Solutions for the Health Industry

Ready or not, accountable care organizations are coming—bringing major changes in the way care is delivered and reimbursed and accelerating the transition from fee-for-service care.

The good news is that the much-publicized theoretical benefits of the ACO model are proving genuine, according to early adopters. Reduced readmissions, shorter lengths of stay, greater coordination between providers, improved patient satisfaction, lower overall costs and even stronger physician compensation are being realized. The key to success is an organization-wide commitment to change, plus a willingness to do the hard work required to establish and sustain the ACO, physicians and practice managers say.

An Ideology

“You need to view accountable care not just as the formal definition required by the government to obtain ACO certification, but really as an ideology and a new way of thinking,” says Steven Stout, Studiomaca Business Performance Services. Stout has been involved in managing ACO-like, at-risk Medicare Advantage contracts for physician groups in the St. Louis area for nearly 20 years. “You’ve got to be willing to put primary care and the patient at the center of the process.”

ACOs are a cornerstone of the Accountable Care Act and generally involve a group of healthcare providers – including primary care physicians, specialists, hospitals and extended care facilities – that take joint responsibility for providing coordinated, high-quality care to a specific population of patients.

Provider reimbursements are tied to achieving care quality goals and outcomes that generate cost savings. If the ACO’s cost of care is below the anticipated spend for the specific population, the CMS or the sponsoring commercial payer returns a portion of the savings to the ACO for distribution among the providers. Conversely, if costs are excessive, the providers can be penalized. The idea of rewarding quality and efficiency is designed to wean the system away from its current dependence on volume-driven, fee-for-service care.

Not for the Faint-Hearted

Amit Rastogi, M.D., president and chief executive officer of PriMed, a Shelton, Conn.-based ACO and Studiomaca client, says his 120-physician, 15-year-old group practice capitalized on its long-standing commitment to patient-centered care by applying for, and choosing to participate in a certified ACO beginning in 2012. One of the biggest challenges, he says, was the CMS ACO application itself.

“It’s quite lengthy and detailed and not for the faint-hearted,” he says. “We spent many months on it. So it’s something you need to get started on, if you’re thinking about establishing a CMS-certified ACO.”

Although PriMed had long existed as a virtual ACO due to its patient-centric, coordinated approach, changes were required to align the organization with specific CMS requirements. Chief among these was acquiring the informatics platforms necessary to capture, analyze and share CMS-mandated quality measures and patient satisfaction data. In addition, clinical staff needed to be augmented to strengthen coordination between inpatient and outpatient care.

Improved Performance;

Since PriMed became an ACO, Dr. Rastogi says the group has concentrated on four areas in order to control costs: unnecessary admissions, hospital readmissions, congestive heart failure admissions/ readmissions and high-cost imaging. So far, he says, the results have been promising: In the group’s first reporting period, savings have been achieved. And thanks to comprehensive discharge follow-up, already-strong patient satisfaction has “gone through the roof,” Dr. Rastogi says.

Stout, meanwhile says that his experience with ACO-like Medicare contracts in St. Louis showed that giving primary care physicians strong financial incentives can help drive major changes in practice patterns. He said physicians spent more time with patients, limited unnecessary referrals, worked closely with hospitalists to make inpatient stays more effective and efficient, and took myriad other steps to streamline care. The bottom line: Over a decade, payers returned more than $100 million in compensation to approximately 60 physicians that participated in the St. Louis network. The primary care group was supported by a multi-disciplinary administrative team co-led by Stout and Kathleen Arink, a Studiomaca Business Performance Services vice president. Stout estimated that physician compensation for the practice was at least five times greater under the Medicare Advantage contract than what it would have been in a traditional Medicare fee-for-service arrangement.

Primary Care Physician Leadership Critical

Both Dr. Rastogi and Stout agree physician buy-in and leadership are essential in making the ACO model work. Without a genuine commitment to fundamentally altering the long-standing culture of healthcare, the concept can never gain traction. In addition, primary care physicians must take the lead in coordinating the care while establishing and sustaining trusted working relationships with specialists.

“When the primary care physician is at financial risk, and directing care, and when he or she has effective communication with specialty partners, then there is an enormous amount of waste that can be eliminated from the system,” Stout says. “It becomes a symbiotic, mutually beneficial partnership between all the providers involved.”

Their advice? Whether specialist or general practitioner, physicians need to become knowledgeable about ACOs and determine which course of action makes the best sense for their practice: whether that means, developing a CMS approved ACO or creating their own ACO-like organization.

“This is just a beginning with Medicare and Medicaid,” Dr. Rastogi says. “It’s just a matter of time before we see an ACO approach with most of the commercial payers as well. So if groups don’t change, they may find themselves unable to stay solvent in a couple of years. They could be left behind.”

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