Accountable Care Organizations

2. Table of Contents
• PART I: Introduction, History, ACO Stake holders, Core principles for all ACOs, CMS
Announcement you-tube clip
(Anthony Harding)
• PART II: Overview of ACO and Key Elements of ACO/Health Reform
• (Jolly Patel)
• PART IV: The ACO - Immediate Benefits for Delaware
• (Anthony Mbirwe)
• PART V: Conclusion
• (Jitka Gruntova)

3. Introduction
 An accountable care organization  The ACO is accountable to the
(ACO) is a type of payment and patients and the third-party payer
delivery reform model that seeks to for the quality, appropriateness, and
tie provider reimbursements to efficiency of the health care
quality metrics and reductions in provided.
the total cost of care for an assigned
 According to the Centers for
population of patients.
Medicare and Medicaid Services
 A group of coordinated health care (CMS), an ACO is "an organization
providers form an ACO, which then of health care providers that agrees
provides care to a group of patients. to be accountable for the quality,
 The ACO may use a range of cost, and overall care of Medicare
payment models (capitation, fee- beneficiaries who are enrolled in
for-service with asymmetric or the traditional fee-for-service
symmetric shared savings, etc.). program who are assigned to it.

4. ACO Stakeholders
 Providers-ACOs are comprised mostly of hospitals, physicians, and
other healthcare professionals. Depending on the level of integration
and size of an ACO, providers may also include health departments,
social security departments, safety net clinics, and home care services.
 Payers- The federal government, in the form of Medicare, will be the
primary payer of an ACO. Other payers include private insurances, or
employer-purchased insurance.
 Patients- An ACO‟s patient population will primarily consist of
Medicare beneficiaries. In larger and more integrated ACOs, the
patient population may also include those who are homeless and
uninsured.

6. History
 The term “Accountable Care Organization”  Like the HMO, the ACO is “an entity that
was first used by Elliott Fisher – Director will be „held accountable‟ for providing
of the Center for Health Policy Research at comprehensive health services to a
Dartmouth Medical School population.“
 In 2006 during a discussion at a public  The ACO-model builds on the Medicare
meeting of the Medicare Payment Advisory Physician Group Practice Demonstration
Commission. and the Medicare Health Care Quality
 The term quickly became Demonstration, established by the 2003
widespread, reaching its pinnacle in 2009 Medicare Prescription Drug, Improvement,
when it was included in the Patient and Modernization Act.
Protection and Affordability Care Act.  Kaiser Permanente and HealthCare
 Although the term ACO was not coined Partners Medical Group are two notable
until 2006, it bears resemblance to the examples of successful ACO prototypes.
definition of the Health Maintenance  However, a recent study by the Medical
Organization (HMO), which rose to Group Management Association (MGMA)
prominence in the 1970s. has shown that the implementation of
ACOs is one of the toughest challenges
facing the MGMA members today

8. CMS Announces Accountable
Care Organization Rule
http://youtu.be/K1OwHo3kV1o

9. What Is An Accountable Care Organization (ACO)?
 http://youtu.be/ULy5vjcGuDc
 Consists of providers who are jointly held accountable for
achieving measured quality improvements and reductions
in the rate of spending growth
 May involve a variety of provider configurations, ranging
from integrated delivery systems and primary care medical
groups to hospital-based systems and virtual networks of
physicians such as independent practice associations
 Has a strong base of primary care, although hospitals are
encouraged to participate, because improving hospital care
is essential to success

10. ACOs In Perspective
Think of it like buying a television...
A TV manufacturer such as Sony may contract with many
suppliers to build a TV – like a Sony, an ACO would bring
together the different component parts of care for the
patient (primary care, specialists, hospitals, home health
care, etc.) and ensure that all of the parts work well together
The problem today is that patients are getting each part of
their health care separately – they are buying individual
circuit boards, not a whole TV

11. Core Capabilities

12. How Does It Differ From HMOs?
 The principle difference between HMOs and ACOs is their
size
 HMOs, like most insurance companies, generally have
enrollees in the hundreds of thousands compared with as
few as 5,000
 HMOs function like insurance companies (they bear 100
percent of the risk that the premiums they charge will not
be enough to cover all necessary services for their
enrollees) while ACOs will bear little or no insurance risk
in their first few years

13. Key Concepts
 The key concepts for ACOs are “continuum of the care”
and “quality of the care”
 ACOs in the future will see incentives for providers who
keep costs down and still manage to meet specific quality
benchmarks, concentrating on prevention of chronic
diseases and efficient disease management
 Keeping the costs of hospitalizations under control and
then providing quality home healthcare to patients is
essential to success

14. ACOs & The PPACA
 The Patient Protection and Affordable Care Act (PPACA)
was signed into law by President Obama on March 23,2010
 The PPACA’s intent is to ensure that all Americans have
access to quality, affordable health care and will create the
transformation within the health care system necessary to
contain costs

15. PPACA Titles I - III
The Patient Protection and Affordable Care Act contains
nine titles, each addressing an important component of
reform:
I. Quality, affordable health care for all Americans
II. The role of public programs
III. Improving the quality and efficiency of health care

16. PPACA Titles IV - IX
IV. Prevention of chronic disease and improving public
health
V. Health care workforce
VI. Transparency and program integrity
VII. Improving access to medical therapies
VIII. Community living assistance services and supports
IX. Revenue provisions

17. Title III
Improving the Quality and Efficiency of Health Care
 The PPACA will encourage development of new Patient
Care Models starting with a new Center for Medicare &
Medicaid Innovation to be established within the Centers
for Medicare and Medicaid Services

18. Medicare & Medicaid Innovation
 This new Center for Medicare & Medicaid Innovation will
have the responsibility of research, development, testing
and expanding innovative payment and delivery
arrangements
 ACOs that take responsibility for cost and quality received
by patients will receive a share of savings they achieve for
Medicare

19. Requirements For ACO Status
1. A willingness to become accountable for the
quality, cost, and overall care of the Medicare
beneficiaries it treats
2. Entrance into an agreement with the Secretary of Health
and Human Services (HHS) to participate in the
program for not less than 3 years
3. A formal legal structure that allows the entity to receive
& distribute payments

20. Requirements Continued
4. The inclusion of primary care professionals that are
sufficient for the number of Medicare beneficiaries
assigned to the ACO
5. Provision to the Secretary of information regarding the
professionals who participate in the ACO and
implementation of quality and other reporting
requirements

21. Requirements Continued
6. A leadership and management structure that
includes clinical and administrative systems
7. Defined processes that promote evidence-based
medicine and patient engagement, reporting on
quality and cost measures, and care coordination
8. Demonstration that the organization meets patient-
centered criteria

22. More About ACOs
 The ACO initiative was scheduled to launch in January 2012
 Right now, a main source of revenue for healthcare
organizations comes from the tests and procedures
performed on patients in the current fee-for-service
payment system, but after the creation of ACOs,
organizations and providers will get paid for saving more
while still providing quality healthcare to the patients - they
will get paid for keeping patients healthy and out of the
hospital

23. Financial Savings Associated With ACOs
 The Congressional Budget Office estimates that ACOs
could save Medicare at least $4.9 billion through 2019 –
less than one percent of Medicare spending during that
period, but if the program is successful it can be
expanded by the Secretary of Health and Human Services

24. Comparison of Payment Reform Models

25. Cost Considerations For The ACO
 Predominately large hospital systems and big physician
groups are pursuing the ACO concept due to the large
investment required in healthcare IT and infrastructure
 ACOs are designed to encourage consolidation among
hospitals and doctors which has also drawn anti-trust
scrutiny
 If an ACO is not able to save money, it would be stuck
with the costs of investments made to improve care, such
as adding new nurse care managers, but would still get to
keep the standard Medicare fees

26. Who Is In Charge Of The ACO?
 It’s flexible – can be hospitals, doctors, or even insurers
 Some regions of the country already have large multi-
specialty physician groups that may become an ACO on
their own, likely by networking with neighboring hospitals
 In other regions, large hospital systems are buying
physician practices with the goal of becoming ACOs that
directly employ the majority of their providers (because
hospitals usually have access to capital, they may have an
easier time than doctors in financing the initial
investment required by an ACO)

27. What Does This Mean For You, The Patient?
 http://youtu.be/Xlq2XJ6J76g
 Patients may not even know that they are part of an ACO
 Doctors will want to refer patients to hospitals and
specialists within the ACO network, however patients
will still be free to see doctors of their choice outside the
network
 Because ACOs will be under pressure to provide high
quality care in order to receive financial benefits, patients
should ultimately receive better care

28. The ACO - Immediate Benefits for
Delaware
Support for seniors
 Last year, roughly 11,900 Medicare beneficiaries in Delaware hit the donut hole, or
gap in Medicare Part D drug coverage, and received no additional help to defray the
cost of their prescription drugs.
 By August last year, 2,983 of seniors in Delaware had received their $250 tax free
rebate for hitting the donut hole
 The new law continues to provide additional discounts for seniors on Medicare in
the years ahead and closes the donut hole by 2020
Free preventive services for seniors
 All 140,000 of Medicare enrollees in Delaware will get preventive services, like
colorectal cancer screenings, mammograms, and an annual wellness visit without
copayments, coinsurance, or deductibles.

29. The ACO - Immediate Benefits for
Delaware
Coverage expansions
 $13 million from federal government will be available for Delaware State beginning
July 1st to provide coverage for uninsured residents with pre-existing medical
conditions through a new Pre-Existing Condition Insurance Plan program, funded
entirely by the Federal government
 This program is a transition to 2014 when Americans will have access to affordable
coverage options in the new health insurance system and insurance companies will
be prohibited from denying coverage to Americans with pre-existing conditions.
Small business tax credits
 About 14,000 small businesses in Delaware will be eligible for the new small
business tax credit that makes it easier for businesses to provide coverage to their
workers and makes premiums more affordable.
 Small businesses pay, on average, 18 percent more than large businesses for the
same coverage and health insurance premiums have gone up three times faster than
wages in the past 10 years.

30. The ACO - Immediate Benefits for
Delaware
Extending coverage to young adults
 When families renew or purchase insurance on or after September
23, 2010, plans that offer coverage to children on their parents‟ policy must
allow children to remain on their parents‟ policy until they turn 26, unless the
adult child has another offer of job-based coverage in some cases
Health coverage for early retirees
 An estimated 16,000 people from Delaware retired before they were eligible
for Medicare and have health coverage through their former employers.
Unfortunately, the numbers of firms that provide health coverage to their
retirees have decreased over time.
 This year, a $5 billion temporary early retiree reinsurance program will help
stabilize early retiree coverage and help ensure that firms continue to provide
health coverage to their early retirees. Companies, unions, and State and local
governments are eligible for these benefits

31. The ACO - Immediate Benefits for
Delaware
Improved Access to Care
 Patients‟ choice of doctors will be protected by allowing plan members in
new plans to pick any participating primary care provider, prohibiting
insurers from requiring prior authorization before a woman sees an ob-
gyn, and ensuring access to emergency care.
More doctors where people need them
 Beginning October 1, 2010, the Act will provide funding for the National Health
Service Corps i.e. $1.5 billion over five years for scholarships and loan
repayments for doctors, nurses and other health care providers who work in
areas with a shortage of health professionals. And the Affordable Care Act
invested $250 million dollars this year in programs that will boost the supply of
primary care providers in this country – by creating new residency slots in
primary care and supporting training for nurses and physician’s assistants. This
will help the 14% of Delaware’s population who live in an underserved area

32. ACO’s- Summary
 ACO’s = health care organizations and related set of
providers - primary care physicians, specialists, and
hospitals that are accountable for the cost and quality
of care delivered to a defined population.
 The goal of the ACO’s is to deliver coordinated and
efficient care.
 ACO’s that achieve quality and cost targets will receive
some sort of financial bonus, and, those that fail will
be subject to a financial penalty

33. Concept of ACO’s
 ACO’s make the people and organizations that actually
provide care accountable for the quality and the cost of that
care.
 Previous health reform initiatives involved insurers and
made them ultimately accountable.

34. The positive side of ACO’s
 Beneficiaries/patients will be able to go anywhere for care and will
be able to use any physician.
 Patients will be able to enroll for lower premiums.
 New programs will be available and some programs will be
expanded. For example, some services like screenings and
vaccinations will become free.
 There will be new rules. For example, lifetime limits on health
coverage will be gone.
 Insurers will be limited in how they spend premium dollars and they
will no longer be able to turn people down or charge them more if
they're sick.
 Some small businesses will get tax breaks to help them pay for
health insurance for their workers.
 By 2019, 32 million of American citizens who don‟t have health
insurance will have it.

35. Negative side of ACO’s
 ACO‟s will cost 938 billion dollars over the next ten years, according to the
Congressional Budget Office.
 A lot of the savings will come from health care providers and insurers in the
Medicare program.
 The fees the government pays to hospitals under Medicare won‟t be allowed to rise
as fast as they have been.
 Insurance companies that provide services to people on Medicare will be paid less.
 A terrible business deal for providers. In order to get any shared savings, they will
have to spend millions on consulting, systems, care managers and IT staff, give up a
dollar in immediately reduced income, and maybe, if they check all the boxes
right, get 50 or 60 cents back in 18 months.
 Further, some taxes will go up too. For example, people with high earnings will pay
higher Medicare taxes.
 There will be new taxes on insurers and businesses who offer high-end benefit
plans, and on companies that make medical devices and drugs.

36.  Do you like the new health care law, hate it, still don’t know?
 Any Questions?