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How to harness value-based care codes
Many of you reading this column joined Medicare accountable care organizations (ACOs) sometime between 2011 and 2016. As the power of prevention, wellness, and the medical home model are starting to be realized and appreciated, those benefits may be swamped by two new Centers for Medicare and Medicaid Services value-based revenue streams that did not exist when many of you first joined your ACO.
The Medicare Access and CHIP Reauthorization Act (MACRA) was passed in 2015 and is just now being implemented. Value-based, fee-for-service payments started out rather modestly a few years ago as chronic care management codes, but they have exploded to include more than 20 codes, counting the new ones coming online in 2018. Let’s call them collectively value-based care codes, or VCCs.
Many practices are trying to understand and perform the basic requirements to avoid penalties under MACRA’s Merit-based Incentive Payment System (MIPS) program. Some primary care practices, however, see the upside potential and bonuses stacking up to 30% or more.
Did you know that even if you are in, let’s say, a basic Medicare Shared Savings Program ACO – the MSSP Track 1, with no exposure to risk – you get special treatment on reporting under MACRA as a MIPS Advanced Practice Model (APM)?
But more importantly, MACRA is a team game. Getting into an MSSP Track 1 is justified just to get practice for the care coordination you’ll need. Few physicians know that they are judged under MACRA MIPS for the total costs of their patients, not just their own costs. A primary care physician receives only up to 8% of the $10 million your patients consume on average. The best way to counter that is through an ACO.
Further, we are aware of ACOs that have chosen risk-taking Medicare models such as NextGen, even though they predict small losses. Those losses are because of the automatic 5% fee-for-service payment bump to its physicians for risk taking if they are in a MACRA Advanced Alternative Payment Model (AAPM).
There’s a wide range of primary care physicians who are seizing opportunities offered by VCCs.
A family physician friend of mine who practices in a rural area generated more than 50% of his revenue from value-based care coding last year. And he has personally generated more than $350,000 in additional annual revenue, not counting the revenue from additional medically necessary procedures revealed by this more proactive wellness assessment activity and early diagnoses.
On the other hand, because busy physicians have a hard time wading through all these regulations and implementing the required staff and technology changes, it is reported that only about 8% of physicians are employing even the chronic care management codes. And when they do, they only achieve an 18% eligible patient penetration. My friend has broken the code, so to speak; he has protocolized and templated the process, has happy patients, has an ongoing 93% penetration rate, and actually has more free time.
While you are busy saving lives, I have had the luxury of looking from a high level at these tectonic, value-based payment shifts. To me, it’s a no-brainer for a primary care physician to leverage their ACO to maximize all three revenue streams. Look at MACRA MIPS, MIPS-APM, and AAPM measures anew, and see how well they play into integrated care.
As quarterback of health care through the patient-centered medical home, you are in great position to drive substantial bonuses. Similarly, when one looks at VCCs, the ACO can: help you navigate through the paperwork, perform much of the required reporting, and select the highest value-adding initiatives to monitor and drive higher quality and shared savings for the ACO.
As readers know, we firmly believe that, to have sustained incentivization, every ACO needs to have a merit-based, shared savings distribution formula. Accordingly, your compensation should rise under MACRA, VCCs, and the ACO.
This shift to value care is hard. But your colleagues who have made these changes are enjoying practice as never before. Their professional and financial rewards have climbed. But, most important, their patients love it.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Many of you reading this column joined Medicare accountable care organizations (ACOs) sometime between 2011 and 2016. As the power of prevention, wellness, and the medical home model are starting to be realized and appreciated, those benefits may be swamped by two new Centers for Medicare and Medicaid Services value-based revenue streams that did not exist when many of you first joined your ACO.
The Medicare Access and CHIP Reauthorization Act (MACRA) was passed in 2015 and is just now being implemented. Value-based, fee-for-service payments started out rather modestly a few years ago as chronic care management codes, but they have exploded to include more than 20 codes, counting the new ones coming online in 2018. Let’s call them collectively value-based care codes, or VCCs.
Many practices are trying to understand and perform the basic requirements to avoid penalties under MACRA’s Merit-based Incentive Payment System (MIPS) program. Some primary care practices, however, see the upside potential and bonuses stacking up to 30% or more.
Did you know that even if you are in, let’s say, a basic Medicare Shared Savings Program ACO – the MSSP Track 1, with no exposure to risk – you get special treatment on reporting under MACRA as a MIPS Advanced Practice Model (APM)?
But more importantly, MACRA is a team game. Getting into an MSSP Track 1 is justified just to get practice for the care coordination you’ll need. Few physicians know that they are judged under MACRA MIPS for the total costs of their patients, not just their own costs. A primary care physician receives only up to 8% of the $10 million your patients consume on average. The best way to counter that is through an ACO.
Further, we are aware of ACOs that have chosen risk-taking Medicare models such as NextGen, even though they predict small losses. Those losses are because of the automatic 5% fee-for-service payment bump to its physicians for risk taking if they are in a MACRA Advanced Alternative Payment Model (AAPM).
There’s a wide range of primary care physicians who are seizing opportunities offered by VCCs.
A family physician friend of mine who practices in a rural area generated more than 50% of his revenue from value-based care coding last year. And he has personally generated more than $350,000 in additional annual revenue, not counting the revenue from additional medically necessary procedures revealed by this more proactive wellness assessment activity and early diagnoses.
On the other hand, because busy physicians have a hard time wading through all these regulations and implementing the required staff and technology changes, it is reported that only about 8% of physicians are employing even the chronic care management codes. And when they do, they only achieve an 18% eligible patient penetration. My friend has broken the code, so to speak; he has protocolized and templated the process, has happy patients, has an ongoing 93% penetration rate, and actually has more free time.
While you are busy saving lives, I have had the luxury of looking from a high level at these tectonic, value-based payment shifts. To me, it’s a no-brainer for a primary care physician to leverage their ACO to maximize all three revenue streams. Look at MACRA MIPS, MIPS-APM, and AAPM measures anew, and see how well they play into integrated care.
As quarterback of health care through the patient-centered medical home, you are in great position to drive substantial bonuses. Similarly, when one looks at VCCs, the ACO can: help you navigate through the paperwork, perform much of the required reporting, and select the highest value-adding initiatives to monitor and drive higher quality and shared savings for the ACO.
As readers know, we firmly believe that, to have sustained incentivization, every ACO needs to have a merit-based, shared savings distribution formula. Accordingly, your compensation should rise under MACRA, VCCs, and the ACO.
This shift to value care is hard. But your colleagues who have made these changes are enjoying practice as never before. Their professional and financial rewards have climbed. But, most important, their patients love it.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Many of you reading this column joined Medicare accountable care organizations (ACOs) sometime between 2011 and 2016. As the power of prevention, wellness, and the medical home model are starting to be realized and appreciated, those benefits may be swamped by two new Centers for Medicare and Medicaid Services value-based revenue streams that did not exist when many of you first joined your ACO.
The Medicare Access and CHIP Reauthorization Act (MACRA) was passed in 2015 and is just now being implemented. Value-based, fee-for-service payments started out rather modestly a few years ago as chronic care management codes, but they have exploded to include more than 20 codes, counting the new ones coming online in 2018. Let’s call them collectively value-based care codes, or VCCs.
Many practices are trying to understand and perform the basic requirements to avoid penalties under MACRA’s Merit-based Incentive Payment System (MIPS) program. Some primary care practices, however, see the upside potential and bonuses stacking up to 30% or more.
Did you know that even if you are in, let’s say, a basic Medicare Shared Savings Program ACO – the MSSP Track 1, with no exposure to risk – you get special treatment on reporting under MACRA as a MIPS Advanced Practice Model (APM)?
But more importantly, MACRA is a team game. Getting into an MSSP Track 1 is justified just to get practice for the care coordination you’ll need. Few physicians know that they are judged under MACRA MIPS for the total costs of their patients, not just their own costs. A primary care physician receives only up to 8% of the $10 million your patients consume on average. The best way to counter that is through an ACO.
Further, we are aware of ACOs that have chosen risk-taking Medicare models such as NextGen, even though they predict small losses. Those losses are because of the automatic 5% fee-for-service payment bump to its physicians for risk taking if they are in a MACRA Advanced Alternative Payment Model (AAPM).
There’s a wide range of primary care physicians who are seizing opportunities offered by VCCs.
A family physician friend of mine who practices in a rural area generated more than 50% of his revenue from value-based care coding last year. And he has personally generated more than $350,000 in additional annual revenue, not counting the revenue from additional medically necessary procedures revealed by this more proactive wellness assessment activity and early diagnoses.
On the other hand, because busy physicians have a hard time wading through all these regulations and implementing the required staff and technology changes, it is reported that only about 8% of physicians are employing even the chronic care management codes. And when they do, they only achieve an 18% eligible patient penetration. My friend has broken the code, so to speak; he has protocolized and templated the process, has happy patients, has an ongoing 93% penetration rate, and actually has more free time.
While you are busy saving lives, I have had the luxury of looking from a high level at these tectonic, value-based payment shifts. To me, it’s a no-brainer for a primary care physician to leverage their ACO to maximize all three revenue streams. Look at MACRA MIPS, MIPS-APM, and AAPM measures anew, and see how well they play into integrated care.
As quarterback of health care through the patient-centered medical home, you are in great position to drive substantial bonuses. Similarly, when one looks at VCCs, the ACO can: help you navigate through the paperwork, perform much of the required reporting, and select the highest value-adding initiatives to monitor and drive higher quality and shared savings for the ACO.
As readers know, we firmly believe that, to have sustained incentivization, every ACO needs to have a merit-based, shared savings distribution formula. Accordingly, your compensation should rise under MACRA, VCCs, and the ACO.
This shift to value care is hard. But your colleagues who have made these changes are enjoying practice as never before. Their professional and financial rewards have climbed. But, most important, their patients love it.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
How to work with specialists in value-based care
The typical primary care physician has a patient base that consumes $10 million of health care a year. Yet the PCP receives only 6%-7% of those payments, with the rest of the costs resulting largely from the PCP’s referrals or lack of PCP care management of that patient.
The average PCP makes 1,000 referrals a year. Often, the referee specialist or facility not only does not coordinate with the PCP’s patient-centered medical home, they make their own downstream referrals.
A revolution in your compensation is underway. Under MACRA and other accountable care models, providers across the continuum of care are now being held responsible for the overall costs of those patients, not just their charges.
This is still hard to grasp, isn’t it? I was recently talking to a preeminent primary care physician who was an active member of an accountable care organization board of directors. I was fairly excited about the new impact this highly professional community leader could have on patients, now that he was in the PCP-driven ACO, not to mention his shared savings payment opportunities.
I was on a roll until he said, “But Bo, I’m already as efficient in treating patients as I can get.” He was still fighting the barriers you all face to do the best he could under the circumstances for the patients in his office each day.
Later, however, on a better day for me, we were working together on a cardiac care white paper. The physician leader told me, “I get it now – the biggest value-adding impact I might have is for the patient I don’t ever see.”
The above statistics show just what an opportunity you have in the new value care.
You can legally control referrals and patient care coordination with specialists. They don’t have to be in your ACO. You don’t even need to be in an ACO to take advantage of high-value referrals under the Medicare Merit-based Incentive Payment System (MIPS) program under MACRA. But how?
Let’s start by assuming the specialist you need to refer to is not in your ACO. You might be able to do this without an ACO, but it’s hard to get the critical mass of primary care physicians. If you’re under the Medicare Shared Savings Program or Next Gen initiative, there are important Stark Law and antikickback liability waivers that would benefit you by being in an ACO.
Otherwise, you should consider a high-value referral affiliation agreement.
If a critical mass of primary care physicians can access data that create a short list of high-value specialists, they can put them on the high-value specialist list. Specialists do not need to get part of the shared savings pool or other financial incentives – just referrals because of their high-quality and high-efficiency care. A superstar specialist or acute care or post–acute care facility may ultimately be invited into the ACO as a full participant.
The specialist/facility basically agrees to coordinate all care with the medical home and comanage that care with you. The agreement specifies that they will observe the care protocols of the ACO for that disease state. The provider will share data and agree to be monitored.
What is a high-value specialist/facility? The current common approach is to look at the insurance companies’ top tiers, but they are often too weighted to allowed charges. It’s really about being care coordinators and about readmission and complication rates.
For example, some bundled-payment specialists are selected solely based on the surgeons’ and anesthesiologists’ complication rates. If fees are mentioned at all, they are well down the list.
Of course, if the specialist is in the ACO with the primary care physician, this can be done internally.
How do you find value-added protocols involving specialists? I was lucky to be on a multiyear grant program whereby I worked with many primary care physicians and specialists to create white papers setting out high-value, practical initiatives. There are also guides for internists and family physicians. A condition of the grant was that they all can be accessed free of charge; they’re available at www.tac-consortium.org/resources.
This is a new day. Primary care is being asked to lead health care delivery today and be paid to do it. You are being rewarded or punished financially now based on the overall costs of your patients. You must have specialists and facilities coordinate with you in this new health care model. We have attempted to provide a road map to assist you on your journey.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
The typical primary care physician has a patient base that consumes $10 million of health care a year. Yet the PCP receives only 6%-7% of those payments, with the rest of the costs resulting largely from the PCP’s referrals or lack of PCP care management of that patient.
The average PCP makes 1,000 referrals a year. Often, the referee specialist or facility not only does not coordinate with the PCP’s patient-centered medical home, they make their own downstream referrals.
A revolution in your compensation is underway. Under MACRA and other accountable care models, providers across the continuum of care are now being held responsible for the overall costs of those patients, not just their charges.
This is still hard to grasp, isn’t it? I was recently talking to a preeminent primary care physician who was an active member of an accountable care organization board of directors. I was fairly excited about the new impact this highly professional community leader could have on patients, now that he was in the PCP-driven ACO, not to mention his shared savings payment opportunities.
I was on a roll until he said, “But Bo, I’m already as efficient in treating patients as I can get.” He was still fighting the barriers you all face to do the best he could under the circumstances for the patients in his office each day.
Later, however, on a better day for me, we were working together on a cardiac care white paper. The physician leader told me, “I get it now – the biggest value-adding impact I might have is for the patient I don’t ever see.”
The above statistics show just what an opportunity you have in the new value care.
You can legally control referrals and patient care coordination with specialists. They don’t have to be in your ACO. You don’t even need to be in an ACO to take advantage of high-value referrals under the Medicare Merit-based Incentive Payment System (MIPS) program under MACRA. But how?
Let’s start by assuming the specialist you need to refer to is not in your ACO. You might be able to do this without an ACO, but it’s hard to get the critical mass of primary care physicians. If you’re under the Medicare Shared Savings Program or Next Gen initiative, there are important Stark Law and antikickback liability waivers that would benefit you by being in an ACO.
Otherwise, you should consider a high-value referral affiliation agreement.
If a critical mass of primary care physicians can access data that create a short list of high-value specialists, they can put them on the high-value specialist list. Specialists do not need to get part of the shared savings pool or other financial incentives – just referrals because of their high-quality and high-efficiency care. A superstar specialist or acute care or post–acute care facility may ultimately be invited into the ACO as a full participant.
The specialist/facility basically agrees to coordinate all care with the medical home and comanage that care with you. The agreement specifies that they will observe the care protocols of the ACO for that disease state. The provider will share data and agree to be monitored.
What is a high-value specialist/facility? The current common approach is to look at the insurance companies’ top tiers, but they are often too weighted to allowed charges. It’s really about being care coordinators and about readmission and complication rates.
For example, some bundled-payment specialists are selected solely based on the surgeons’ and anesthesiologists’ complication rates. If fees are mentioned at all, they are well down the list.
Of course, if the specialist is in the ACO with the primary care physician, this can be done internally.
How do you find value-added protocols involving specialists? I was lucky to be on a multiyear grant program whereby I worked with many primary care physicians and specialists to create white papers setting out high-value, practical initiatives. There are also guides for internists and family physicians. A condition of the grant was that they all can be accessed free of charge; they’re available at www.tac-consortium.org/resources.
This is a new day. Primary care is being asked to lead health care delivery today and be paid to do it. You are being rewarded or punished financially now based on the overall costs of your patients. You must have specialists and facilities coordinate with you in this new health care model. We have attempted to provide a road map to assist you on your journey.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
The typical primary care physician has a patient base that consumes $10 million of health care a year. Yet the PCP receives only 6%-7% of those payments, with the rest of the costs resulting largely from the PCP’s referrals or lack of PCP care management of that patient.
The average PCP makes 1,000 referrals a year. Often, the referee specialist or facility not only does not coordinate with the PCP’s patient-centered medical home, they make their own downstream referrals.
A revolution in your compensation is underway. Under MACRA and other accountable care models, providers across the continuum of care are now being held responsible for the overall costs of those patients, not just their charges.
This is still hard to grasp, isn’t it? I was recently talking to a preeminent primary care physician who was an active member of an accountable care organization board of directors. I was fairly excited about the new impact this highly professional community leader could have on patients, now that he was in the PCP-driven ACO, not to mention his shared savings payment opportunities.
I was on a roll until he said, “But Bo, I’m already as efficient in treating patients as I can get.” He was still fighting the barriers you all face to do the best he could under the circumstances for the patients in his office each day.
Later, however, on a better day for me, we were working together on a cardiac care white paper. The physician leader told me, “I get it now – the biggest value-adding impact I might have is for the patient I don’t ever see.”
The above statistics show just what an opportunity you have in the new value care.
You can legally control referrals and patient care coordination with specialists. They don’t have to be in your ACO. You don’t even need to be in an ACO to take advantage of high-value referrals under the Medicare Merit-based Incentive Payment System (MIPS) program under MACRA. But how?
Let’s start by assuming the specialist you need to refer to is not in your ACO. You might be able to do this without an ACO, but it’s hard to get the critical mass of primary care physicians. If you’re under the Medicare Shared Savings Program or Next Gen initiative, there are important Stark Law and antikickback liability waivers that would benefit you by being in an ACO.
Otherwise, you should consider a high-value referral affiliation agreement.
If a critical mass of primary care physicians can access data that create a short list of high-value specialists, they can put them on the high-value specialist list. Specialists do not need to get part of the shared savings pool or other financial incentives – just referrals because of their high-quality and high-efficiency care. A superstar specialist or acute care or post–acute care facility may ultimately be invited into the ACO as a full participant.
The specialist/facility basically agrees to coordinate all care with the medical home and comanage that care with you. The agreement specifies that they will observe the care protocols of the ACO for that disease state. The provider will share data and agree to be monitored.
What is a high-value specialist/facility? The current common approach is to look at the insurance companies’ top tiers, but they are often too weighted to allowed charges. It’s really about being care coordinators and about readmission and complication rates.
For example, some bundled-payment specialists are selected solely based on the surgeons’ and anesthesiologists’ complication rates. If fees are mentioned at all, they are well down the list.
Of course, if the specialist is in the ACO with the primary care physician, this can be done internally.
How do you find value-added protocols involving specialists? I was lucky to be on a multiyear grant program whereby I worked with many primary care physicians and specialists to create white papers setting out high-value, practical initiatives. There are also guides for internists and family physicians. A condition of the grant was that they all can be accessed free of charge; they’re available at www.tac-consortium.org/resources.
This is a new day. Primary care is being asked to lead health care delivery today and be paid to do it. You are being rewarded or punished financially now based on the overall costs of your patients. You must have specialists and facilities coordinate with you in this new health care model. We have attempted to provide a road map to assist you on your journey.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
CMS makes economics of primary care ACOs more appealing
As you may have read, accountable care organizations have met uneven success over the last several years. But, when they are broken down into categories, physician-sponsored ACOs have done better, particularly those with a strong primary care core.
This is true for several reasons.
In this transition period from a fee-for-service payment system that rewards volume and expensive inpatient care to a pay-for-value system, some ACOs set up by health systems or specialists envisioned the savings coming through lower utilization of their services. They had an inherent impediment to fully committing to keeping people well and avoiding acute care. In contrast, primary care providers are free to be all in with population health value-based programs.
However, because the fee-for-service system has historically left primary care physicians at the bottom of the compensation food chain, we have a “can’t get there from here” dilemma. It is a cruel irony that the group best suited to stretch America’s health care dollar and benefit both professionally and financially usually does not have the capital to create and operate an ACO for the roughly 18 months before shared savings are distributed.
The Centers for Medicare & Medicaid Services has tried to mitigate this by offering financial support for small, non–health system ACOs, particularly those in rural areas. Some of those enrolled ACOs are primary care driven and have been among the most successful in the MSSP.
Nonetheless, the upfront costs, paired with the long delay for the sole economic return on the investment – shared savings – have combined to be deal killers for many promising would-be primary care ACOs.
New upfront payments are game changers
A successful ACO will be assigned one or more patient populations and be given a minimum of 50% of the savings for the overall costs for those populations, if the quality of their health is maintained or improved.
To excise avoidable waste, the ACO looks at gaps in care for those populations – frequent emergency department use for nonemergencies, avoidably high levels of diabetes and obesity, too-high readmission rates, unnecessarily high postacute care costs, etc. They then use evidence-based best team care practices – from patient self care and prevention, to multispecialty coordination and PCMH care management.
Why? Because these proved to give the highest impact on quality and reducing costs. To achieve significant shared savings, the costs are usually measured for a calendar year, then it takes about 6 months for the claims to be reported and paid. Thus, the shared savings check to the ACO will arrive about 18 months after all this is started.
The CMS has also figured out that primary care physician care coordination and management drive quality and savings. The agency knows that incentivizing this type of care, the very type calculated to create ACO success, will net significant savings to the Medicare program.
For example, the pilot project for preventing diabetes will be expanded, because Medicare hopes to save several thousand dollars a year per beneficiary in health care costs.
In a blog entry the day the expanded population health management codes were announced, the CMS acting administrator wrote that, “Over time, if the clinicians qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase would be as much as $4 billion or more in additional support for care coordination and patient-centered care.”
CMS revenue streams to support ACO success-driving activities include:
• Value-based screening and counseling codes to decrease downstream costs.
• Upward adjustment of evaluation and management reimbursement for assessment of care and care plan development for mobility-impaired patients.
• Annual wellness visits.
• Prolonged E&M services that accrue outside of a patient visit.
• Collaboration with mental health specialists.
• Comprehensive assessment and care planning for patients with cognitive impairment.
• Expansion of the diabetes prevention pilot program; diabetes prevention and diabetes education are two separate services.
• Transitional care management for high-risk patients post discharge.
• Structured obesity management.
The 2017 Medicare fee schedule smoothed some of the bumps in administering and being paid for chronic care management (CCM) services, and it added codes with increased reimbursement aligned with increased complexity of comorbidities/illness.
Perhaps the biggest new payment boost for primary care to engage in ACO high-value activities is actually the Merit-Based Incentive Payment System (MIPS) under MACRA, the Medicare Access and CHIP Reauthorization Act of 2015.
Under MACRA, all Medicare compensation for physicians will be determined by relative delivery of quality and efficient care. Experts are recommending that primary care physicians participate in non–risk-taking ACOs to optimize MIPS value scoring, while also reducing administrative burdens of compliance. Use an ACO’s analytics to support collaborative care and provide the reports required under MIPS.
Let’s be smart about it
According to Gordon Wilhoit, MD, a practicing physician and chief medical officer of an all–primary-care-physician ACO in South Carolina, “This is a no brainer. Start first with your MSSP ACO high-value game plan, then align the complementary care coordination codes, CCM, MIPS, and other revenue stream and reporting activities with it. Now, primary care physicians can finance their ACO and MIPS care coordination efforts with a stream of ongoing payments from these care management codes.
“One of my colleagues saw a 27% increase in revenues in 6 months just from providing and billing for this type of care,” Dr. Wilhoit explained. “And, not counting shared savings or MIPS incentive payments, our office’s reimbursement from these care management codes now exceeds our fee-for-service income, which has not decreased.”
Even with these payments, the CMS will reduce overall net expenditures. Your impact on health care will be more powerful as a manager of the team addressing patients’ overall health than reacting to patient sickness one at a time. The patients you impact the most may be ones you don’t actually see. Your empowerment to practice medicine the right way will continue to grow.
Now, finally, you may start getting compensation that takes away the last big hurdle to creating the infrastructure you need to succeed.
Mr. Bobbitt is a head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of, and Dr. Wilhoit is a consultant with, Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at either [email protected] or 919-906-4054.
As you may have read, accountable care organizations have met uneven success over the last several years. But, when they are broken down into categories, physician-sponsored ACOs have done better, particularly those with a strong primary care core.
This is true for several reasons.
In this transition period from a fee-for-service payment system that rewards volume and expensive inpatient care to a pay-for-value system, some ACOs set up by health systems or specialists envisioned the savings coming through lower utilization of their services. They had an inherent impediment to fully committing to keeping people well and avoiding acute care. In contrast, primary care providers are free to be all in with population health value-based programs.
However, because the fee-for-service system has historically left primary care physicians at the bottom of the compensation food chain, we have a “can’t get there from here” dilemma. It is a cruel irony that the group best suited to stretch America’s health care dollar and benefit both professionally and financially usually does not have the capital to create and operate an ACO for the roughly 18 months before shared savings are distributed.
The Centers for Medicare & Medicaid Services has tried to mitigate this by offering financial support for small, non–health system ACOs, particularly those in rural areas. Some of those enrolled ACOs are primary care driven and have been among the most successful in the MSSP.
Nonetheless, the upfront costs, paired with the long delay for the sole economic return on the investment – shared savings – have combined to be deal killers for many promising would-be primary care ACOs.
New upfront payments are game changers
A successful ACO will be assigned one or more patient populations and be given a minimum of 50% of the savings for the overall costs for those populations, if the quality of their health is maintained or improved.
To excise avoidable waste, the ACO looks at gaps in care for those populations – frequent emergency department use for nonemergencies, avoidably high levels of diabetes and obesity, too-high readmission rates, unnecessarily high postacute care costs, etc. They then use evidence-based best team care practices – from patient self care and prevention, to multispecialty coordination and PCMH care management.
Why? Because these proved to give the highest impact on quality and reducing costs. To achieve significant shared savings, the costs are usually measured for a calendar year, then it takes about 6 months for the claims to be reported and paid. Thus, the shared savings check to the ACO will arrive about 18 months after all this is started.
The CMS has also figured out that primary care physician care coordination and management drive quality and savings. The agency knows that incentivizing this type of care, the very type calculated to create ACO success, will net significant savings to the Medicare program.
For example, the pilot project for preventing diabetes will be expanded, because Medicare hopes to save several thousand dollars a year per beneficiary in health care costs.
In a blog entry the day the expanded population health management codes were announced, the CMS acting administrator wrote that, “Over time, if the clinicians qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase would be as much as $4 billion or more in additional support for care coordination and patient-centered care.”
CMS revenue streams to support ACO success-driving activities include:
• Value-based screening and counseling codes to decrease downstream costs.
• Upward adjustment of evaluation and management reimbursement for assessment of care and care plan development for mobility-impaired patients.
• Annual wellness visits.
• Prolonged E&M services that accrue outside of a patient visit.
• Collaboration with mental health specialists.
• Comprehensive assessment and care planning for patients with cognitive impairment.
• Expansion of the diabetes prevention pilot program; diabetes prevention and diabetes education are two separate services.
• Transitional care management for high-risk patients post discharge.
• Structured obesity management.
The 2017 Medicare fee schedule smoothed some of the bumps in administering and being paid for chronic care management (CCM) services, and it added codes with increased reimbursement aligned with increased complexity of comorbidities/illness.
Perhaps the biggest new payment boost for primary care to engage in ACO high-value activities is actually the Merit-Based Incentive Payment System (MIPS) under MACRA, the Medicare Access and CHIP Reauthorization Act of 2015.
Under MACRA, all Medicare compensation for physicians will be determined by relative delivery of quality and efficient care. Experts are recommending that primary care physicians participate in non–risk-taking ACOs to optimize MIPS value scoring, while also reducing administrative burdens of compliance. Use an ACO’s analytics to support collaborative care and provide the reports required under MIPS.
Let’s be smart about it
According to Gordon Wilhoit, MD, a practicing physician and chief medical officer of an all–primary-care-physician ACO in South Carolina, “This is a no brainer. Start first with your MSSP ACO high-value game plan, then align the complementary care coordination codes, CCM, MIPS, and other revenue stream and reporting activities with it. Now, primary care physicians can finance their ACO and MIPS care coordination efforts with a stream of ongoing payments from these care management codes.
“One of my colleagues saw a 27% increase in revenues in 6 months just from providing and billing for this type of care,” Dr. Wilhoit explained. “And, not counting shared savings or MIPS incentive payments, our office’s reimbursement from these care management codes now exceeds our fee-for-service income, which has not decreased.”
Even with these payments, the CMS will reduce overall net expenditures. Your impact on health care will be more powerful as a manager of the team addressing patients’ overall health than reacting to patient sickness one at a time. The patients you impact the most may be ones you don’t actually see. Your empowerment to practice medicine the right way will continue to grow.
Now, finally, you may start getting compensation that takes away the last big hurdle to creating the infrastructure you need to succeed.
Mr. Bobbitt is a head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of, and Dr. Wilhoit is a consultant with, Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at either [email protected] or 919-906-4054.
As you may have read, accountable care organizations have met uneven success over the last several years. But, when they are broken down into categories, physician-sponsored ACOs have done better, particularly those with a strong primary care core.
This is true for several reasons.
In this transition period from a fee-for-service payment system that rewards volume and expensive inpatient care to a pay-for-value system, some ACOs set up by health systems or specialists envisioned the savings coming through lower utilization of their services. They had an inherent impediment to fully committing to keeping people well and avoiding acute care. In contrast, primary care providers are free to be all in with population health value-based programs.
However, because the fee-for-service system has historically left primary care physicians at the bottom of the compensation food chain, we have a “can’t get there from here” dilemma. It is a cruel irony that the group best suited to stretch America’s health care dollar and benefit both professionally and financially usually does not have the capital to create and operate an ACO for the roughly 18 months before shared savings are distributed.
The Centers for Medicare & Medicaid Services has tried to mitigate this by offering financial support for small, non–health system ACOs, particularly those in rural areas. Some of those enrolled ACOs are primary care driven and have been among the most successful in the MSSP.
Nonetheless, the upfront costs, paired with the long delay for the sole economic return on the investment – shared savings – have combined to be deal killers for many promising would-be primary care ACOs.
New upfront payments are game changers
A successful ACO will be assigned one or more patient populations and be given a minimum of 50% of the savings for the overall costs for those populations, if the quality of their health is maintained or improved.
To excise avoidable waste, the ACO looks at gaps in care for those populations – frequent emergency department use for nonemergencies, avoidably high levels of diabetes and obesity, too-high readmission rates, unnecessarily high postacute care costs, etc. They then use evidence-based best team care practices – from patient self care and prevention, to multispecialty coordination and PCMH care management.
Why? Because these proved to give the highest impact on quality and reducing costs. To achieve significant shared savings, the costs are usually measured for a calendar year, then it takes about 6 months for the claims to be reported and paid. Thus, the shared savings check to the ACO will arrive about 18 months after all this is started.
The CMS has also figured out that primary care physician care coordination and management drive quality and savings. The agency knows that incentivizing this type of care, the very type calculated to create ACO success, will net significant savings to the Medicare program.
For example, the pilot project for preventing diabetes will be expanded, because Medicare hopes to save several thousand dollars a year per beneficiary in health care costs.
In a blog entry the day the expanded population health management codes were announced, the CMS acting administrator wrote that, “Over time, if the clinicians qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase would be as much as $4 billion or more in additional support for care coordination and patient-centered care.”
CMS revenue streams to support ACO success-driving activities include:
• Value-based screening and counseling codes to decrease downstream costs.
• Upward adjustment of evaluation and management reimbursement for assessment of care and care plan development for mobility-impaired patients.
• Annual wellness visits.
• Prolonged E&M services that accrue outside of a patient visit.
• Collaboration with mental health specialists.
• Comprehensive assessment and care planning for patients with cognitive impairment.
• Expansion of the diabetes prevention pilot program; diabetes prevention and diabetes education are two separate services.
• Transitional care management for high-risk patients post discharge.
• Structured obesity management.
The 2017 Medicare fee schedule smoothed some of the bumps in administering and being paid for chronic care management (CCM) services, and it added codes with increased reimbursement aligned with increased complexity of comorbidities/illness.
Perhaps the biggest new payment boost for primary care to engage in ACO high-value activities is actually the Merit-Based Incentive Payment System (MIPS) under MACRA, the Medicare Access and CHIP Reauthorization Act of 2015.
Under MACRA, all Medicare compensation for physicians will be determined by relative delivery of quality and efficient care. Experts are recommending that primary care physicians participate in non–risk-taking ACOs to optimize MIPS value scoring, while also reducing administrative burdens of compliance. Use an ACO’s analytics to support collaborative care and provide the reports required under MIPS.
Let’s be smart about it
According to Gordon Wilhoit, MD, a practicing physician and chief medical officer of an all–primary-care-physician ACO in South Carolina, “This is a no brainer. Start first with your MSSP ACO high-value game plan, then align the complementary care coordination codes, CCM, MIPS, and other revenue stream and reporting activities with it. Now, primary care physicians can finance their ACO and MIPS care coordination efforts with a stream of ongoing payments from these care management codes.
“One of my colleagues saw a 27% increase in revenues in 6 months just from providing and billing for this type of care,” Dr. Wilhoit explained. “And, not counting shared savings or MIPS incentive payments, our office’s reimbursement from these care management codes now exceeds our fee-for-service income, which has not decreased.”
Even with these payments, the CMS will reduce overall net expenditures. Your impact on health care will be more powerful as a manager of the team addressing patients’ overall health than reacting to patient sickness one at a time. The patients you impact the most may be ones you don’t actually see. Your empowerment to practice medicine the right way will continue to grow.
Now, finally, you may start getting compensation that takes away the last big hurdle to creating the infrastructure you need to succeed.
Mr. Bobbitt is a head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of, and Dr. Wilhoit is a consultant with, Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at either [email protected] or 919-906-4054.
ACO Insider: Not ready for an ACO? Think CPC+
The Centers for Medicare & Medicaid Services in April announced its newest initiative, Comprehensive Primary Care Plus, to target primary care practices of varying capabilities to participate in an innovative payment model designed to support the delivery of comprehensive primary care that rewards value and quality.
“Strengthening primary care is critical to an effective health care system,” said Patrick Conway, MD, CMS deputy administrator and chief medical officer. “By supporting primary care doctors and clinicians to spend time with patients, serve patients’ needs outside of the office visit, and better coordinate care with specialists, we can continue to build a health care system that results in healthier people and smarter spending of our health care dollars.”
As readers of this column know, these are also the engines of accountable care organization success. So, if you and your patient-centered medical home are not in a Medicare ACO, this gets you going on high-value activities – and pays you monthly to do it.
The rub is that once you are in the Medicare Shared Savings Program, you can’t continue with this initiative. But, it’s a great “on ramp” to prep you for ACO success. You get monthly payments instead of waiting 18 months for shared savings that you may or may not get under the Medicare Shared Savings Program.
CPC+ is an advanced primary medical home model, created from lessons learned in the Comprehensive Primary Care Initiative and the Multi-Payer Advanced Primary Care Practice Demonstration. Similar to these programs, multi-payer engagement is an essential component of the model.
In the CPC+ model, the CMS intends to nationally solicit a variety of payers committed to strengthening primary care in up to 20 regions and accept up to 5,000 practices to participate in those regions. The CPC+ program is further evidence that primary care should not only be a fundamental component to moving our health care system to one that awards clinicians based on the quality, not quantity, of care they give patients, but that payment redesign must provide flexibility to accommodate the diverse needs of primary care practices.
What to know about payment
To provide this flexibility and to attract practices of varying capabilities and levels of experience, the CPC+ program offers two tracks with different payment options, which include a monthly care management fee, comprehensive primary care payments, and performance-based incentive payments.
In track 1, the CMS will pay practices a risk-adjusted prospective monthly care management fee ($15 per beneficiary per month [PBPM] average across four risk tiers), in addition to the fee-for-service payments under the Medicare Physician Fee Schedule for activities.
In track 2, the Medicare monthly care management fees will average $28 PBPM across five risk tiers, which includes a $100 care management fee to support care for patients with the most complex needs. Instead of full Medicare fee-for-service payments for evaluation and management services, track 2 practices will receive a hybrid of reduced Medicare fee-for-service payments and up-front comprehensive primary care payments for those services.
In addition, the CMS is providing incentive payments at $2.50 PBPM for track 1 and $4 PBPM for track 2, based on practice performance on utilization metrics and quality, measured at the practice level. While these payments are prepaid at the beginning of a performance year, they are subject to recoupment if the practice does not meet thresholds for quality and utilization performance.
What to know about participation
To participate, your practice must be located within 1 of the 20 regional geographic areas selected by the CMS and must serve not only Medicare beneficiaries, but patients covered by one or more additional participating payers.
You may apply for either track 1 or track 2, but participation for the entire 5-year period will be within a single track.
All practices will be expected to deliver a set of five comprehensive primary care functions and have certified electronic health record technology capabilities. Track 2 practices will be expected to focus on a core set of advance capabilities for health information technology and must submit a letter of support from their health IT vendors. The CMS may require a track 2 applicant to participate in track 1.
Participating in the CPC+ program limits your ability to fully participate in or utilize other CMS initiatives, models, or demonstrations, however – including the Medicare Shared Savings Program and Next Generation ACO, or bill for the chronic care management fee. This is a big trade-off for practices well down the value transformation path, but an opportunity for those getting started.
Although the shift to payment for improved population health can herald the golden age of primary care, you cannot default on this opportunity through inaction. It is urgent that you choose a path to value-care delivery. CPC+ provides the ability for greater cash flow and flexibility for primary care practices to deliver high-quality, whole-person patient-centered care.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians to form integrated delivery systems and prepare for the value-based compensation era. Mr. Parker is a member of the health law group at Smith Anderson and works with Mr. Bobbitt to guide physicians regarding preparing for value-based care. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
The Centers for Medicare & Medicaid Services in April announced its newest initiative, Comprehensive Primary Care Plus, to target primary care practices of varying capabilities to participate in an innovative payment model designed to support the delivery of comprehensive primary care that rewards value and quality.
“Strengthening primary care is critical to an effective health care system,” said Patrick Conway, MD, CMS deputy administrator and chief medical officer. “By supporting primary care doctors and clinicians to spend time with patients, serve patients’ needs outside of the office visit, and better coordinate care with specialists, we can continue to build a health care system that results in healthier people and smarter spending of our health care dollars.”
As readers of this column know, these are also the engines of accountable care organization success. So, if you and your patient-centered medical home are not in a Medicare ACO, this gets you going on high-value activities – and pays you monthly to do it.
The rub is that once you are in the Medicare Shared Savings Program, you can’t continue with this initiative. But, it’s a great “on ramp” to prep you for ACO success. You get monthly payments instead of waiting 18 months for shared savings that you may or may not get under the Medicare Shared Savings Program.
CPC+ is an advanced primary medical home model, created from lessons learned in the Comprehensive Primary Care Initiative and the Multi-Payer Advanced Primary Care Practice Demonstration. Similar to these programs, multi-payer engagement is an essential component of the model.
In the CPC+ model, the CMS intends to nationally solicit a variety of payers committed to strengthening primary care in up to 20 regions and accept up to 5,000 practices to participate in those regions. The CPC+ program is further evidence that primary care should not only be a fundamental component to moving our health care system to one that awards clinicians based on the quality, not quantity, of care they give patients, but that payment redesign must provide flexibility to accommodate the diverse needs of primary care practices.
What to know about payment
To provide this flexibility and to attract practices of varying capabilities and levels of experience, the CPC+ program offers two tracks with different payment options, which include a monthly care management fee, comprehensive primary care payments, and performance-based incentive payments.
In track 1, the CMS will pay practices a risk-adjusted prospective monthly care management fee ($15 per beneficiary per month [PBPM] average across four risk tiers), in addition to the fee-for-service payments under the Medicare Physician Fee Schedule for activities.
In track 2, the Medicare monthly care management fees will average $28 PBPM across five risk tiers, which includes a $100 care management fee to support care for patients with the most complex needs. Instead of full Medicare fee-for-service payments for evaluation and management services, track 2 practices will receive a hybrid of reduced Medicare fee-for-service payments and up-front comprehensive primary care payments for those services.
In addition, the CMS is providing incentive payments at $2.50 PBPM for track 1 and $4 PBPM for track 2, based on practice performance on utilization metrics and quality, measured at the practice level. While these payments are prepaid at the beginning of a performance year, they are subject to recoupment if the practice does not meet thresholds for quality and utilization performance.
What to know about participation
To participate, your practice must be located within 1 of the 20 regional geographic areas selected by the CMS and must serve not only Medicare beneficiaries, but patients covered by one or more additional participating payers.
You may apply for either track 1 or track 2, but participation for the entire 5-year period will be within a single track.
All practices will be expected to deliver a set of five comprehensive primary care functions and have certified electronic health record technology capabilities. Track 2 practices will be expected to focus on a core set of advance capabilities for health information technology and must submit a letter of support from their health IT vendors. The CMS may require a track 2 applicant to participate in track 1.
Participating in the CPC+ program limits your ability to fully participate in or utilize other CMS initiatives, models, or demonstrations, however – including the Medicare Shared Savings Program and Next Generation ACO, or bill for the chronic care management fee. This is a big trade-off for practices well down the value transformation path, but an opportunity for those getting started.
Although the shift to payment for improved population health can herald the golden age of primary care, you cannot default on this opportunity through inaction. It is urgent that you choose a path to value-care delivery. CPC+ provides the ability for greater cash flow and flexibility for primary care practices to deliver high-quality, whole-person patient-centered care.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians to form integrated delivery systems and prepare for the value-based compensation era. Mr. Parker is a member of the health law group at Smith Anderson and works with Mr. Bobbitt to guide physicians regarding preparing for value-based care. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
The Centers for Medicare & Medicaid Services in April announced its newest initiative, Comprehensive Primary Care Plus, to target primary care practices of varying capabilities to participate in an innovative payment model designed to support the delivery of comprehensive primary care that rewards value and quality.
“Strengthening primary care is critical to an effective health care system,” said Patrick Conway, MD, CMS deputy administrator and chief medical officer. “By supporting primary care doctors and clinicians to spend time with patients, serve patients’ needs outside of the office visit, and better coordinate care with specialists, we can continue to build a health care system that results in healthier people and smarter spending of our health care dollars.”
As readers of this column know, these are also the engines of accountable care organization success. So, if you and your patient-centered medical home are not in a Medicare ACO, this gets you going on high-value activities – and pays you monthly to do it.
The rub is that once you are in the Medicare Shared Savings Program, you can’t continue with this initiative. But, it’s a great “on ramp” to prep you for ACO success. You get monthly payments instead of waiting 18 months for shared savings that you may or may not get under the Medicare Shared Savings Program.
CPC+ is an advanced primary medical home model, created from lessons learned in the Comprehensive Primary Care Initiative and the Multi-Payer Advanced Primary Care Practice Demonstration. Similar to these programs, multi-payer engagement is an essential component of the model.
In the CPC+ model, the CMS intends to nationally solicit a variety of payers committed to strengthening primary care in up to 20 regions and accept up to 5,000 practices to participate in those regions. The CPC+ program is further evidence that primary care should not only be a fundamental component to moving our health care system to one that awards clinicians based on the quality, not quantity, of care they give patients, but that payment redesign must provide flexibility to accommodate the diverse needs of primary care practices.
What to know about payment
To provide this flexibility and to attract practices of varying capabilities and levels of experience, the CPC+ program offers two tracks with different payment options, which include a monthly care management fee, comprehensive primary care payments, and performance-based incentive payments.
In track 1, the CMS will pay practices a risk-adjusted prospective monthly care management fee ($15 per beneficiary per month [PBPM] average across four risk tiers), in addition to the fee-for-service payments under the Medicare Physician Fee Schedule for activities.
In track 2, the Medicare monthly care management fees will average $28 PBPM across five risk tiers, which includes a $100 care management fee to support care for patients with the most complex needs. Instead of full Medicare fee-for-service payments for evaluation and management services, track 2 practices will receive a hybrid of reduced Medicare fee-for-service payments and up-front comprehensive primary care payments for those services.
In addition, the CMS is providing incentive payments at $2.50 PBPM for track 1 and $4 PBPM for track 2, based on practice performance on utilization metrics and quality, measured at the practice level. While these payments are prepaid at the beginning of a performance year, they are subject to recoupment if the practice does not meet thresholds for quality and utilization performance.
What to know about participation
To participate, your practice must be located within 1 of the 20 regional geographic areas selected by the CMS and must serve not only Medicare beneficiaries, but patients covered by one or more additional participating payers.
You may apply for either track 1 or track 2, but participation for the entire 5-year period will be within a single track.
All practices will be expected to deliver a set of five comprehensive primary care functions and have certified electronic health record technology capabilities. Track 2 practices will be expected to focus on a core set of advance capabilities for health information technology and must submit a letter of support from their health IT vendors. The CMS may require a track 2 applicant to participate in track 1.
Participating in the CPC+ program limits your ability to fully participate in or utilize other CMS initiatives, models, or demonstrations, however – including the Medicare Shared Savings Program and Next Generation ACO, or bill for the chronic care management fee. This is a big trade-off for practices well down the value transformation path, but an opportunity for those getting started.
Although the shift to payment for improved population health can herald the golden age of primary care, you cannot default on this opportunity through inaction. It is urgent that you choose a path to value-care delivery. CPC+ provides the ability for greater cash flow and flexibility for primary care practices to deliver high-quality, whole-person patient-centered care.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians to form integrated delivery systems and prepare for the value-based compensation era. Mr. Parker is a member of the health law group at Smith Anderson and works with Mr. Bobbitt to guide physicians regarding preparing for value-based care. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
ACO Insider: MACRA – don’t let indecision be your biggest decision
By now, most of us have heard of accountable care organizations and bundled payment. But for many of you, the shift to value-based population health management or compensation based on performance hasn’t affected your practice.
You still get paid fee for service. You’ve seen “the next big thing” in health care come and go; you don’t have the capital or spare intellectual bandwidth to make the transformation to value-based care – and as many of you have told me, at the end of the day, you just want to see patients.
There are a lot of reasons to sit on the sidelines a while longer. I get it. But that indecision could result in the biggest decision of your career. But it won’t be your decision – it will be defaulted to others. Why?
Welcome to MACRA – the Medicare Access and CHIP Reauthorization Act. On April 16, 2015, President Obama signed sweeping legislation irrevocably moving the American health care system to value-based payment. The United States Senate and House – Republicans and Democrats – came together to replace the Sustainable Growth Rate formula (SGR) with MACRA.
MACRA represents the end of a long history of perpetually delayed Medicare physician fee schedule cuts that were to be automatically triggered under the punitive SGR formula absent Congress’ annual postponement ritual. After providing for a series of annual physician payment increases, MACRA’s reimbursement methodology transitions to a value-based model that includes two pathways: 1) the Alternative Payment Model (APM), and 2) the Merit-Based Incentive Payment System (MIPS).
APMs include organizations that are focused on providing high-quality and cost-effective care, while also taking on significant financial risk (for example, an ACO).
MACRA highly incentivizes provider participation in APMs. For example, APM participants will receive 5% bonus payments from 2019 to 2024, if they receive a certain percentage of their Medicare revenue through APMs. In addition, providers qualifying as APM participants are excluded from participating in the MIPS model and are subject only to their own quality standards.
Under the MIPS model, provider performance will be evaluated according to established performance standards and used to calculate an adjustment factor that will then determine a provider’s payment for the year.
The performance standards will include the following weighted categories: 1. quality, 2. resource use, 3. clinical practice improvement activities, and 4. meaningful use. Depending on their performance in these categories, providers will receive either a positive adjustment, no adjustment, or a negative adjustment.
In 2022, these adjustments will range from a 9% negative adjustment to a similar positive adjustment. MIPS will apply to all Medicare services and items provided on or after Jan. 1, 2019.
What does this mean to you?
You are going to be reimbursed as if you have embraced value-based population health management, whether you really do or not. The MIPS formula could deny you north of 9% of your payments. Conversely, if you decide to get into an ACO or something similar, you not only don’t get dinged, you receive a 5% bump in fee-for-service compensation and the chance for additional savings payments. Of course, you have to decide to actually engage and lead this care improvement from your medical home. A fake ACO that lets costs rise will be responsible for those increases.
Readers of this column know that the statistics are bearing out the fact that primary care–led ACOs are the best model. The whole premise has changed. Instead of paying for volume and expensive procedures for very sick people, it rewards value – that is the highest quality at the lowest costs – through things in primary care’s wheelhouse: prevention, wellness, care coordination, complex patient management, and medical home care transition management.
In fact, CMS has recognized this by making primary care subspecialties the only ones required to be in the Medicare ACO program and the Medicare Shared Savings Program (MSSP), and recently with its ACO Investment Model, which prioritized ACO advanced infrastructure payments to physician- or small hospital-led ACOs in rural areas.
There are more physician-owned ACOs today than any other kind. If you are part of another type of ACO, such as one driven by a health system or multispecialty practice, don’t despair. They can work, too. But you need to step up and make sure they do.
The price of passivity
MACRA’s shifting of the annual flow of $3 trillion from rewarding volume to rewarding value will, in this author’s estimation, have MACRA easily eclipse the Affordable Care Act in significance. Indecision will not stop your placement in the value-based payment system. Why not control your destiny to achieve your professional and financial goals as leaders of health care? Through indecision, you will be both unprepared and defaulted into the quality and efficiency compensation measurements of MIPS.
MACRA has changed everything. You’ve been asked to lead American health care and get paid to do it. This is not a hard question. Please feel free to contact me directly with questions or comments on how to prepare.
Mr. Bobbitt is a head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
By now, most of us have heard of accountable care organizations and bundled payment. But for many of you, the shift to value-based population health management or compensation based on performance hasn’t affected your practice.
You still get paid fee for service. You’ve seen “the next big thing” in health care come and go; you don’t have the capital or spare intellectual bandwidth to make the transformation to value-based care – and as many of you have told me, at the end of the day, you just want to see patients.
There are a lot of reasons to sit on the sidelines a while longer. I get it. But that indecision could result in the biggest decision of your career. But it won’t be your decision – it will be defaulted to others. Why?
Welcome to MACRA – the Medicare Access and CHIP Reauthorization Act. On April 16, 2015, President Obama signed sweeping legislation irrevocably moving the American health care system to value-based payment. The United States Senate and House – Republicans and Democrats – came together to replace the Sustainable Growth Rate formula (SGR) with MACRA.
MACRA represents the end of a long history of perpetually delayed Medicare physician fee schedule cuts that were to be automatically triggered under the punitive SGR formula absent Congress’ annual postponement ritual. After providing for a series of annual physician payment increases, MACRA’s reimbursement methodology transitions to a value-based model that includes two pathways: 1) the Alternative Payment Model (APM), and 2) the Merit-Based Incentive Payment System (MIPS).
APMs include organizations that are focused on providing high-quality and cost-effective care, while also taking on significant financial risk (for example, an ACO).
MACRA highly incentivizes provider participation in APMs. For example, APM participants will receive 5% bonus payments from 2019 to 2024, if they receive a certain percentage of their Medicare revenue through APMs. In addition, providers qualifying as APM participants are excluded from participating in the MIPS model and are subject only to their own quality standards.
Under the MIPS model, provider performance will be evaluated according to established performance standards and used to calculate an adjustment factor that will then determine a provider’s payment for the year.
The performance standards will include the following weighted categories: 1. quality, 2. resource use, 3. clinical practice improvement activities, and 4. meaningful use. Depending on their performance in these categories, providers will receive either a positive adjustment, no adjustment, or a negative adjustment.
In 2022, these adjustments will range from a 9% negative adjustment to a similar positive adjustment. MIPS will apply to all Medicare services and items provided on or after Jan. 1, 2019.
What does this mean to you?
You are going to be reimbursed as if you have embraced value-based population health management, whether you really do or not. The MIPS formula could deny you north of 9% of your payments. Conversely, if you decide to get into an ACO or something similar, you not only don’t get dinged, you receive a 5% bump in fee-for-service compensation and the chance for additional savings payments. Of course, you have to decide to actually engage and lead this care improvement from your medical home. A fake ACO that lets costs rise will be responsible for those increases.
Readers of this column know that the statistics are bearing out the fact that primary care–led ACOs are the best model. The whole premise has changed. Instead of paying for volume and expensive procedures for very sick people, it rewards value – that is the highest quality at the lowest costs – through things in primary care’s wheelhouse: prevention, wellness, care coordination, complex patient management, and medical home care transition management.
In fact, CMS has recognized this by making primary care subspecialties the only ones required to be in the Medicare ACO program and the Medicare Shared Savings Program (MSSP), and recently with its ACO Investment Model, which prioritized ACO advanced infrastructure payments to physician- or small hospital-led ACOs in rural areas.
There are more physician-owned ACOs today than any other kind. If you are part of another type of ACO, such as one driven by a health system or multispecialty practice, don’t despair. They can work, too. But you need to step up and make sure they do.
The price of passivity
MACRA’s shifting of the annual flow of $3 trillion from rewarding volume to rewarding value will, in this author’s estimation, have MACRA easily eclipse the Affordable Care Act in significance. Indecision will not stop your placement in the value-based payment system. Why not control your destiny to achieve your professional and financial goals as leaders of health care? Through indecision, you will be both unprepared and defaulted into the quality and efficiency compensation measurements of MIPS.
MACRA has changed everything. You’ve been asked to lead American health care and get paid to do it. This is not a hard question. Please feel free to contact me directly with questions or comments on how to prepare.
Mr. Bobbitt is a head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
By now, most of us have heard of accountable care organizations and bundled payment. But for many of you, the shift to value-based population health management or compensation based on performance hasn’t affected your practice.
You still get paid fee for service. You’ve seen “the next big thing” in health care come and go; you don’t have the capital or spare intellectual bandwidth to make the transformation to value-based care – and as many of you have told me, at the end of the day, you just want to see patients.
There are a lot of reasons to sit on the sidelines a while longer. I get it. But that indecision could result in the biggest decision of your career. But it won’t be your decision – it will be defaulted to others. Why?
Welcome to MACRA – the Medicare Access and CHIP Reauthorization Act. On April 16, 2015, President Obama signed sweeping legislation irrevocably moving the American health care system to value-based payment. The United States Senate and House – Republicans and Democrats – came together to replace the Sustainable Growth Rate formula (SGR) with MACRA.
MACRA represents the end of a long history of perpetually delayed Medicare physician fee schedule cuts that were to be automatically triggered under the punitive SGR formula absent Congress’ annual postponement ritual. After providing for a series of annual physician payment increases, MACRA’s reimbursement methodology transitions to a value-based model that includes two pathways: 1) the Alternative Payment Model (APM), and 2) the Merit-Based Incentive Payment System (MIPS).
APMs include organizations that are focused on providing high-quality and cost-effective care, while also taking on significant financial risk (for example, an ACO).
MACRA highly incentivizes provider participation in APMs. For example, APM participants will receive 5% bonus payments from 2019 to 2024, if they receive a certain percentage of their Medicare revenue through APMs. In addition, providers qualifying as APM participants are excluded from participating in the MIPS model and are subject only to their own quality standards.
Under the MIPS model, provider performance will be evaluated according to established performance standards and used to calculate an adjustment factor that will then determine a provider’s payment for the year.
The performance standards will include the following weighted categories: 1. quality, 2. resource use, 3. clinical practice improvement activities, and 4. meaningful use. Depending on their performance in these categories, providers will receive either a positive adjustment, no adjustment, or a negative adjustment.
In 2022, these adjustments will range from a 9% negative adjustment to a similar positive adjustment. MIPS will apply to all Medicare services and items provided on or after Jan. 1, 2019.
What does this mean to you?
You are going to be reimbursed as if you have embraced value-based population health management, whether you really do or not. The MIPS formula could deny you north of 9% of your payments. Conversely, if you decide to get into an ACO or something similar, you not only don’t get dinged, you receive a 5% bump in fee-for-service compensation and the chance for additional savings payments. Of course, you have to decide to actually engage and lead this care improvement from your medical home. A fake ACO that lets costs rise will be responsible for those increases.
Readers of this column know that the statistics are bearing out the fact that primary care–led ACOs are the best model. The whole premise has changed. Instead of paying for volume and expensive procedures for very sick people, it rewards value – that is the highest quality at the lowest costs – through things in primary care’s wheelhouse: prevention, wellness, care coordination, complex patient management, and medical home care transition management.
In fact, CMS has recognized this by making primary care subspecialties the only ones required to be in the Medicare ACO program and the Medicare Shared Savings Program (MSSP), and recently with its ACO Investment Model, which prioritized ACO advanced infrastructure payments to physician- or small hospital-led ACOs in rural areas.
There are more physician-owned ACOs today than any other kind. If you are part of another type of ACO, such as one driven by a health system or multispecialty practice, don’t despair. They can work, too. But you need to step up and make sure they do.
The price of passivity
MACRA’s shifting of the annual flow of $3 trillion from rewarding volume to rewarding value will, in this author’s estimation, have MACRA easily eclipse the Affordable Care Act in significance. Indecision will not stop your placement in the value-based payment system. Why not control your destiny to achieve your professional and financial goals as leaders of health care? Through indecision, you will be both unprepared and defaulted into the quality and efficiency compensation measurements of MIPS.
MACRA has changed everything. You’ve been asked to lead American health care and get paid to do it. This is not a hard question. Please feel free to contact me directly with questions or comments on how to prepare.
Mr. Bobbitt is a head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
ACO Insider: Avoid the ‘default future’
As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”
This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.
But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.
This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.
Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.
A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.
As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”
You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.
It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”
But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.
Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.
The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.
Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.
In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”
This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.
But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.
This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.
Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.
A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.
As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”
You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.
It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”
But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.
Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.
The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.
Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.
In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”
This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.
But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.
This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.
Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.
A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.
As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”
You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.
It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”
But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.
Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.
The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.
Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.
In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
The tipping point for value-based pay?
Over the last several years, doctors and other health care professionals – no doubt including many readers of this column – have worked to develop the accountable care organization model from an academic idea into a meaningful presence in the health care marketplace.
In January, the federal government threw its considerable weight squarely behind that effort, for the first time setting clear goals for ramping up the use of ACOs and other alternative payment models in Medicare.
In an editorial in the New England Journal of Medicine, Department of Health and Human Services Secretary Sylvia M. Burwell announced that by the end of 2016, her agency plans to have 30% of all Medicare payments “tied to quality through alternative payment models,” including ACOs, patient-centered medical homes, and bundled payments – and to have 50% of Medicare payments made under alternative payment models by the end of 2018.
Furthermore, even among the payments that remain under the fee-for-service model, the vast majority will be linked to quality and value in some way – 85% by 2016, and 90% by 2018.
Right now, only about 20% of Medicare payments are made through alternative payment models, meaning that HHS’ new goals entail a 50% increase in the quantity of Medicare dollars going to alternative payment models by the end of next year, and a 150% increase by the end of 2018. In 2014, Medicare made $362 billion in fee-for-service payments – a huge number, much of which increasingly will be directed toward ACOs.
“We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement,” Secretary Burwell said in a press release accompanying the announcement.
“Ultimately, this is about improving the health of each person by making the best use of our resources for patient good,” Dr. Douglas E. Henley, CEO of the American Academy of Family Physicians, noted in the same press release. “We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health.”
Of course, setting ambitious goals is not the same thing as meeting them, and many details have yet to be ironed out. Will the administration focus on ACOs or on other alternative payment models such as bundled payments? How will it measure quality? And Medicare, though massive, is only one part of the health industry. To what extent will the rest of the industry join in the federal government’s push toward accountable care?
To help answer these questions, HHS also announced that it is creating the Health Care Payment Learning and Action Network, which “will accelerate the transition to more advanced payment models by fostering collaboration between HHS, private payers, large employers, providers, consumers, and state and federal partners.”
January’s announcement is the strongest signal yet that the federal government has bought into the idea of paying for value, not volume, and that it is willing to invest substantially in the emerging accountable care model.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. Mr. Wilson is an associate at Smith Anderson. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the authors at [email protected] or [email protected], or by phone at 919-821-6612.
Over the last several years, doctors and other health care professionals – no doubt including many readers of this column – have worked to develop the accountable care organization model from an academic idea into a meaningful presence in the health care marketplace.
In January, the federal government threw its considerable weight squarely behind that effort, for the first time setting clear goals for ramping up the use of ACOs and other alternative payment models in Medicare.
In an editorial in the New England Journal of Medicine, Department of Health and Human Services Secretary Sylvia M. Burwell announced that by the end of 2016, her agency plans to have 30% of all Medicare payments “tied to quality through alternative payment models,” including ACOs, patient-centered medical homes, and bundled payments – and to have 50% of Medicare payments made under alternative payment models by the end of 2018.
Furthermore, even among the payments that remain under the fee-for-service model, the vast majority will be linked to quality and value in some way – 85% by 2016, and 90% by 2018.
Right now, only about 20% of Medicare payments are made through alternative payment models, meaning that HHS’ new goals entail a 50% increase in the quantity of Medicare dollars going to alternative payment models by the end of next year, and a 150% increase by the end of 2018. In 2014, Medicare made $362 billion in fee-for-service payments – a huge number, much of which increasingly will be directed toward ACOs.
“We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement,” Secretary Burwell said in a press release accompanying the announcement.
“Ultimately, this is about improving the health of each person by making the best use of our resources for patient good,” Dr. Douglas E. Henley, CEO of the American Academy of Family Physicians, noted in the same press release. “We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health.”
Of course, setting ambitious goals is not the same thing as meeting them, and many details have yet to be ironed out. Will the administration focus on ACOs or on other alternative payment models such as bundled payments? How will it measure quality? And Medicare, though massive, is only one part of the health industry. To what extent will the rest of the industry join in the federal government’s push toward accountable care?
To help answer these questions, HHS also announced that it is creating the Health Care Payment Learning and Action Network, which “will accelerate the transition to more advanced payment models by fostering collaboration between HHS, private payers, large employers, providers, consumers, and state and federal partners.”
January’s announcement is the strongest signal yet that the federal government has bought into the idea of paying for value, not volume, and that it is willing to invest substantially in the emerging accountable care model.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. Mr. Wilson is an associate at Smith Anderson. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the authors at [email protected] or [email protected], or by phone at 919-821-6612.
Over the last several years, doctors and other health care professionals – no doubt including many readers of this column – have worked to develop the accountable care organization model from an academic idea into a meaningful presence in the health care marketplace.
In January, the federal government threw its considerable weight squarely behind that effort, for the first time setting clear goals for ramping up the use of ACOs and other alternative payment models in Medicare.
In an editorial in the New England Journal of Medicine, Department of Health and Human Services Secretary Sylvia M. Burwell announced that by the end of 2016, her agency plans to have 30% of all Medicare payments “tied to quality through alternative payment models,” including ACOs, patient-centered medical homes, and bundled payments – and to have 50% of Medicare payments made under alternative payment models by the end of 2018.
Furthermore, even among the payments that remain under the fee-for-service model, the vast majority will be linked to quality and value in some way – 85% by 2016, and 90% by 2018.
Right now, only about 20% of Medicare payments are made through alternative payment models, meaning that HHS’ new goals entail a 50% increase in the quantity of Medicare dollars going to alternative payment models by the end of next year, and a 150% increase by the end of 2018. In 2014, Medicare made $362 billion in fee-for-service payments – a huge number, much of which increasingly will be directed toward ACOs.
“We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement,” Secretary Burwell said in a press release accompanying the announcement.
“Ultimately, this is about improving the health of each person by making the best use of our resources for patient good,” Dr. Douglas E. Henley, CEO of the American Academy of Family Physicians, noted in the same press release. “We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health.”
Of course, setting ambitious goals is not the same thing as meeting them, and many details have yet to be ironed out. Will the administration focus on ACOs or on other alternative payment models such as bundled payments? How will it measure quality? And Medicare, though massive, is only one part of the health industry. To what extent will the rest of the industry join in the federal government’s push toward accountable care?
To help answer these questions, HHS also announced that it is creating the Health Care Payment Learning and Action Network, which “will accelerate the transition to more advanced payment models by fostering collaboration between HHS, private payers, large employers, providers, consumers, and state and federal partners.”
January’s announcement is the strongest signal yet that the federal government has bought into the idea of paying for value, not volume, and that it is willing to invest substantially in the emerging accountable care model.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. Mr. Wilson is an associate at Smith Anderson. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the authors at [email protected] or [email protected], or by phone at 919-821-6612.
You can’t get there from here
Readers of this column may recall that we have been following the fate of a small 14 primary care physician–owned accountable care organization bordering the Rio Grande River in Texas, the Rio Grande Valley Health Alliance. These physicians in 12 practices started with no infrastructure, no common electronic health records, or capital, and nonetheless took the plunge to become a Medicare Shared Savings Program accountable care organization beginning Jan. 1, 2013. It is time for an update on them.
Admittedly, I have been dragging my feet about an update, not because the results were poor, but because they were so great. With barely the minimum 5,000 beneficiaries, they saved more than $6 million in their first year. They are in the no-downside-risk plan, and thus got 50% of those savings. They have had time in 2014 to crunch the data even more to identify the 10% of patients driving more than 50% of costs and begin implementing complex high-risk patient management. For these reasons, I wager that they will do even better in 2014 through increased efficiencies.
How about quality? In the first year in the Medicare Shared Savings Program (MSSP), an ACO need only show the ability to report; they are not graded on their quality performance. But the Rio Grande Valley Health Alliance kept track internally, and the ACO regularly appears to be hitting the 90th percentile on the bulk of the 33 quality metrics. Their model tracked the elements for success outlined in previous columns.
So, why have I been I hesitant to report this?
Well, so many of you readers have called or written me to say that, while this type of physician-driven community or rural ACO with a primary care core makes sense, there is no way that you can get the money to organize and build the infrastructure necessary to succeed like RGVHA has. You would have to create a legal entity and apply to a program such as the MSSP, create infrastructure, track savings over a calendar year, then wait 6 or 8 months to get the results and the shared savings payment.
In sum, it’s a great idea. You are in the best position to drive high-value health improvement. You are located where the historic lack of access and medical infrastructure has resulted in high avoidable costs.
But the cruel irony is that, thanks to the fee-for-service system, those in the best position to drive value – primary care physicians – are in the worst position to front the necessary capital costs.
RGVHA was able to go forward because they were eligible for the now-gone Advance Payment Model program that advanced them the necessary operational costs. Their exciting success would ring hollow as a message to you if you couldn’t get this type of developmental financial support. Deferred shared savings and improved quality for your Medicare patients is a great concept – but this is a proverbial “you can’t get there from here” dilemma.
The CMS ACO investment model
The Centers for Medicare and Medicaid Services also saw this disconnect. So, CMS announced a new upfront infrastructure support program specifically to promote new small nonhospital* or managed care ACOs, rural ACOs, ACOs where there is low ACO penetration, and existing ACOs wanting to move toward taking financial risk. This prepaid shared savings builds on the Advance Payment Model program.
ACOs that plan to apply for the program in the next cycle and start in 2016 must have a preliminary prospective beneficiary assignment of 10,000 or less. CMS will give preference to new ACOs in rural or low-penetration areas, or in areas with exceptional need, or to ACOs with compelling proposals on how they would invest their funds and the CMS funds.
Each dollar given by CMS is a prepayment against the ACO’s shared savings distribution. If there are not enough shared savings, there is no further repayment obligation unless the ACO leaves the program before the 3-year program period.
Applications will be accepted during the summer of 2015, which is roughly the same time as the MSSP application period.
In my mind, this is the single best investment in improving health delivery and reining in runaway health care costs that CMS could have made. It will empower those in the best position to generate the highest quality at the lowest cost: readers like you.
This could be a game changer for primary care and rural care. But it won’t happen without physician leaders like those at RGVHA. The summer of 2015 seems a long way off, but the time to begin preparing your fully financed ACO is now!
* Exceptions to the nonhospital condition exist for critical access hospitals or inpatient prospective payment hospitals with 100 or fewer beds.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Readers of this column may recall that we have been following the fate of a small 14 primary care physician–owned accountable care organization bordering the Rio Grande River in Texas, the Rio Grande Valley Health Alliance. These physicians in 12 practices started with no infrastructure, no common electronic health records, or capital, and nonetheless took the plunge to become a Medicare Shared Savings Program accountable care organization beginning Jan. 1, 2013. It is time for an update on them.
Admittedly, I have been dragging my feet about an update, not because the results were poor, but because they were so great. With barely the minimum 5,000 beneficiaries, they saved more than $6 million in their first year. They are in the no-downside-risk plan, and thus got 50% of those savings. They have had time in 2014 to crunch the data even more to identify the 10% of patients driving more than 50% of costs and begin implementing complex high-risk patient management. For these reasons, I wager that they will do even better in 2014 through increased efficiencies.
How about quality? In the first year in the Medicare Shared Savings Program (MSSP), an ACO need only show the ability to report; they are not graded on their quality performance. But the Rio Grande Valley Health Alliance kept track internally, and the ACO regularly appears to be hitting the 90th percentile on the bulk of the 33 quality metrics. Their model tracked the elements for success outlined in previous columns.
So, why have I been I hesitant to report this?
Well, so many of you readers have called or written me to say that, while this type of physician-driven community or rural ACO with a primary care core makes sense, there is no way that you can get the money to organize and build the infrastructure necessary to succeed like RGVHA has. You would have to create a legal entity and apply to a program such as the MSSP, create infrastructure, track savings over a calendar year, then wait 6 or 8 months to get the results and the shared savings payment.
In sum, it’s a great idea. You are in the best position to drive high-value health improvement. You are located where the historic lack of access and medical infrastructure has resulted in high avoidable costs.
But the cruel irony is that, thanks to the fee-for-service system, those in the best position to drive value – primary care physicians – are in the worst position to front the necessary capital costs.
RGVHA was able to go forward because they were eligible for the now-gone Advance Payment Model program that advanced them the necessary operational costs. Their exciting success would ring hollow as a message to you if you couldn’t get this type of developmental financial support. Deferred shared savings and improved quality for your Medicare patients is a great concept – but this is a proverbial “you can’t get there from here” dilemma.
The CMS ACO investment model
The Centers for Medicare and Medicaid Services also saw this disconnect. So, CMS announced a new upfront infrastructure support program specifically to promote new small nonhospital* or managed care ACOs, rural ACOs, ACOs where there is low ACO penetration, and existing ACOs wanting to move toward taking financial risk. This prepaid shared savings builds on the Advance Payment Model program.
ACOs that plan to apply for the program in the next cycle and start in 2016 must have a preliminary prospective beneficiary assignment of 10,000 or less. CMS will give preference to new ACOs in rural or low-penetration areas, or in areas with exceptional need, or to ACOs with compelling proposals on how they would invest their funds and the CMS funds.
Each dollar given by CMS is a prepayment against the ACO’s shared savings distribution. If there are not enough shared savings, there is no further repayment obligation unless the ACO leaves the program before the 3-year program period.
Applications will be accepted during the summer of 2015, which is roughly the same time as the MSSP application period.
In my mind, this is the single best investment in improving health delivery and reining in runaway health care costs that CMS could have made. It will empower those in the best position to generate the highest quality at the lowest cost: readers like you.
This could be a game changer for primary care and rural care. But it won’t happen without physician leaders like those at RGVHA. The summer of 2015 seems a long way off, but the time to begin preparing your fully financed ACO is now!
* Exceptions to the nonhospital condition exist for critical access hospitals or inpatient prospective payment hospitals with 100 or fewer beds.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Readers of this column may recall that we have been following the fate of a small 14 primary care physician–owned accountable care organization bordering the Rio Grande River in Texas, the Rio Grande Valley Health Alliance. These physicians in 12 practices started with no infrastructure, no common electronic health records, or capital, and nonetheless took the plunge to become a Medicare Shared Savings Program accountable care organization beginning Jan. 1, 2013. It is time for an update on them.
Admittedly, I have been dragging my feet about an update, not because the results were poor, but because they were so great. With barely the minimum 5,000 beneficiaries, they saved more than $6 million in their first year. They are in the no-downside-risk plan, and thus got 50% of those savings. They have had time in 2014 to crunch the data even more to identify the 10% of patients driving more than 50% of costs and begin implementing complex high-risk patient management. For these reasons, I wager that they will do even better in 2014 through increased efficiencies.
How about quality? In the first year in the Medicare Shared Savings Program (MSSP), an ACO need only show the ability to report; they are not graded on their quality performance. But the Rio Grande Valley Health Alliance kept track internally, and the ACO regularly appears to be hitting the 90th percentile on the bulk of the 33 quality metrics. Their model tracked the elements for success outlined in previous columns.
So, why have I been I hesitant to report this?
Well, so many of you readers have called or written me to say that, while this type of physician-driven community or rural ACO with a primary care core makes sense, there is no way that you can get the money to organize and build the infrastructure necessary to succeed like RGVHA has. You would have to create a legal entity and apply to a program such as the MSSP, create infrastructure, track savings over a calendar year, then wait 6 or 8 months to get the results and the shared savings payment.
In sum, it’s a great idea. You are in the best position to drive high-value health improvement. You are located where the historic lack of access and medical infrastructure has resulted in high avoidable costs.
But the cruel irony is that, thanks to the fee-for-service system, those in the best position to drive value – primary care physicians – are in the worst position to front the necessary capital costs.
RGVHA was able to go forward because they were eligible for the now-gone Advance Payment Model program that advanced them the necessary operational costs. Their exciting success would ring hollow as a message to you if you couldn’t get this type of developmental financial support. Deferred shared savings and improved quality for your Medicare patients is a great concept – but this is a proverbial “you can’t get there from here” dilemma.
The CMS ACO investment model
The Centers for Medicare and Medicaid Services also saw this disconnect. So, CMS announced a new upfront infrastructure support program specifically to promote new small nonhospital* or managed care ACOs, rural ACOs, ACOs where there is low ACO penetration, and existing ACOs wanting to move toward taking financial risk. This prepaid shared savings builds on the Advance Payment Model program.
ACOs that plan to apply for the program in the next cycle and start in 2016 must have a preliminary prospective beneficiary assignment of 10,000 or less. CMS will give preference to new ACOs in rural or low-penetration areas, or in areas with exceptional need, or to ACOs with compelling proposals on how they would invest their funds and the CMS funds.
Each dollar given by CMS is a prepayment against the ACO’s shared savings distribution. If there are not enough shared savings, there is no further repayment obligation unless the ACO leaves the program before the 3-year program period.
Applications will be accepted during the summer of 2015, which is roughly the same time as the MSSP application period.
In my mind, this is the single best investment in improving health delivery and reining in runaway health care costs that CMS could have made. It will empower those in the best position to generate the highest quality at the lowest cost: readers like you.
This could be a game changer for primary care and rural care. But it won’t happen without physician leaders like those at RGVHA. The summer of 2015 seems a long way off, but the time to begin preparing your fully financed ACO is now!
* Exceptions to the nonhospital condition exist for critical access hospitals or inpatient prospective payment hospitals with 100 or fewer beds.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Hospital employment or physician-led ACO?
Primary care physicians around the country are facing the largest decision of their lives: Do I stay independent and maybe form an accountable care organization with other independent physicians, or do I become an employee of a hospital or health system?
As accountable care is taking hold, new data may alter historic thinking on this "bet-the-practice" question.
Tired of being overworked, undersatisfied, and overwhelmed with growing regulatory requirements, many primary care physicians have sought the security and strength of hospital employment. They say the pressures to invest in technology, billing, coding, and continued reimbursement pressures are just too great.
Yet, the majority of these physicians miss their days of self-employed autonomy, are on average less productive, and worry that the clocks on their compensation guarantees are ticking down.
Most of the moves by your colleagues, and perhaps you, to hospital employment have been defensive. It was just no longer feasible to stay afloat in the current fee-for-service system. You cannot work any harder, faster, or cheaper. You can no longer spend satisfactory time with your patients.
On the other hand, some of you may have joined a hospital or health system to be proactive and gain a solid platform to prepare for the new value-based payment era.
You may have envisioned being integrated with a critical mass of like-minded physicians and facilities, aided by advanced population management tools and a strong balance sheet, and all linked together on the hospital’s health information technology platform. You read that primary care should be in a leadership position and financially incentivized in any accountable care organization – including a hospital’s. Independent physicians could theoretically form ACOs, too, but lack the up-front capital, know-how, and any spare intellectual bandwidth to do so.
So, from a strategic perspective, becoming employed with other physicians by a health system seemed the way to go.
The pace has quickened of health care’s movement away from fee for service or "pay for volume" to payment for better outcomes at lower overall costs, or "pay for value." The factors that applied to the decision to become employed in the fee-for-service era may be yielding to those in the accountable care era sooner than anticipated.
Independent physician-led ACOs appear to be adapting better than hospitals to this change. Although much better prepared fiscally, hospitals are conflicted, or at least hesitant, to make this switch, because much of the savings comes from avoidable admissions and readmissions. On the other hand, emerging data and experience are showing that physician-led ACOs can be very successful.
There are some very integrated and successful hospital-led ACOs or other value-delivery hospital/physician models. In fact, I believe that if the hospital is willing to right-size and truly commit to value, it can be the most successful model.
However, many physicians signed volume-only physician work relative value unit (wRVU) compensation formulas in their hospital employment agreements, with no incentive payments for value. They have not been involved as partners, much less leaders, in any ACO planning. Even though the fee-for-service days are waning and strains are showing for many hospitals that are not adapting, for many employed physicians, the pace of preparedness for the accountable care era has been disappointing.
New data show that while most of the early ACOs in the Medicare Shared Savings Program were hospital led, there are now more physician-led ACOs than any other. At the same time, early results of some modest primary care–only ACOs have been exciting. The rural primary care physician ACO previously reported on in this column, Rio Grande Valley Health Alliance in McAllen, Tex., is preliminarily looking at 90th-percentile quality results and more than $500,000 in (unofficial) savings per physician in their first year under the Medicare Shared Savings Program.
In fact, in a May 14, 2014, article in JAMA, its authors stated: "Even though most adult primary care physicians may not realize it, they each can be seen as a chief executive officer (CEO) in charge of approximately $10 million in annual revenue" (JAMA 2014;311:1855-6). They noted that primary care receives only 5% of that spending, but can control much of the average of $5,000 in annual spending of their 2,000 or so patients. The independent physician-led Palm Beach ACO is cited as an example, with $22 million in savings their first year. The authors recommend physician-led ACOs as the best way to leverage that "CEO" power.
These new success lessons are being learned and need to be shared. Primary care physicians need to understand that the risk of change is now much less than the risk of maintaining the status quo. You need transparency regarding the realities of all your choices, including hospital employment and physician ACOs.
As readers of this column know, I heartily endorse the trend recognized in the JAMA article: "[A]n increasing number of primary care physicians see physician-led ACOs as a powerful opportunity to retain their autonomy and make a positive difference for their patient – as well as their practices’ bottom lines."
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Primary care physicians around the country are facing the largest decision of their lives: Do I stay independent and maybe form an accountable care organization with other independent physicians, or do I become an employee of a hospital or health system?
As accountable care is taking hold, new data may alter historic thinking on this "bet-the-practice" question.
Tired of being overworked, undersatisfied, and overwhelmed with growing regulatory requirements, many primary care physicians have sought the security and strength of hospital employment. They say the pressures to invest in technology, billing, coding, and continued reimbursement pressures are just too great.
Yet, the majority of these physicians miss their days of self-employed autonomy, are on average less productive, and worry that the clocks on their compensation guarantees are ticking down.
Most of the moves by your colleagues, and perhaps you, to hospital employment have been defensive. It was just no longer feasible to stay afloat in the current fee-for-service system. You cannot work any harder, faster, or cheaper. You can no longer spend satisfactory time with your patients.
On the other hand, some of you may have joined a hospital or health system to be proactive and gain a solid platform to prepare for the new value-based payment era.
You may have envisioned being integrated with a critical mass of like-minded physicians and facilities, aided by advanced population management tools and a strong balance sheet, and all linked together on the hospital’s health information technology platform. You read that primary care should be in a leadership position and financially incentivized in any accountable care organization – including a hospital’s. Independent physicians could theoretically form ACOs, too, but lack the up-front capital, know-how, and any spare intellectual bandwidth to do so.
So, from a strategic perspective, becoming employed with other physicians by a health system seemed the way to go.
The pace has quickened of health care’s movement away from fee for service or "pay for volume" to payment for better outcomes at lower overall costs, or "pay for value." The factors that applied to the decision to become employed in the fee-for-service era may be yielding to those in the accountable care era sooner than anticipated.
Independent physician-led ACOs appear to be adapting better than hospitals to this change. Although much better prepared fiscally, hospitals are conflicted, or at least hesitant, to make this switch, because much of the savings comes from avoidable admissions and readmissions. On the other hand, emerging data and experience are showing that physician-led ACOs can be very successful.
There are some very integrated and successful hospital-led ACOs or other value-delivery hospital/physician models. In fact, I believe that if the hospital is willing to right-size and truly commit to value, it can be the most successful model.
However, many physicians signed volume-only physician work relative value unit (wRVU) compensation formulas in their hospital employment agreements, with no incentive payments for value. They have not been involved as partners, much less leaders, in any ACO planning. Even though the fee-for-service days are waning and strains are showing for many hospitals that are not adapting, for many employed physicians, the pace of preparedness for the accountable care era has been disappointing.
New data show that while most of the early ACOs in the Medicare Shared Savings Program were hospital led, there are now more physician-led ACOs than any other. At the same time, early results of some modest primary care–only ACOs have been exciting. The rural primary care physician ACO previously reported on in this column, Rio Grande Valley Health Alliance in McAllen, Tex., is preliminarily looking at 90th-percentile quality results and more than $500,000 in (unofficial) savings per physician in their first year under the Medicare Shared Savings Program.
In fact, in a May 14, 2014, article in JAMA, its authors stated: "Even though most adult primary care physicians may not realize it, they each can be seen as a chief executive officer (CEO) in charge of approximately $10 million in annual revenue" (JAMA 2014;311:1855-6). They noted that primary care receives only 5% of that spending, but can control much of the average of $5,000 in annual spending of their 2,000 or so patients. The independent physician-led Palm Beach ACO is cited as an example, with $22 million in savings their first year. The authors recommend physician-led ACOs as the best way to leverage that "CEO" power.
These new success lessons are being learned and need to be shared. Primary care physicians need to understand that the risk of change is now much less than the risk of maintaining the status quo. You need transparency regarding the realities of all your choices, including hospital employment and physician ACOs.
As readers of this column know, I heartily endorse the trend recognized in the JAMA article: "[A]n increasing number of primary care physicians see physician-led ACOs as a powerful opportunity to retain their autonomy and make a positive difference for their patient – as well as their practices’ bottom lines."
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Primary care physicians around the country are facing the largest decision of their lives: Do I stay independent and maybe form an accountable care organization with other independent physicians, or do I become an employee of a hospital or health system?
As accountable care is taking hold, new data may alter historic thinking on this "bet-the-practice" question.
Tired of being overworked, undersatisfied, and overwhelmed with growing regulatory requirements, many primary care physicians have sought the security and strength of hospital employment. They say the pressures to invest in technology, billing, coding, and continued reimbursement pressures are just too great.
Yet, the majority of these physicians miss their days of self-employed autonomy, are on average less productive, and worry that the clocks on their compensation guarantees are ticking down.
Most of the moves by your colleagues, and perhaps you, to hospital employment have been defensive. It was just no longer feasible to stay afloat in the current fee-for-service system. You cannot work any harder, faster, or cheaper. You can no longer spend satisfactory time with your patients.
On the other hand, some of you may have joined a hospital or health system to be proactive and gain a solid platform to prepare for the new value-based payment era.
You may have envisioned being integrated with a critical mass of like-minded physicians and facilities, aided by advanced population management tools and a strong balance sheet, and all linked together on the hospital’s health information technology platform. You read that primary care should be in a leadership position and financially incentivized in any accountable care organization – including a hospital’s. Independent physicians could theoretically form ACOs, too, but lack the up-front capital, know-how, and any spare intellectual bandwidth to do so.
So, from a strategic perspective, becoming employed with other physicians by a health system seemed the way to go.
The pace has quickened of health care’s movement away from fee for service or "pay for volume" to payment for better outcomes at lower overall costs, or "pay for value." The factors that applied to the decision to become employed in the fee-for-service era may be yielding to those in the accountable care era sooner than anticipated.
Independent physician-led ACOs appear to be adapting better than hospitals to this change. Although much better prepared fiscally, hospitals are conflicted, or at least hesitant, to make this switch, because much of the savings comes from avoidable admissions and readmissions. On the other hand, emerging data and experience are showing that physician-led ACOs can be very successful.
There are some very integrated and successful hospital-led ACOs or other value-delivery hospital/physician models. In fact, I believe that if the hospital is willing to right-size and truly commit to value, it can be the most successful model.
However, many physicians signed volume-only physician work relative value unit (wRVU) compensation formulas in their hospital employment agreements, with no incentive payments for value. They have not been involved as partners, much less leaders, in any ACO planning. Even though the fee-for-service days are waning and strains are showing for many hospitals that are not adapting, for many employed physicians, the pace of preparedness for the accountable care era has been disappointing.
New data show that while most of the early ACOs in the Medicare Shared Savings Program were hospital led, there are now more physician-led ACOs than any other. At the same time, early results of some modest primary care–only ACOs have been exciting. The rural primary care physician ACO previously reported on in this column, Rio Grande Valley Health Alliance in McAllen, Tex., is preliminarily looking at 90th-percentile quality results and more than $500,000 in (unofficial) savings per physician in their first year under the Medicare Shared Savings Program.
In fact, in a May 14, 2014, article in JAMA, its authors stated: "Even though most adult primary care physicians may not realize it, they each can be seen as a chief executive officer (CEO) in charge of approximately $10 million in annual revenue" (JAMA 2014;311:1855-6). They noted that primary care receives only 5% of that spending, but can control much of the average of $5,000 in annual spending of their 2,000 or so patients. The independent physician-led Palm Beach ACO is cited as an example, with $22 million in savings their first year. The authors recommend physician-led ACOs as the best way to leverage that "CEO" power.
These new success lessons are being learned and need to be shared. Primary care physicians need to understand that the risk of change is now much less than the risk of maintaining the status quo. You need transparency regarding the realities of all your choices, including hospital employment and physician ACOs.
As readers of this column know, I heartily endorse the trend recognized in the JAMA article: "[A]n increasing number of primary care physicians see physician-led ACOs as a powerful opportunity to retain their autonomy and make a positive difference for their patient – as well as their practices’ bottom lines."
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.
Anatomy of an independent primary care ACO, part 2
In our last column, we highlighted the Rio Grande Valley Health Alliance, an accountable care organization in McAllen, Tex., composed of 14 independent primary care physicians in 11 practices. As primary care physicians, the RGVHA providers realized the potential for a primary care ACO to generate savings from value-based care.
Because RGVHA is a network model ACO – the physicians stay in their separate independent practices but participate in the ACO through contracts – RGVHA needed a way to manage the ACO data collection, sorting, and reporting requirements in an efficient and effective manner.
Fortunately, Dr. Gretchen Hoyle of MD Online Solutions was able to tailor a data management solution for RGVHA. In addition, Dr. Hoyle helps interpret the data and leads a weekly data-driven staff conference call with the ACO’s nurse care coordinators.
Through Dr. Hoyle’s data collection and interpretation work with RGVHA, the ACO now has concrete data showing utilization trends and patterns. The most positive result has been the demonstrated benefit of nurse care coordinators, who work with patients in the post–acute care settings between their office visits.
In fact, care coordinators have proved to be RGVHA’s secret weapon, because their work has been invaluable in managing patients with chronic conditions between provider appointments.
Conversely, the data have revealed a pattern of overuse of home health care services, which helps contribute to higher care costs overall, making home health the biggest disappointment.
The secret weapon
As Dr. Hoyle so aptly said, "To become a fully functioning ACO, an organization must be able to address both sides of the ACO ‘coin’: quality improvement and cost control." Care coordinators have the capacity to address both concerns.
Within RGVHA, care coordinators have performed chart reviews that identify the ACO’s current performance according to the Centers for Medicare and Medicaid Services’ quality standards. This is the first secret weapon for a small primary care ACO.
This data collection helps RGVHA fill in knowledge gaps as it works toward having a fully integrated electronic health records system. In turn, it helps the care coordinators identify the strengths and weaknesses of each of the participating ACO providers. This ensures that weaknesses can be addressed in a timely fashion. In addition, the chart reviews help identify documentation issues. Documentation is critical to meeting CMS benchmarks, which ultimately helps determine the amount of shared savings for an ACO.
In addition, the data have proved crucial to being able to rank patients by cost. That has allowed RGVHA to identify the top 10% of patients whose care accounts for 50% of the total care costs in the ACO. This information allows providers to understand which patients and types of patients are more expensive, and who can benefit most from intense care coordination and/or longer visits with RGVHA’s primary care doctors.
Claims data show that even a small amount of additional time and care coordination outside of the clinic setting curbs utilization for the most complex patients and saves money. Most important, care coordinators help providers focus their time and energy where it can have the most impact.
The biggest disappointment
Shortly after RGVHA began reviewing patient claims data, home health care costs per patient emerged as one of the greatest cost outliers. The data revealed that providers outside of the ACO were prescribing home health at much higher rates than providers within the ACO. A subsequent gap analysis showed that home health was a prime opportunity target for RGVHA.
As RGVHA developed a strategy to address the overutilization and extremely high home health costs for their patient population, the providers faced their biggest disappointment to date: The Medicare Shared Savings Program regulations only permit ACOs to "ask" that providers outside the ACO coordinate patient care with doctors inside the ACO, not "tell" the providers that they must collaborate in delivering evidence-based, high-value care.
So, RGVHA decided to use those data as the starting point to reach out to those providers.
Dr. Hoyle helped RGVHA identify the amount of home health care generated by each specific agency and ordering physician. That information was used to craft a targeted letter to each provider outside the ACO requesting and encouraging their collaboration and cooperation in the development of a care plan for each home health patient.
Now, several months later, home health care overutilization and costs are beginning to decline, as patient care is monitored by RGVHA and appropriately coordinated among each ACO patient’s team of care providers.
RGVHA’s biggest concern has now become one of its biggest assets. The ACO doctors finally feel empowered in their ability to impact the quality and costs of patient care. Furthermore, they are excited they are getting paid for doing what they are trained to do: provide high-value care to their patients.
The good news is that, when properly informed and invited to help shape high-value patient care, providers want to and will do the right thing.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. Mr. Bobbitt is grateful for the excellent lead research and drafting of this article by Ms. Poe. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or at 919-821-6612.
In our last column, we highlighted the Rio Grande Valley Health Alliance, an accountable care organization in McAllen, Tex., composed of 14 independent primary care physicians in 11 practices. As primary care physicians, the RGVHA providers realized the potential for a primary care ACO to generate savings from value-based care.
Because RGVHA is a network model ACO – the physicians stay in their separate independent practices but participate in the ACO through contracts – RGVHA needed a way to manage the ACO data collection, sorting, and reporting requirements in an efficient and effective manner.
Fortunately, Dr. Gretchen Hoyle of MD Online Solutions was able to tailor a data management solution for RGVHA. In addition, Dr. Hoyle helps interpret the data and leads a weekly data-driven staff conference call with the ACO’s nurse care coordinators.
Through Dr. Hoyle’s data collection and interpretation work with RGVHA, the ACO now has concrete data showing utilization trends and patterns. The most positive result has been the demonstrated benefit of nurse care coordinators, who work with patients in the post–acute care settings between their office visits.
In fact, care coordinators have proved to be RGVHA’s secret weapon, because their work has been invaluable in managing patients with chronic conditions between provider appointments.
Conversely, the data have revealed a pattern of overuse of home health care services, which helps contribute to higher care costs overall, making home health the biggest disappointment.
The secret weapon
As Dr. Hoyle so aptly said, "To become a fully functioning ACO, an organization must be able to address both sides of the ACO ‘coin’: quality improvement and cost control." Care coordinators have the capacity to address both concerns.
Within RGVHA, care coordinators have performed chart reviews that identify the ACO’s current performance according to the Centers for Medicare and Medicaid Services’ quality standards. This is the first secret weapon for a small primary care ACO.
This data collection helps RGVHA fill in knowledge gaps as it works toward having a fully integrated electronic health records system. In turn, it helps the care coordinators identify the strengths and weaknesses of each of the participating ACO providers. This ensures that weaknesses can be addressed in a timely fashion. In addition, the chart reviews help identify documentation issues. Documentation is critical to meeting CMS benchmarks, which ultimately helps determine the amount of shared savings for an ACO.
In addition, the data have proved crucial to being able to rank patients by cost. That has allowed RGVHA to identify the top 10% of patients whose care accounts for 50% of the total care costs in the ACO. This information allows providers to understand which patients and types of patients are more expensive, and who can benefit most from intense care coordination and/or longer visits with RGVHA’s primary care doctors.
Claims data show that even a small amount of additional time and care coordination outside of the clinic setting curbs utilization for the most complex patients and saves money. Most important, care coordinators help providers focus their time and energy where it can have the most impact.
The biggest disappointment
Shortly after RGVHA began reviewing patient claims data, home health care costs per patient emerged as one of the greatest cost outliers. The data revealed that providers outside of the ACO were prescribing home health at much higher rates than providers within the ACO. A subsequent gap analysis showed that home health was a prime opportunity target for RGVHA.
As RGVHA developed a strategy to address the overutilization and extremely high home health costs for their patient population, the providers faced their biggest disappointment to date: The Medicare Shared Savings Program regulations only permit ACOs to "ask" that providers outside the ACO coordinate patient care with doctors inside the ACO, not "tell" the providers that they must collaborate in delivering evidence-based, high-value care.
So, RGVHA decided to use those data as the starting point to reach out to those providers.
Dr. Hoyle helped RGVHA identify the amount of home health care generated by each specific agency and ordering physician. That information was used to craft a targeted letter to each provider outside the ACO requesting and encouraging their collaboration and cooperation in the development of a care plan for each home health patient.
Now, several months later, home health care overutilization and costs are beginning to decline, as patient care is monitored by RGVHA and appropriately coordinated among each ACO patient’s team of care providers.
RGVHA’s biggest concern has now become one of its biggest assets. The ACO doctors finally feel empowered in their ability to impact the quality and costs of patient care. Furthermore, they are excited they are getting paid for doing what they are trained to do: provide high-value care to their patients.
The good news is that, when properly informed and invited to help shape high-value patient care, providers want to and will do the right thing.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. Mr. Bobbitt is grateful for the excellent lead research and drafting of this article by Ms. Poe. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or at 919-821-6612.
In our last column, we highlighted the Rio Grande Valley Health Alliance, an accountable care organization in McAllen, Tex., composed of 14 independent primary care physicians in 11 practices. As primary care physicians, the RGVHA providers realized the potential for a primary care ACO to generate savings from value-based care.
Because RGVHA is a network model ACO – the physicians stay in their separate independent practices but participate in the ACO through contracts – RGVHA needed a way to manage the ACO data collection, sorting, and reporting requirements in an efficient and effective manner.
Fortunately, Dr. Gretchen Hoyle of MD Online Solutions was able to tailor a data management solution for RGVHA. In addition, Dr. Hoyle helps interpret the data and leads a weekly data-driven staff conference call with the ACO’s nurse care coordinators.
Through Dr. Hoyle’s data collection and interpretation work with RGVHA, the ACO now has concrete data showing utilization trends and patterns. The most positive result has been the demonstrated benefit of nurse care coordinators, who work with patients in the post–acute care settings between their office visits.
In fact, care coordinators have proved to be RGVHA’s secret weapon, because their work has been invaluable in managing patients with chronic conditions between provider appointments.
Conversely, the data have revealed a pattern of overuse of home health care services, which helps contribute to higher care costs overall, making home health the biggest disappointment.
The secret weapon
As Dr. Hoyle so aptly said, "To become a fully functioning ACO, an organization must be able to address both sides of the ACO ‘coin’: quality improvement and cost control." Care coordinators have the capacity to address both concerns.
Within RGVHA, care coordinators have performed chart reviews that identify the ACO’s current performance according to the Centers for Medicare and Medicaid Services’ quality standards. This is the first secret weapon for a small primary care ACO.
This data collection helps RGVHA fill in knowledge gaps as it works toward having a fully integrated electronic health records system. In turn, it helps the care coordinators identify the strengths and weaknesses of each of the participating ACO providers. This ensures that weaknesses can be addressed in a timely fashion. In addition, the chart reviews help identify documentation issues. Documentation is critical to meeting CMS benchmarks, which ultimately helps determine the amount of shared savings for an ACO.
In addition, the data have proved crucial to being able to rank patients by cost. That has allowed RGVHA to identify the top 10% of patients whose care accounts for 50% of the total care costs in the ACO. This information allows providers to understand which patients and types of patients are more expensive, and who can benefit most from intense care coordination and/or longer visits with RGVHA’s primary care doctors.
Claims data show that even a small amount of additional time and care coordination outside of the clinic setting curbs utilization for the most complex patients and saves money. Most important, care coordinators help providers focus their time and energy where it can have the most impact.
The biggest disappointment
Shortly after RGVHA began reviewing patient claims data, home health care costs per patient emerged as one of the greatest cost outliers. The data revealed that providers outside of the ACO were prescribing home health at much higher rates than providers within the ACO. A subsequent gap analysis showed that home health was a prime opportunity target for RGVHA.
As RGVHA developed a strategy to address the overutilization and extremely high home health costs for their patient population, the providers faced their biggest disappointment to date: The Medicare Shared Savings Program regulations only permit ACOs to "ask" that providers outside the ACO coordinate patient care with doctors inside the ACO, not "tell" the providers that they must collaborate in delivering evidence-based, high-value care.
So, RGVHA decided to use those data as the starting point to reach out to those providers.
Dr. Hoyle helped RGVHA identify the amount of home health care generated by each specific agency and ordering physician. That information was used to craft a targeted letter to each provider outside the ACO requesting and encouraging their collaboration and cooperation in the development of a care plan for each home health patient.
Now, several months later, home health care overutilization and costs are beginning to decline, as patient care is monitored by RGVHA and appropriately coordinated among each ACO patient’s team of care providers.
RGVHA’s biggest concern has now become one of its biggest assets. The ACO doctors finally feel empowered in their ability to impact the quality and costs of patient care. Furthermore, they are excited they are getting paid for doing what they are trained to do: provide high-value care to their patients.
The good news is that, when properly informed and invited to help shape high-value patient care, providers want to and will do the right thing.
Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. Mr. Bobbitt is grateful for the excellent lead research and drafting of this article by Ms. Poe. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or at 919-821-6612.
