Electronic Health Reporter

Representatives Diane Black (R-TN) and Peter Welch (D-VT) introduced bipartisan legislation to build upon the progress of Accountable Care Organizations (ACOs) in shifting the reimbursement of health care providers away from the traditional “fee for service” model to a focus on improving the health outcomes of patients. The ACO Improvement Act (H.R. 5558) will improve the ACO model by providing additional incentives focused on health outcomes, increasing collaboration between patients and doctors, and providing ACOs with additional tools.

“As a nurse of over forty years, I know firsthand the challenges facing health care professionals as they seek to provide their patients with the best care possible,” said Congressman Black. “It is unfortunate that the current fee for service payment system does little to encourage and incentivize providers and patients to use the most appropriate and effective health care options.  By incentivizing providers to focus on improving health care outcomes instead of increasing the quantity of services provided, this legislation will help improve care coordination, increase efficiency, and mostly importantly, ensure the patient receives the best care possible.”

“If we are going to reduce health care costs and increase quality, the incentives built into the provider payment system need to be changed.  In short, we need to reward value, not volume,” said Rep. Welch.  “Paying health care providers based on improvements in patient health rather than the number of procedures they perform is the way of the future.  Our legislation will advance these payment reforms and is based on the experience of ACOs in Vermont and around the country.”

An ACO is a collaborative of health care providers working together to improve the quality and efficiency of patient care, rather than increase the number and type of services performed.  The goal of ACOs is to drive down health care costs and improve patient health outcomes by creating financial incentives to provide better, more cost-effective care.  Rep. Welch is the author of a provision in the Affordable Care Act that created a nationwide Medicare ACO program.

Rep. Black, a registered nurse, is a member of the House Ways and Means Committee and Rep. Welch is a member of the House Energy and Commerce Committee.  The two committees have jurisdiction over all health care legislation in the House of Representatives.

Text of the ACO Improvement Act can be viewed here. The Black-Welch legislation will improve Medicare ACOs with a 3-pronged approach that includes:

1.    Additional incentives emphasizing health outcomes over services performed:

• Creates a pilot payment program that will disperse Medicare funds based on health outcomes rather than fee-for-service.
• Permits qualifying ACOs to provide telehealth and remote patient monitoring services.
• Provides regulatory relief that will allow qualifying providers to make health care decisions solely based on what is best for the patient.

2.    Increasing collaboration between patients and their doctors:

• Expand the ability of ACOs to reduce seniors out-of-pocket expenses for primary care visits and exams to encourage participation in their own wellness.
• Foster a stronger patient-doctor relationship by allowing patients to choose their primary care provider, including the option to choose a nurse practitioner or physician assistant in rural and underserved areas.

3.    Provide ACOs with additional tools needed for success:

• Ensure that ACOs have fair and transparent benchmarks and begin moving towards standards that account for regional differences.
• Improve data sharing between Medicare administration and the ACO to ensure better coordination of care.
• Expand the Advanced Payment ACO Model so that more rural ACOs can be established.