With so much talk in health care circles focused on accountable care organizations (ACOs), what may be getting lost in the mix is the fact there is a larger trend at play moving the health care system, long term care included, toward integrated quality care and payment systems for Medicare beneficiaries, experts in the field say.
This trend to seek out new methods for curbing costs, improving quality, and coordinating or integrating care is progressing under the new health care reform law, marking a turning point for providers looking to a future much different than the present.
While post-acute care is not clearly part of the Centers for Medicare & Medicaid Services’ (CMS’) initial vision expressed in its proposed rule, every expectation is for the ACO model or something similar to it to be the way business is done in the future, says a leading provider.
“We must assume changes will be made, regardless of how ACOs evolve. The trend is toward integrated care and integrated payment. The practical reality is that Kindred will be involved with ACOs, and many and most parts of the country will see integrated care,” says Bill Altman, senior vice president of strategy and public policy for Kindred Healthcare, Louisville, Ky.
ACOs A Hot Topic
The release this spring of a draft rule on ACOs (Medicare Shared Savings Program: Accountable Care Organizations) by CMS put the spotlight on the government’s design for the ACO model, fueling an already active boomlet of webinars, conferences, and white papers on the subject. Any major change to the way Medicare operates is, of course, a potential game changer, considering the 46 million or so beneficiaries in the system and the millions more to come in the future.
The definition of what ACOs are may vary. At its core, however, they are provider collaborations that support the integration of groups of physicians, hospitals, and other providers in different ways around the opportunity to receive additional payments by achieving continually advancing patient-focused quality targets and demonstrating real reductions in overall spending growth for their defined patient population.
ACOs are a form of managed care run by medical groups, not health insurance companies. The basic premise of the CMS draft and the subsequent final rule will be to allocate monetary rewards to provider teams that must be able to prove they can deliver high-quality care at lower costs.
The deadline for making ACOs part of the Medicare system is the beginning of 2012, but for now, for long term care providers, the important thing is to see not only how their operations may fit into the ACO model, but also how other integrated health care options may be beneficial moving forward, say leading experts.
“One of the important things to understand is there are trends in the market that are accelerating even in advance of ACOs on integrated care and payment,” Altman says. “Hospitals and health systems are already looking to beef up capacity to cover the entire care continuum.”
“Assume that this trend toward integrated care and integrated payment is going to happen one way or another,” he adds.
For Nancy Rehkamp, principal at accounting and consulting firm LarsonAllen, Minneapolis, it is all about setting new expectations. “Think of health care reform as developing a new athletic department where everything is started over with new rules and new expected outcomes. ACOs are one strategy, and if it fails, there will be another to achieve the goals of better care, better health, and lower total costs,” she says.
Click
HERE for more about criticisms of the ACO proposed rule.
CMS Sets Eligibility Threshold
Under the CMS proposal, an ACO is a legal entity recognized and authorized under applicable state law, identified by a Taxpayer Identification Number, and made of eligible ACO participants. These eligible groups are ACO professionals in group practice arrangements, networks of individual practices of ACO professionals, partnerships or joint venture arrangements between hospitals and ACO professionals, and hospitals with ACO professionals.
ACO professionals include internists, family practice physicians, general practice physicians, and geriatric medicine physicians. CMS says that ACOs must also have the primary care capacity to care for at least 5,000 beneficiaries and structures in place to distribute shared savings, plus be prepared to enter into an agreement with the secretary of Health and Human Services for a three-year term.
However, ACOs can resign from the program with a 60-day notification to CMS. Those terminating before the enrollment term is up forfeit “withholds.” CMS will withhold 25 percent of any shared-savings payment owed to the ACO to recover potential future losses. CMS will pay anything remaining from the withhold amount at the end of the three-year agreement term.
As part of the application process, ACOs must demonstrate they have a beneficiary satisfaction survey in place, patient participation on the governing board, a process for evaluating the health needs of their patient population, systems in place to identify high-risk individuals, processes for individualized care plans, coordination of care mechanisms (including care coordinators on staff), and an electronic infrastructure sufficient to support such activities, according to the CMS draft.
The proposed rule also offers two ways for an ACO to participate in shared-savings initiatives. Track 1, also called the “one-sided model,” starts as a no-risk shared-savings payment system by giving ACOs a chance to get up to speed before they share financial risk. Eventually, it converts to a risk-sharing payment system in the third year. CMS will make good on shared-savings payments annually for each of the first two years an ACO participates in Track 1.
Track 2, or the “two-sided-model,” is a risk-sharing arrangement that forces an ACO to share its losses with the Medicare program from the first year of joining.
Change May Come In Many Forms
In a slide presentation she gave recently for a webinar put on by the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), Rehkamp said preparing for change in care and payment systems, be it ACOs or otherwise, was vital.
The key strategies for long term care providers include understanding existing patient care delivery patterns, developing robust predictive measurement systems for quality and costs, developing capabilities for electronic health exchange, and implementing best practices and strategies by
diagnoses.
Providers should also determine processes for patient-centered care and patient-engagement approaches and build relationships. “Decide which way to go, but right now providers need to start building relationships with doctors and hospitals because they won’t even be invited to the table otherwise,” says Rehkamp.
Most long term care providers have existing relationships and contacts with discharge planners and nursing staff at acute care facilities, but many may want to consider additional contacts at the chief executive officer level to cement business ties. “Patients [under ACOs] are still choosing wherever they want to go. You have to make sure you think of this as provider competition,” Rehkamp says.
Performance Measures Altered
Tracking performance under the reform law from which ACOs came into being is going to be much different than today’s methods, and providers need to understand the new terminology and goals to be successful.
Today’s performance follows results of minimum data set (MDS) quality indicators, Nursing Home Compare, Home Health Compare, Certification & Survey Provider Enhanced Reporting (CASPER) reports, resident satisfaction surveys, staffing ratios, employee turnover, nursing facility survey, and fee-for-service, she says.
Under ACOs, the world is changed. Performances will be judged by reduced hospital readmissions; reduced ambulatory-admissions; better resident/patient outcomes; chronic disease management; ability to manage, reduce, and know costs; elimination of health care-acquired conditions; reduced or eliminated medication errors; improved care transitions; and implementation of patient-centered care.
Financially savvy providers in the post-acute care space will have to develop capabilities and competencies to meet the ACO design, or some similar model. Some of these include being able to serve a wide a range of payers with multiple payment structures, integrate across sites of services, and coordinate care and health planning. Other competencies offer new services or lines of business, boost technology, and increase focus on patient-centered and patient-engaged care.
ACOs or not, Rehkamp sees ACO-like changes in reimbursement and care delivery resulting in a decline in the total cost of care per beneficiary by price and volume reductions. This will result in intense competition among providers and between sites of service, Rehkamp says. Providers must articulate the value of skilled nursing facilities (SNFs) in a redesigned care model by showing progress in measuring costs, assessing quality under the new paradigm, and forging partnerships and collaborations with other providers in the care continuum, she says.
Rehkamp notes that while ACOs are being debated and rolled out, there are numerous other pilot programs being readied or tested. These include the bundled payment pilot, which CMS is in the process of reviewing now and pulling together for release.
Kindred Acting Now
While ACO rules are finessed, Kindred is very interested in partnering with hospitals and managed care payers under new arrangements that may or may not lead to taking part in ACOs, Altman says. Kindred offers a full-service network of long term care and services and sees any number of these options as viable parts of an ACO or ACO-like care continuum. These range from long term acute care, sub-acute, SNFs, freestanding SNFs focused on rehabilitation, all the way to home care.
“Kindred’s strategy is to continue the ACO’s residents’ or patients’ care in a seamless way,” Altman says. “Done correctly, quality care can produce savings for Medicare and private payers.” He notes the goal to increase quality and get patients home sooner should result from the reform law’s increased attention to integrated care, sharing of medical records, and improved tracking of which care setting is best for the individual patient as they move from one facility to the next or to their home.
Altman’s initial reaction to the ACO draft rule, like many others, is that it may be difficult to achieve operationally without major changes and modifications, he says.
“The infrastructure does not exist in all parts of the country for entities to take part in ACOs,” he says. Kindred is currently involved in a variety of arrangements, with integrated care as the goal, some with managed care payers using an episodic payment model to figure out the most appropriate setting of care.
An example is in Las Vegas with a managed care company and a program for eight levels of care and eight levels of payment, “from high-end acute care hospitals to sub-acute to skilled nursing,” Altman says.
A patient may be in need of rehabilitation at a nursing facility and thus be categorized for a short stay arrangement at a post-acute care setting, instead of being kept in the acute-care hospital where costs are higher.
Kindred also has a close working relationship with the Cleveland Clinic, focused on different levels of post-acute care. Coordination is achieved by linked electronic health records, which helps to reduce re-hospitalizations. It is the goal of cutting down on costs that has brought so much focus on re-hospitalization in the reform law, providing an opportunity to coordinate care for long term care providers, according to Altman.
“Kindred is forging ahead with or without ACOs. This is how the health care system will work in the future. What we are doing today [in care integration] is preparation in the ACO framework,” he says.
The Accountable Care Act (ACA) and proposed ACO rule define the criteria for eligible ACOs, the required organizational structures, quality and other reporting requirements, fee-for-service and benchmarking, the option of payment models other than fee-for-service, and treatment of savings.
AHCA/NCAL said it is important to note that CMS is proposing an option for provider ACO eligibility that would allow for a wide variety of ACO configurations that allow for a correspondingly wide number of providers and suppliers, including post-acute care facilities.
“We’re looking at how CMS [ultimately] designs it, so it doesn’t inadvertently affect out residents one way or another,” says David Gifford, MD, AHCA senior vice president, quality and regulatory affairs.
New Quality Measures Planned
The proposed ACO rule does not include any of the SNF short-stay (Medicare-based) quality measures, but CMS plans to expand the quality measures after its first year (in 2013) through additional rulemaking, to include highly prevalent conditions and frailty. So, for the first year of the ACO program starting in six months, there are no SNF-specific measures.
“CMS plans to add measures for hospital-based care and for other settings such as home health services and nursing homes,” AHCA/NCAL said in an issue brief.
Out of the proposed 65 quality measures in the ACO draft, 47 are related to group practice, seven are based on surveys, and 11 come from claims data. In the proposed rule, CMS is looking for comments on the implications of including or excluding any of the 65 proposed measures. CMS is also asking for suggestions on a process for retiring or adjusting the formulas for each measure.
The advocacy group says it will offer comments to CMS related to the group’s concern about the use of only condition-specific measures like dehydration, congestive heart failure, bacterial pneumonia, chronic obstructive pulmonary disease, uncontrolled diabetes, and urinary infections for the patient population 65 and older.
“The over 65-year-old population is at highest risk of having multiple chronic conditions, and measures for this population need to be included in the ACO program when it is first implemented in anticipation that the program will encompass other health care settings in the future,” AHCA/NCAL told CMS.
Participation in ACOs is voluntary for both providers and patients. Unlike managed care, patients who receive care from ACO providers do not enroll in the network and can go outside of the network for care. Participating providers continue to be paid individually, on a fee-for-service basis.
A Long Term Care Take On ACOs
AHCA’s Gifford says the percentage of savings ACO participants receive from CMS will be determined by how well they perform on each measure. “Physician groups want to score as well as possible on quality measures,” he says.
In the areas of hospitalizations and re-hospitalizations, there is clearly an area for nursing facilities to work with primary care physicians in ACOs as well as for measure related to diagnoses like heart disease and diabetes. In addition to quality measures, SNFs could help ACOs achieve cost savings, says Gifford. “All of this movement to ACOs is predicated on creating financial incentives to share in cost savings.”
There are important characteristics of what ACOs would demand from any long term care provider interested in becoming active in one, he says. The CMS rule emphasizes electronic health records, making it possible for participants to share electronic data from laboratories, MDS data, and other aspects of care delivery.
It is unlikely that nursing facilities will need to identify which patients in are in or not in an ACO, he notes. “However, administrators should be asking all of the physicians providing care in their facility if they or their group plan to take part in an ACO,” Gifford says.
Providers Take Note
Gifford thinks long term care providers should be interested in ACO developments, if for no other reason than it represents a sea change in thinking at CMS.
“This is the first really big statement from CMS on the changes that are going to happen from health care reform. ACOs may or may not make it, but if it’s not an ACO, then it will be something else such as bundled payments,” Gifford says, echoing a sentiment heard throughout the provider community.
He lists three areas to keep in mind moving forward. There will be substantial payment changes coming, with real accountability for performance, and quality care as the model.
Providers should be thinking of quality metrics and how to improve their scores on Nursing Home Compare and Home Health Compare, he says. They should also examine closely and in a sophisticated way what the costs are for each service being provided in their facilities, and compare them against the costs of neighboring facilities.
“ACO is really just an organized structure for measuring performance, payment, and quality,” Gifford says. How post-acute care providers collaborate within the structure depends on how much they want to participate in innovative payment models.