1. Accountable
Care
Organiza2ons
(ACOs)
Wednesday,
January
29,
2014
Disclaimer:
Nothing
that
we
are
sharing
is
intended
as
legally
binding
or
prescrip7ve
advice.
This
presenta7on
is
a
synthesis
of
publically
available
informa7on
and
best
prac7ces.

2. Accountable
Care
Organiza,ons
(ACOs)
• Builds
off
Pa,ent-­‐Centered
Medical
Home
– Coordinated
care
to
ensure
seamless
transi,on
between
services
and
levels
of
care
• Formalizes
Pa,ent-­‐Centered
Medical
Neighborhoods
– Brings
together
primary
care
physicians,
specialists,
and
hospitals
• Reimbursement
amount
linked
to
quality
• Launched
in
2012

3. ACO
Overview
• Model
for
delivery
• Voluntary
virtual
conglomerate
– For
providers
serving
Medicare
beneficiaries
– Shared
responsibility
amongst
coordinated
healthcare
providers
•
•
•
•
•
High
quality
care
Curtailing
growth
of
healthcare
costs
Shared
accountability
for
pa,ent
health
outcomes
Comba,ng
overu,liza,on
of
healthcare
services
Improved
value
of
care
– Financial
incen,ve
from
money
saved

4. Key
Design
Features
of
an
ACO
•
•
•
•
•
•
•
Accountability
Organiza,on
and
Governance
Primary
care
focus
Sufficiently
sized
pa,ent
popula,ons
Investment
in
delivery
system
improvement
Shared
saving
Performance
Measurement

5. Success
Criteria
for
ACOs
•
•
•
•
Leadership
Teamwork-­‐oriented
organiza,onal
structure
Synergis,c
provider
rela,onships
IT
infrastructure
– Popula,on
analy,cs
and
management
– Coordina,on
of
care
•
•
•
•
Quality
indicators
Financial
risk
management
Pa,ent
educa,on
and
support
Financial
infrastructure

6. Fundamentals
of
an
ACO
•
•
•
•
•
Leadership
Organiza,onal
commitment
Upfront
investment
Informa,on
flows
and
technology
Care
management
strategies

7. ACO
Technology
Infrastructure
Enterprise
Revenue
Cycle
Management
Electronic
Health
Record
Pa,ent Engagement
Informa,cs
Health
Informa,on
Exchange

8. Technology
Considera,ons
Pa,ent
Engagement
Data
Aggrega,on
Popula,on
Health
Management
Privacy
and
Security
Clinical
and
Administra,ve
Date
Exchange
Performance
Management
Repor,ng
Infrastructure
Finances

9. Startup
Costs
• Startup
costs
reported
by
the
Na,onal
Associa,on
of
Accountable
Care
Organiza,ons
(NAACOS)
– Average:
$
2
million
– Range:
$300
thousand
-­‐
$
6.7
million
– Excluding
•
•
•
•
Feasibility
studies
CMS
applica,on
Legal
fees
Other
pre-­‐contract
costs
– Higher
than
CMS
es,mate
($1.8
million)
– Less
than
AHA
es,mate
($11.6
to
$26.5
million)
– Financial
risk:
$
4
million
in
first
year

10. Startup
Cost
Categories
Network
Development
and
Management
Human
Resources
and
compensa,on
Care
Coordina,on,
Quality
Improvement,
and
U,liza,on
Management
Disease
registries
Clinical
Informa,on
Systems
EHR
Legal
and
consul,ng
support
Financial
and
MIS
systems
Recruitment
and
restructuring
Care
paeern
analyses
Care
Coordina,on
intra-­‐system
EHR
Disease
Management
Strategic
partnerships
Post-­‐acute
care
Data
Analy,cs
Quality
Repor,ng
PCMH
Cer,fica,on
HIE

11. Startup
Costs
by
Beneficiaries
Es2mated
Start
Up
Costs
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
5,000
-­‐
15,000
16,000
-­‐
25,000
Aligned
Beneficiaries
26,000+

12. Costs
IT
Costs
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Internal
IT
External
Vendor
5,000
-­‐
10,000
10,000
-­‐
15,000
15,000
-­‐
25,000
Aligned
Beneficiaries
26,000+

13. Es,mated
Savings*
•
•
•
•
13
ACOs
broke
even
9
ACOs
gained
an
average
$1.3
million
6
ACOs
lost
an
average
of
$1.3
million
6
ACOs
did
not
know
or
did
not
report
* Source:
Na7onal
Associa7on
of
Accountable
Care
Organiza7ons
(NAACOS)

14. Opera2onal
Challenges
Other
22%
CMS
Data
40%
Out
of
Network
Use
7%
Quality
Repor,ng
11%
Governance
9%
IT
Opera,ons
11%

15. ACO
Accredita,on
• NCQA
– Standards
•
•
•
•
•
•
Pa,ent
access
to
care
Pa,ent
rights
and
responsibili,es
Primary
care
Care
management
and
coordina,on
capability
Prac,ce
paeerns
and
performance
repor,ng
Program
opera,ons
– HEDIS
• Clinical
Quality
Measures
• Efficiency/overuse/u,liza,on
• Pa,ent
experience

16. NCQA
Evalua,on
•
•
•
•
•
•
•
ACO
structure
and
opera,ons
Access
to
needed
providers
Pa,ent-­‐Centered
primary
care
Care
management
Care
coordina,on
and
transi,ons
Pa,ent
rights
and
responsibili,es
Performance
repor,ng
and
quality
improvement

17. Medicare
Shared
Saving
Program
(MSSP)
Eligibility
• Applica,ons
accepted
annually
– No,ce
of
Intent
must
be
filed
• Summer
2014
• Three-­‐year
term
• Applica,on
must
demonstrate
– Ongoing
quality
assurance
and
improvement
– Prac,ce
of
evidence-­‐based
medicine
– Pa,ent
engagement
– Care
coordina,on
• Decision
regarding
one-­‐sided
or
two-­‐sided
ACO

18. One-­‐Sided
vs.
Two-­‐Sided
ACO
One-­‐
Sided
• Annual
shared
savings
payment
• No
penalty
for
expenditures
exceeding
benchmark
• First
three
years
only
Two-­‐
Sided
• Penalty
for
expenditures
exceeding
benchmark
• Higher
payment
if
expenditures
are
less
than
benchmark

19. What’s
Next?
February
5,
2014
–
Physician
Quality
Repor,ng
System
(PQRS)

20. Q&A
dan.holleran@quirkhealthcare.com
tamina.vahidy@quirkhealthcare.com