In a Nov. 17 letter to CMS, the AHA outlined several principles and themes that should guide implementation of accountable care organizations. Here are 15 suggestions the AHA brought up in its letter.
1. Start slowly, in stages. Start the program slowly, "perhaps limiting the number of ACOs in the early years and establishing mechanisms for ongoing evaluation," so that successes could be replicated, the letter stated. There should also be "a mechanism to make mid-course corrections in the administrative requirements and methodologies," it said.
2. Allow for many ACO types. There should also be a wide variety of types of financial risk-taking and ACO size, "in order to identify factors that can cause the program to fail."
3. Incent beneficiaries to stay put. To implement care coordination, there should be incentives for beneficiaries to stay within the ACO. Also, CMS should waive the hospital discharge condition of participation that prohibits recommending specific sources of post-acute care to beneficiaries. This would allow the ACOs to demonstrate "why it would be advantageous to stay within the ACO network where all providers participate in a common quality improvement process," the letter said.
4. Let ACOs determine their structure. CMS should "defer details of the organization, such as the leadership and management structure," focusing instead on issues such as "formal legal structure enabling the ACO to accept and distribute shared savings to participating providers," the letter said.
5. Provide real-time feedback. ACOs need access to "near real-time data to support the types of interventions that could address care issues" and "enable effective ACO monitoring of progress on performance measures," the AHA said. Real-time data was not available in the Physician Group Practice demonstration, which was the model for ACOs. As a result, participants "often did not know about the delivery of out-of-network care until well after it was furnished, submitted for payment and reported by CMS back to the sites months later," the letter said. Data from claims "needs to be received faster – on a monthly, or even weekly, basis," it stated.
6. Start with a few quality measures. Begin the program with a small set of core measures and create a strategic plan for implementing more quality measures. In addition to measures endorsed by the National Quality Foundation, use "measures beyond the inpatient setting, including post-discharge place of service information," the AHA said.
7. Clarify expected savings. Since forming an ACO requires a significant capital investment, participants need to have a clear idea of expected savings under the program. They need "all of the methodologies that CMS will use to attribute beneficiaries to their ACO" as well as "how the savings will be calculated and when the savings will be distributed to the ACO," the letter said. The AHA recommends placing initial savings from CMS' random variation adjustment into an investment fund to help finance "ACOs showing signs of potential success, or to provide periodic interim payments to ACOs to help fund infrastructure."
8. Don't limit shared savings. ACOs should receive a percentage of all the savings they generate, rather than CMS collecting 2 percent "off the top," as occurred in the Physician Group Practice demonstration. The loss of these funds "could be a disincentive for formation of ACOs."
9. Don't overemphasize the need for savings. "The need for savings should not be so dominant that it discourages this type of delivery reform, killing it in the early stages," the letter stated.
10. Specify ACO responsibilities in advance. ACOs should know about assignment of beneficiaries, and spending and quality targets and methodologies in advance. This will help them determine whether an ACO is a viable option and give them an idea how spending targets and performance evaluation will be calculated.
11. Waive barriers to clinical integration. These barriers include five major federal laws, such as antitrust, anti-kickback and Stark laws, which were discussed in listening session held by the Federal Trade Commission and CMS in October.
12. Provide education and outreach to beneficiaries. Medicare beneficiaries need to understand the benefits of receiving care from an ACO and they must be given incentives "to encourage engagement with their care teams in managing their conditions and to stay within the ACO’s network," the letter states.
13. Don't make rules on distributing shared savings. ACOs should have flexibility in how they distribute savings. "Building the necessary relationships within an ACO will require a great deal of flexibility to ensure that performance targets are met," the letter said.
14. Don’t specify what services must be directly provided. Other than having adequate primary care capacity, ACOs should be free to decide which services to provide directly. "ACOs will have strong incentives to build the relationships necessary to have as many of the needed services delivered within the ACO," the letter said. "Rigidity in this area of the rules could pose barriers to ACOs, especially in rural areas."
15. Accommodate rural areas. "Many different models need to be tested in the first phase of the national program," the letter stated. "We feel it is especially important to find a way to foster delivery reform in rural areas and we are concerned that the statutory requirements for ACOs limit the ability of rural providers to participate in the shared savings program."
Read the AHA letter to CMS (pdf).
Read more on CMS' plans for ACOs:
- CMS Asks When Medicare Beneficiaries Should be Assigned to ACOs
- CMS Administrator Dr. Don Berwick Comments on Reform, System Integration, New Payment Method
- Federation of American Hospitals Answers 10 Questions on ACOs Posed by Antitrust Enforcers
1. Start slowly, in stages. Start the program slowly, "perhaps limiting the number of ACOs in the early years and establishing mechanisms for ongoing evaluation," so that successes could be replicated, the letter stated. There should also be "a mechanism to make mid-course corrections in the administrative requirements and methodologies," it said.
2. Allow for many ACO types. There should also be a wide variety of types of financial risk-taking and ACO size, "in order to identify factors that can cause the program to fail."
3. Incent beneficiaries to stay put. To implement care coordination, there should be incentives for beneficiaries to stay within the ACO. Also, CMS should waive the hospital discharge condition of participation that prohibits recommending specific sources of post-acute care to beneficiaries. This would allow the ACOs to demonstrate "why it would be advantageous to stay within the ACO network where all providers participate in a common quality improvement process," the letter said.
4. Let ACOs determine their structure. CMS should "defer details of the organization, such as the leadership and management structure," focusing instead on issues such as "formal legal structure enabling the ACO to accept and distribute shared savings to participating providers," the letter said.
5. Provide real-time feedback. ACOs need access to "near real-time data to support the types of interventions that could address care issues" and "enable effective ACO monitoring of progress on performance measures," the AHA said. Real-time data was not available in the Physician Group Practice demonstration, which was the model for ACOs. As a result, participants "often did not know about the delivery of out-of-network care until well after it was furnished, submitted for payment and reported by CMS back to the sites months later," the letter said. Data from claims "needs to be received faster – on a monthly, or even weekly, basis," it stated.
6. Start with a few quality measures. Begin the program with a small set of core measures and create a strategic plan for implementing more quality measures. In addition to measures endorsed by the National Quality Foundation, use "measures beyond the inpatient setting, including post-discharge place of service information," the AHA said.
7. Clarify expected savings. Since forming an ACO requires a significant capital investment, participants need to have a clear idea of expected savings under the program. They need "all of the methodologies that CMS will use to attribute beneficiaries to their ACO" as well as "how the savings will be calculated and when the savings will be distributed to the ACO," the letter said. The AHA recommends placing initial savings from CMS' random variation adjustment into an investment fund to help finance "ACOs showing signs of potential success, or to provide periodic interim payments to ACOs to help fund infrastructure."
8. Don't limit shared savings. ACOs should receive a percentage of all the savings they generate, rather than CMS collecting 2 percent "off the top," as occurred in the Physician Group Practice demonstration. The loss of these funds "could be a disincentive for formation of ACOs."
9. Don't overemphasize the need for savings. "The need for savings should not be so dominant that it discourages this type of delivery reform, killing it in the early stages," the letter stated.
10. Specify ACO responsibilities in advance. ACOs should know about assignment of beneficiaries, and spending and quality targets and methodologies in advance. This will help them determine whether an ACO is a viable option and give them an idea how spending targets and performance evaluation will be calculated.
11. Waive barriers to clinical integration. These barriers include five major federal laws, such as antitrust, anti-kickback and Stark laws, which were discussed in listening session held by the Federal Trade Commission and CMS in October.
12. Provide education and outreach to beneficiaries. Medicare beneficiaries need to understand the benefits of receiving care from an ACO and they must be given incentives "to encourage engagement with their care teams in managing their conditions and to stay within the ACO’s network," the letter states.
13. Don't make rules on distributing shared savings. ACOs should have flexibility in how they distribute savings. "Building the necessary relationships within an ACO will require a great deal of flexibility to ensure that performance targets are met," the letter said.
14. Don’t specify what services must be directly provided. Other than having adequate primary care capacity, ACOs should be free to decide which services to provide directly. "ACOs will have strong incentives to build the relationships necessary to have as many of the needed services delivered within the ACO," the letter said. "Rigidity in this area of the rules could pose barriers to ACOs, especially in rural areas."
15. Accommodate rural areas. "Many different models need to be tested in the first phase of the national program," the letter stated. "We feel it is especially important to find a way to foster delivery reform in rural areas and we are concerned that the statutory requirements for ACOs limit the ability of rural providers to participate in the shared savings program."
Read the AHA letter to CMS (pdf).
Read more on CMS' plans for ACOs:
- CMS Asks When Medicare Beneficiaries Should be Assigned to ACOs
- CMS Administrator Dr. Don Berwick Comments on Reform, System Integration, New Payment Method
- Federation of American Hospitals Answers 10 Questions on ACOs Posed by Antitrust Enforcers