients' needs, not around the institutions or types of providers. We're really starting to see the spread. We'll see the spread of much of that acute care out into the community and to homes.
Ms. Kane: To shift gears a little for a moment, with the emphasis on ACOs where would you say that private practices and small practices fit in?
Dr. Berwick: We're going to keep working to find ways for them to do what they want to do, which is being part of a more coordinated environment. There's a lot of entrepreneurship out there, but people don't want to be lonely. They want to know their patients can be cared for. We've tried to make accommodations in the ACO rule for rural providers to get together and offer services under the ACO model. Rural health centers can sponsor ACOs. We found a way to do that in the final rule.
Dr. Gilfillan at the Innovation Center is finding ways to reach to help rural providers find other ways, non-ACO ways to coordinate better. We'd like everybody in the seamless care world.
Dr. Gilfillan: Of course, the advanced payment program is intended to go right at supporting those rural providers. Again, we're not trying to -- we're not going to prescribe the ultimate structure of a healthcare system. We're trying to meet people where they are, give them support, and then let the evolution of healthcare take the path that makes the most sense in the eyes of the people who are closest to patients.
Ms. Kane: Every change comes with a challenge. What would you say to some of our readers who are maybe not quite convinced that this is the way to go?
Dr. Berwick: They can stand back a little bit. Not everybody has to get in. We're going to support the people who really want to get into this new world and prove that it can work. We're going to learn as we go and there will be room for everybody eventually. I hope some of those who are a little scared will look at some of the options we've given them with track one. If they're not ready for bundled payment or a medical home project, there's going to be room for everyone to kind of feel their way into this. There will be change and some discomfort, but possibly for everybody.
Ms. Kane: Are there any last words just to wrap up here? Is there any point that we haven't touched on or any final point you'd like to make?
Dr. Berwick: I'd like to just return to the patient. I mean this is about patient-centered care. That's what we're really talking about; people and families and patients who want to have health and well-being and seamlessness. Nobody wants to be in a hospital bed or taking a medication they don't need. They want health and we want to orient healthcare now more and more to the production of well-being. That's what we're after.
Dr. Gilfillan: The other thing I'd say is this is about a return to the roots and the original reasons why people went into healthcare. It's about taking care of patients and finding the best ways to care for patients. In some ways over the years, the system we created kind of took us away from that a little bit. We all got focused perhaps on other aspects and other motivations. We think this brings us right back to why we went into healthcare, which is to do good things for people who need us at the toughest times in their lives.
That's the exciting part. I think that's why there's so much excitement in the country around the work that we're doing, and that CMS and other private payers are doing. We intend to work with them and work with providers to try and get us back to that notion of why we all started in healthcare to begin with, which is to take good care of people.
Ms. Kane: I would like to thank Dr. Berwick and Dr. Gilfillan for being here today. I think they've given us some terrific insights into the significant changes that have come with the final rule for ACOs. They've also told us about some of the nuts and bolts that will really be significant in making this a success.
I'm Leslie Kane for Medscape. Thank you for joining us today.