2015 Medicare ACO Results Reflect the Turning of the Deming Wheel

Guest post by Ken Perez, VP of healthcare policy, Omnicell, Inc.

Ken Perez
Ken Perez

Quality expert W. Edwards Deming was famous for many concepts, including the Deming Wheel or Deming Cycle, more formally known as the PDSA (Plan-Do-Study-Act) Cycle. It is a systematic series of steps for gaining valuable learning and knowledge for the continual improvement of a product or process.

The Centers for Medicare and Medicaid Services’ August 25 release of 2015 quality and financial performance results for Medicare accountable care organizations (ACOs) reflected the application of the PDSA Cycle by the participating organizations as well as CMS in its continued development and refining of its ACO programs.

At a high level, in 2015, the 404 reporting ACOs—392 in the Medicare Shared Savings Program (MSSP) and 12 in the Pioneer ACO Model—achieved $466 million in savings. A bit more than half of the ACOs (210 or 52 percent) held costs below their benchmark, and slightly less than a third (125 or 31 percent) generated savings above a minimum savings rate (MSR) and met quality performance standards, thus meriting shared savings.

As is common with most statistics and especially any material news coming out of Washington, D.C. nowadays, there were widely divergent interpretations of these results.

On the cheery side, CMS chief medical officer Patrick Conway, M.D., rhapsodized, “Accountable Care Organization initiatives in Medicare continue to grow and achieve positive results in providing better care and health outcomes while spending taxpayer dollars more wisely.”

In contrast, Clif Gaus, CEO of the National Association of ACOs, in an email message to FierceHealthcare, struck a negative tone in his appraisal of the results, sharing that his organization “was disappointed not to find stronger financial results that reflect the extensive financial and personal contributions invested by ACOs” and he also said that CMS and Congress must “take swift and decisive action to solidify the foundation of the Medicare ACO program.”

Despite these obviously divergent views, certainly neither Conway nor Gaus would disagree with the idea that the ability to learn is a critical success factor in ACO performance.

A deeper analysis of the data bears this out. As noted by CMS, more-experienced ACOs were more likely to generate savings above their MSR. In performance year 2015, 42 percent of ACOs that started in 2012 generated savings above their MSR. This compares with 37 percent for ACOs starting in 2013, 22 percent for 2014 starters, and 21 percent for 2015 starters.

The value of learning from experience was also reflected in the quality results. MSSP ACOs that reported quality measures in both 2014 and 2015 improved on 84 percent of the measures common to both years.

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mHealth Opportunity One May Not Afford to Miss

Guest post by Rashmi Katiyar, director, Kratin LLC.

Rashmi Katiyar
Rashmi Katiyar

I read an article recently in the favor of mobile development in healthcare, though the article was making sense to me, it got comments like “mobile is good but we have many other challenges to cater and mobile is far low on priority.”

As an immediate reaction, I agreed to this comment, but it kept me bugging over the time. When mobile is so powerful (with its reach) so connected why it can’t solve bigger problems? May be they are not thinking mobile beyond “find a physician” or “fitness step count” apps. There are actually endless opportunities and much more serious tasks await smartphone, in healthcare provider perspective.

Patient Assistance: Mobile can be handy guide for a patient outside and inside hospitals, it can not only give information about your facility, services and physicians but also can keep your patients engaged with notifications , health library, you tube channels , care gap management, immunization schedules, etc.

Physician Assistance: In today’s competitive healthcare industry with growing ACOs and other policies it’s equally important to keep your physicians engaged and equipped. Handy & secure access to needed information like patient data , technical terms, on call schedules etc. assist doctors, nurses and clinical staff to increase overall coordination among the care team and achieve greater satisfaction.

Population Health: Good mobile application provides opportunity to stay connected with wider number of people beyond patients, as a result it’s easy to run real-time push surveys, polls and run healthy community forums across. Social and mobile plays vital role in information spreading process, with access to more number of people things can be done altogether at different scale.

These are just some of the very high level thoughts; mobile applications are growing richer in capability and technology. One of the biggest benefits of staying connected to the patients beyond the walls of the hospitals is; it allows care team to keep check on adherence and wellness of the patients, which avoids re-admissions and reduces overall cost of care.

We discuss possibilities with various IT teams from different hospitals, more we talk more I feel the need for healthcare providers to embrace mHealth for better health outcomes and truly emerge as fee for value organization catering to not only about patient’s illness but about wellness of the each and every individual in its sphere.

Don’t Let the Transition to Value-Based Care Throw Your Practice Off Course

Guest post by Alok Prasad, CEO, RevenueXL.

Though many Medicare and private payer reimbursement programs that require practices to begin moving to value-based compensation already have set sail, most small practices are still treading water near the shore when it comes to this new wave of payment models.

While admirable in their care goals, these quality care-based reimbursement programs can pose some insurmountable challenges for small providers. In fact, they require a whole new way of providing care for some practices, as well as creating new documentation of integrated data analysis, development of care coordination with other providers, payer reporting applications, and often times new technologies that can support these new provisions.

What’s more, all this change also can be quite expensive for small practices and wreak havoc on current business practices.

Set the course
No doubt about it, though, the move to value-based care is on. According to the 2015 Physician Compensation Survey, conducted by Physicians Practice magazine, 63 percent of physician compensation is currently tied to productivity; 37 percent to value metrics and 29 percent to patient satisfaction scores.

The Centers for Medicare and Medicaid Services (CMS), however, has expressed its goals of having more providers participating in value-based plans each year, with a goal of 50 percent by 2018. And it has further incentivized physician participation by specifying increasing reductions in payments for non-participation that began in 2013.

So unless they want to start leaving money on the table, practices have no choice but to take the plunge into such new compensation programs.

Lift the Anchor
Before diving in and potentially draining money and resources to participate in such programs, physicians need to look around and assess their current situation to determine how the new reimbursement model might work in their practice. For example, they need to evaluate current technology, vendors, resources and physician support to determine what changes they need to make, as well as what internal infrastructure they can use.

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The Comprehensive ESRD Care Model: The First Disease-Specific ACO Program

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

Under the authority of Section 3021 of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has launched a variety of accountable care organization (ACO) initiatives, including the Pioneer ACO Model, the Medicare Shared Savings Program (MSSP), the Advance Payment ACO Model, and the Next Generation ACO Model. ACOs continue to be the most aggressive of the healthcare delivery reforms mandated by the ACA.

Notably, none of the aforementioned ACO models has a disease-specific focus. During the past few years, DaVita Inc., the nation’s second-largest dialysis provider, lobbied CMS diligently for a renal-specific ACO or at least creation of a framework that would allow for a disease-specific approach. DaVita formed the Accountable Kidney Care Collaborative to prepare the nephrology community to participate broadly in general ACOs and/or in disease-specific renal ACOs.

An ACO Program Focused on Renal Disease

On Oct. 7, 2015, the Center for Medicare and Medicaid Innovation (the Innovation Center) made a groundbreaking announcement, launching the Comprehensive ESRD Care (CEC) Model, with its sole focus on end-stage renal disease (ESRD), also known as kidney failure. This disease afflicts more than 600,000 Americans. These individuals require life-sustaining dialysis treatments several times each week. In 2012, ESRD beneficiaries comprised 1.1 percent of the Medicare population and accounted for $26 billion or 5.6 percent of total Medicare spending.

The CEC Model’s first three-year agreement period began on Oct. 1, 2015, with 13 ESCOs in 11 states: Arizona, California, Florida, Illinois, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, and Texas. All except one of the 13 ESCOs are owned by a large dialysis organization (LDO), defined as an organization that owns 200 or more dialysis facilities. Dialysis Clinic, Inc. (DCI), the nation’s largest non-profit dialysis provider, owns three of the ESCOs, as does DaVita. Fresenius, the largest dialysis provider, owns six of the ESCOs. The lone non-LDO is the Rogosin Institute in New York City.

As with all Medicare ACO programs, the CEC Model has both quality measures and expenditure-reduction targets which impact the model’s payment arrangements.

Quality Measures

The CEC Model features 26 quality measures—14 outcome and 12 process—for both LDOs and non-LDOs. The quality measures span five domains: patient safety, person- and caregiver-centered experience and outcomes, communication and care coordination, clinical quality of care, and population health.

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Keeping the 2014 Medicare ACO Results in Perspective

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

“We have to take the long view, and be focused on iterating, evolving, and improving the concept, rather than seeking summary judgment.” – Farzad Mostashari, former national coordinator for health information technology, commenting on accountable care organizations

On Aug. 25, 2015, the Centers for Medicare and Medicaid Services (CMS) released 2014 financial and quality performance results for 353 accountable care organizations, 333 in the Medicare Shared Savings Program (MSSP) and 20 in the Pioneer ACO Model (although as of this writing, the CMS website only lists 19 Pioneer ACOs). As is customary, proponents (such as CMS) and critics of ACOs interpreted the results quite differently, as a glass half-full or half-empty.

Pioneer ACO Performance

During the third performance year, the Pioneer ACOs generated total model savings of $120 million. That figure constitutes a 24 percent increase versus the $96 million of savings produced during the previous year. A total of 15 ACOs (75 percent of all Pioneers) were able to generate savings during performance year three, compared with 14 ACOs (61 percent of all Pioneers) for the prior year. Of those generating savings in the most recent performance year, 11 Pioneers produced savings that exceeded the minimum savings rate, garnering shared savings payments totaling $82 million. One quarter of the 20 Pioneers generated losses, with three generating losses beyond a minimum loss rate, requiring them to make $9 million in shared-loss payments to CMS.

The Pioneers improved the quality of care delivered during performance year three, as their mean quality score rose from 85.2 percent to 87.2 percent year-to-year. The Pioneers improved in 28 of 33 quality measures and generated average improvements of 3.6 percent across all quality measures compared to Performance year two. CMS highlighted significant improvement in medication reconciliation (up from 70 percent to 84 percent), screening for clinical depression and follow-up plan (up from 50 percent to 60 percent), and qualification for an electronic health record incentive payment (up from 77 percent to 86 percent).

Moreover, Pioneer ACOs improved the average performance score for patient and caregiver experience in five out of seven measures compared to performance year two.

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Can the Pioneer ACOs Survive without the PCMH Model?

Guest post by Timothy “Dutch” Dwight, vice president of business development, Medullan, Inc.

Timothy “Dutch” Dwight

Will today’s pioneer ACOs share the same demise as the HMOs of the 80s and 90s? It’s certainly starting to look that way.

Like HMOs, ACOs (Accountable Care Organizations) were created to reign in excessive fee-for-service arrangements and provide an incentive for capitating costs. The premise was that under the umbrella of an ACO, providers and payers would share in the responsibility for quality, cost and coordinated care for a defined population of patients.

If an ACO saved money for the payer without compromising quality, providers — defined as physician practices, hospitals, group practices, physician-hospital alliances and networks -–would share in the savings. And the savings were projected to be significant. Early forecasts from the Congressional Budget Office estimated that the 32 pioneer ACOs could save more than $1.1 billion in the first five years. On the other hand, if the ACO failed to meet capitation limits while providing care, the group shared in the losses.

To offset the risk and encourage membership, the early ACOs were supposed to receive multi-year compensation. However, that financial support disappeared after the first year and most provider groups did not have the business margins to carry them through a long-term investment approach. In addition, the ACO model requires a draw on scant resources from all parties to create another layer of program oversight – further cutting in to margin.

So where does the ACO model stand today? Nineteen of the 32 pioneer ACOs have left the program over the last two years, resulting in considerable wasted taxpayer dollars. As CMS moves towards the Next Generation program, can it succeed?

What will it take to save the ACO?

I believe ACOs can be saved, but significant changes must be enacted.

The fundamental problem with the pioneer ACO is that it manages the care of an unhealthy population without having sufficient oversight of that population. This leads a risk-adverse industry to hold their cash and cling to old processes.

Two years ago, Clayton Christensen rightly pointed out that the provider community must make major process and procedural changes in order for the ACO model to work. “No dent in costs is possible until the structure of healthcare is fundamentally changed.” I couldn’t agree more.

To survive, ACOs need to align with the Patient Centered Medical Home (PCMH) model, which is continuing to thrive and grow. PCMH is designed to align more holistic care management with a consumer incentive to prevent high-spend patients from seeking services from the more costly care centers such as emergency rooms. The payer, or insurance company, rewards the consumer for making smart choices by reducing deductibles and other fees if they use lower cost service centers such as primary care physicians, nurse practitioners, and urgent care centers. PCMH models use a combination of fee-for-service, value based payments to providers and align consumer incentives to reduce the cost of care. Comparatively, the ACOs capitated, “value based” payment model, intends only to lower the cost of care without having the proper procedures, tools and feedback loops in place to account how that care is provided. In other words, a visit to a PCP or ER makes no difference in the ACO model. On their own, ACOs do not have enough process control(s) and sufficient incentives to change patient behavior.

However, in combining the ACOs and PCMH model, the healthcare industry stands a much greater likelihood of meeting its goals — to improve the quality of care while containing or lowering the costs.

What needs to happen?

It starts with patient education – consumers need to be educated about their options and when and how to best use them. The next step is employing financial incentives. In short, money talks and will be key in changing old habits. When there is financial reward for going to one’s PCP or an urgent care center instead of an ER, consumers will make smarter choices. And ACOs will have an easier time capitating costs.

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How ACOs are Influencing the Provider-Payer Battle

Guest post by April Wortham Collins, manager of customer segment analysis, Decision Resources Group.

April Wortham Collins
April Wortham Collins

Under the traditional fee-for-service reimbursement model, providers and payers are natural adversaries. To maintain a steady source of revenue, providers are incentivized to render as many services as possible without running afoul of controls designed by payers to keep utilization in check. When healthcare costs inevitably creep up, providers demand higher reimbursements from payers. Payers, trying to keep claim in check and health insurance premiums competitive, respond by restricting members’ access to certain providers.

It’s this tension between payers and providers that forms the backbone of the U.S. healthcare system. At least, it has until recently. Policy and political leaders have come to realize that, absent of other factors such as quality, efficiency and patient satisfaction, healthcare costs will continue to rise, creating a weight under which the system will eventually collapse.

Enter the accountable care organization, a new model for healthcare delivery and reimbursement that exemplifies the key tenants of the Affordable Care Act and the healthcare Triple Aim: improving the patient experience of care, improving the health of populations and reducing per capita costs. Unlike the fee-for-service reimbursement model that rewards providers based on volume of services, the ACO model rewards providers for achieving specified quality objectives and constraining costs.

On their face, ACOs would seem to encourage cooperation between payers and providers. After all, to improve population health, providers need claims data and the type of technology solutions that payers have been investing in for decades. And to reduce healthcare costs, payers need to partner with quality providers with proven track records for keeping patients healthy. Ask any patient who has bounced back and forth between doctors’ offices and their health insurance company trying to sort out a medical bill, and the opportunity for improving the patient experience of care is tremendous.

So far, many ACOs are doing just that. Of the nearly 1,100 ACO contracts that Decision Resources Group is tracking today, more than half are commercial agreements involving 70 private payers. The largest private-payer ACO initiative in the country is led by Cigna, whose Collaborative Accountable Care program has 124 ACO agreements in 29 states encompassing more than 24,000 primary-care physicians and 27,000  specialists.

However, other aspects of healthcare reform are adding fuel to the payer-provider fire—and ACOs are a flashpoint. To keep health insurance premiums competitive, payers are excluding high-cost providers from their networks. Many of these narrow or exclusive provider networks also function as an ACO, with attached health plan products that are proving popular in public health insurance exchanges.

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Health IT Thought Leader Highlight: David Caldwell, Transcend Insights

David Caldwell
David Caldwell

David Caldwell is the vice president of sales and marketing at Transcend Insights, a wholly owned subsidiary of Humana Inc., dedicated to simplifying population health. Transcend Insights helps manage the complexities of population health through community-wide interoperability, real-time healthcare analytics and intuitive care tools. The company’s HealthLogix platform provides healthcare systems, physicians and care teams with valuable clinical insights that enable more informed decisions at the point of care, enhance the patient experience and reduce costs.

Here, Caldwell discusses how the firm serves its clients; the benefits of analytics and its impact on ACOs; population health initiatives; and the future of the company.

Tell us a bit about your product offerings and the role that they play in the health care technology space.

Transcend Insights is a population health management company that provides health care systems, physicians and care teams with advanced community-wide interoperability, real-time health care analytics and intuitive care tools designed to simplify the complexities of population health. The new company represents the merging of three leading health care technology businesses—Certify Data Systems, Anvita Health and nliven systems. We integrated Anvita’s health care analytics into Certify’s HealthLogix™ platform to provide physicians and care teams with the real-time insights necessary to improve health outcomes and reduce costs. In addition, we made these insights accessible at the fingertips of physicians and care teams through a mobile point of care solution, a technology we gained from nliven.

Today, Transcend Insights works with more than 130 health systems, serving at least 600 hospitals and over 20,000 physicians. Through community-wide interoperability, we help large health care systems gain access to both acute care and ambulatory data that reside in various silos across the care continuum.

We analyze 2.3 billion clinical data points on 10.8 million patients every day. Our analytics engine offers more than 33,000 evidence-based clinical rules and last year identified over 36 million opportunities to improve care and helped our clients close 4.3 million gaps in care.

Lastly, we leveraged nliven’s expertise in mobile health technology to develop a mobile point of care solution that allows physicians and care teams to not only visualize data but also gather and assimilate patient data in real-time.

Who are your customers and what level of clinician typically accesses your product on a day-to-day basis?

The vast majority of our customers are multi-hospital, integrated health care delivery networks that have purchased our product to help them move from a fee-for-service to a value-based care delivery model. Our customers utilize the HealthLogix platform to reach both contracted and affiliated physicians, and to piece together disparate electronic health record (EHR) system data across the care continuum.

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HHS’ Vision Casting and the Private Sector’s Positive Response

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

We’ve often seen the U.S. federal government announce its intent to drive major changes in the way the healthcare system is run, only to have the private sector respond in a tepid or negative manner.

That was not the case at a January 26 Department of Health and Human Services meeting, at which HHS Secretary Sylvia M. Burwell announced concrete goals and an aggressive timeline for moving Medicare payments from fee for service to fee for value. Nearly two dozen leaders representing consumers, insurers, providers and business leaders were in attendance and clearly supportive of the vision cast by Burwell. Notably, high-ranking representatives from the American Academy of Family Physicians, the American Medical Association, the American Hospital Association, and America’s Health Insurance Plans (AHIP) were among the participants.

The announcement was a landmark one. For the first time in the history of the Medicare program, HHS has communicated quantified goals for pushing a significantly greater share of Medicare payments through alternative payment models, such as accountable care organizations (ACOs) and bundled payments. Such payments will rise from 20 percent ($72.4 billion) of Medicare payments in 2014 to 30 percent ($113 billion) in 2016 and 50 percent ($213 billion) in 2018—a compound annual growth rate of 31 percent over the five-year period.

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The Inexorable March toward Accountable Care: CMS Adds 89 New MSSP ACOs

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

During much of 2014, there seemed to be a rising tide of negativism about the Centers for Medicare & Medicaid Services’ accountable care organization (ACO) programs. After losing nine of its participating organizations after its first year of operation, the Pioneer ACO model suffered some more high-profile departures in 2014.

In August, Sharp HealthCare, a five-hospital system in San Diego, Calif., exited the program, and the following month, three other ACOs—Franciscan Alliance in central Indiana, Genesys PHO in Flint, Mich., and Renaissance Health Network in Pennsylvania—also dropped out. Since the Pioneer program’s inception in January 2012, the total number of Pioneers has dropped by 41 percent, from 32 participants to 19.

The bad news wasn’t confined to the Pioneer program. An October 2014 survey by the National Association of ACOs (NAACOS) indicated that two-thirds of Medicare Shared Savings Program (MSSP) participants are “highly” or “somewhat” unlikely to remain in the ACO program as it currently stands. Clearly, the Medicare ACO ship certainly seemed to be sinking.

In an attempt to right the ship, on Dec. 1, 2014, CMS released a long-awaited 429-page proposed rule to modify the MSSP, seeking to retain as many of the current MSSP ACOs as possible and attract new participants to the program. The words “encourage” or “encouraging” appear almost 100 times in the document—with an eye, ultimately, toward greater ACO participation in risk-based models. However, in spite of CMS’s intention, NAACOS and the American Hospital Association’s initial responses to the proposed rule were generally critical. CMS is accepting public comments until Feb. 6, 2015, after which it will compose the final rule, a process which should take, if history is a guide, three to six months.

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