Physician-led accountable care organizations (ACOs) could have more opportunities to create savings in patient care with a little help from health insurers, a leading health reform expert said Wednesday.
Doctor-centric ACOs can do a better job at controlling costs than hospital-led organizations, Paul Ginsburg, PhD, president of the Center for Studying Health System Change, said at an ACO summit hosted by America's Health Insurance Plans.
Entrepreneurial insurance companies can offer loans to provider groups to expand or re-engineer to become ACOs through Medicare or commercial payers. Others can create innovative programs that have physicians take additional risk to improve outcomes and lower costs for patients.
"I think physician-led ACOs inherently make markets more competitive because they have an opportunity to shift patients toward higher-value hospitals," Ginsburg said. "It means that a hospital market that might not have large competition going, all of a sudden, if there's a physician-led ACO, those hospitals have to compete on price for the allegiance of those physician-led ACOs."
Unlike in hospital-led ACOs, doctor-led ACOs aren't compromised financially by reducing hospital admissions and emergency department visits, he pointed out.
In fact, physician-led ACOs already outnumber their hospital counterparts, the latest data from the Centers for Medicare and Medicaid Services (CMS) show. However, doctor-organized groups typically treat fewer patients than those formed by hospitals.
Charlie Baker, former Secretary of Health and Human Services Secretary in Massachusetts, noted that nearly every shared-risk model in Medicare Advantage is with physician groups and not hospitals, he says, because insurers know that's how to save money.
Baker said he believes there will be more growth in small providers pooling resources to become ACOs. "My big fear is they're starting behind the larger players, way behind," Baker said.
Physician groups are still skeptical of quality metrics used to determine the shared savings in ACOs, Ginsburg said.
However, CMS rules on ACOs favor hospital-led organizations. "The CMS rules are making it exceedingly difficult for an independent physician group to form an ACO," Baker said.
To that point, Ginsburg noted the federal government can play a larger role in facilitating physician-led ACOs.
"I think of the federal support for the HMOs in the 1970s as to whether it'd be feasible to have the federal government support the development of physician organizations as an investment for viable markets in the future," Ginsburg said.
No matter what happens, whatever strategy emerges to control costs must tackle provider payments—an area public and private payers seem to be in agreement on.
Source: MedPage Today, May 15, 2013.
As the care delivery models of hospitals and health systems evolve, health care executives and practice area managers predict a major shift in admissions from inpatient to outpatient settings.
According to Premier Healthcare Alliance's Spring 2013 Economic Outlook, 69% of the survey participants predict that outpatient volume will rise in 2013, as compared to last year's volume. And as outpatient admissions are projected to increase, nearly 24% of respondents suggest that inpatient volume this year will drop.
“With reimbursement cuts and changes in care delivery threatening today's status quo, health care providers face a significant change imperative as they transition toward more accountable, value-based care models,” Mike Alkire, CEO of Premier, said in a news release. “Ensuring patients are cared for in the most efficient manner—without compromising quality—is key to success. This means more care is being shifted to less intensive and expensive outpatient care sites, with lower reimbursement rates.” In fact, nearly half of survey participants—48%—cited reimbursement cuts as having the greatest impact on their organizations, though the largest expenditures are expected to go toward healthcare information technology and telecommunications, according to 43% of those surveyed. That's up 21% from two years ago. Respondents also pointed to accountable care organizations as a method for integrating care across the continuum. About 22% are currently involved in an ACO, and that number is expected to more than double by the end of next year. Source: Modern Healthcare, April 29, 2013.
On Thursday, the Bipartisan Policy Center released a health care cost containment plan that would reduce the federal deficit by about $560 billion over the next decade, including about $300 billion in Medicare savings.
The report was compiled by former Democratic and Republican congressional lawmakers and health care experts, including former Senate Majority Leader Tom Daschle (D-S.D.), former Congressional Budget Office Director Alice Rivlin, and MIT economist Jonathan Gruber.
The plan offers a variety of recommendations to change health care delivery and how it is financed, including the elimination of the sustainable growth rate formula at a cost of $138 billion.
Further, health care providers in areas that have not received a rural exemption from HHS would not receive an increase in their fee-for-service payments. The fixed payments plan was proposed in an effort to drive providers into new "Medicare networks," which build upon the Affordable Care Act's accountable care organizations (ACOs).
According to BPC staff, the proposal is expected to expand the 250 existing ACOs in order to enroll about 40% of all Medicare beneficiaries within the first 10 years. The networks would be offered as a third option for Medicare beneficiaries, alongside traditional fee-for-service and Medicare Advantage. The plans would offer enrollees lower premiums and cost-sharing, while providing financial incentives to providers, hospitals and other health care providers to better coordinate care. However, the plan would equalize office visit payments, regardless of the site of care, which would save about $8.7 billion over 10 years.
In addition, the BPC's plan would combine deductibles for Medicare parts A and B into a single $500 annual deductible, with a $5,315 cap on beneficiary out-of-pocket cost sharing. Further, the report proposes expanding cost-sharing assistance to Medicare beneficiaries with annual incomes of up to 150% of the federal poverty level, or $17,235 for an individual.
The report's authors say the recommendations have been well received by congressional lawmakers and White House staff.
Source: California Healthline, April 19, 2013.
Under the provisions of the federal Affordable Care Act (ACA), Medi-Cal is required to pay primary care physicians at Medicare rates for primary care services for two years. The increase is fully funded by the federal government. The requirement began January 1, 2013 and ends December 31, 2014.
The California Department of Health Care Services (DHCS) submitted their state plan amendment (SPA) to implement the rate increase on March 29, 2013. Approval of the SPA is required by the Centers for Medicare and Medicaid Services (CMS) before the state can implement the rate adjustment. It is unclear when the rate adjustment will be approved by CMS and implemented by DHCS. In previous communications, DHCS has indicated that they expect implementation will begin in July 2013. However, the rate adjustment will be retroactive to the beginning of the year.
Below are answers to frequently asked questions about implementation of the rate adjustment as outlined in the SPA. Please note these provisions are subject to change pending approval by the CMS.
Federal guidance on the implementation of the rate increase was delayed until November 2012. The DHCS claims that the federal delay and the complications involved with applying the rate increase to managed care delayed the submission of the SPA.
Any physician who is board-certified in internal medicine, family medicine, or pediatrics by the American Board of Physician Specialties, the American Board of Medical Specialties, or the American Osteopathic Association. This includes recognized physician subspecialties of the above board certified specialties.
Or, any physician who practices (but is not board certified) in a specialty or sub-specialty of internal medicine, family medicine, or pediatrics who also bills at least 60% of services rendered for qualifying codes. DHCS has indicated that billing 60% of services for qualifying codes alone does not qualify a physician unless they also can legitimately attest to practicing in internal medicine, family medicine or pediatric medicine or a subspecialty of internal medicine family medicine or pediatric medicine recognized by the ABMS, ABPS or AOA.
Click here to view the list of qualifying primary care providers (PCP).
Generally, physicians will self-attest that they qualify for the increased rates. DHCS is developing an online registry that physicians will use to register. However, managed care plans are allowed to choose to either use the DHCS attestation tool or develop their own.
The rate increase applies to:
The rate increase also applies to state-specific “Z” codes—Z0100, Z0102, Z0104, Z0106 and Z0108. These codes are relevant to some state-only programs, such as Family PACT, as well as many services provided in neonatal and prenatal intensive care units (NICU and PICU).
Per the SPA, rates will be based on the 2009 Medicare Fee Schedule. Geographic Payment Center Indices (GPCIs) will apply. SFMS/CMA urged the DHCS to adopt this approach based on our analysis that this approach would benefit California physicians.
No, only the physician who is personally providing the service is eligible for the increase.
Yes. Plans will be receiving increased payments, through the State of California, to pay providers at Medicare rates. The increase is fully funded by the federal government for 2 years beginning January 1, 2013 and ending December 31, 2014.
Plans will be contractually obligated to prove that they are paying primary care physicians at least the Medicare rates. The payments made to plans to cover the increased cost of higher rates will be separate from their general capitation payments, allowing for separate accounting. The SPA included plan reporting requirements to ensure the rate adjustment funding is going to the service providing physician.
SFMS/CMA members with questions about Medi-Cal reimbursements can receive complimentary one-on-one assistance by contacting our Member Helpline at (800) 786-4262.
Thanks to the Supreme Court ruling and Barack Obama's re-election, the Affordable Care Act isn't going away. The issue now is how it will work.
Even by Washington standards, implementing this law is extraordinarily complex. The federal government last year issued 70,000 pages of guidance, including 130 pages on the look of websites for new marketplaces where many will shop for insurance.
Here’s a quick look at how it will impact consumers, employers, states, and health care providers.
Most will do pretty much what they do now. About 55% of Americans of all ages get health insurance through an employer; another 32% through a government program. For most, not much will change, though workers are likely to pay more for health care as employers pass along costs. Also, the law will require employers who offer skimpy benefits to provide more robust ones.
The challenge is to prompt one group of consumers to change—the 18 million 20- and 30-somethings who don't have health insurance. The arithmetic of Obamacare depends on getting more Americans to buy health insurance. If the young and healthy don't show up, the math doesn't work—and the cost of insurance for those who do shop in the new exchanges will be higher.
Mostly wait and see. Even employers flirting with getting out of the benefits business or giving workers a fixed sum and letting them shop for insurance won't move quickly.
Implementing the Affordable Care Act is extraordinarily complex. One provision already appears to be having unwelcome, unintended consequences. It requires employers with more than 50 workers to offer insurance to anyone who works 30 hours a week or more. That gives fast-food, retail and other employers who rely heavily on low-wage, part-timers an incentive to keep workers to 29 hours or less; word is that many already are doing so. Smaller firms have reason not to expand their workforces above 50, or to game the system by subdividing themselves.
The Congressional Budget Office estimates that about 8 million fewer workers, about 5% of the total, will get insurance through employers five years from now than would have been the case without the Affordable Care Act.
But no one really knows how many employers will find ways to drop coverage or to structure benefits so sicker, costlier workers get insurance at the new exchanges.
They have until Friday to decide whether to create an exchange or let the federal government set one up. New York and California already are committed to fully running their own exchanges; Texas and Georgia have signaled they won't take on any of the tasks. It isn't clear how much help the abstainers will offer Washington in crafting the marketplaces and recruiting customers. State resistance would be an obstacle to an already tough task.
And then there is Medicaid, the state-federal program for the poor. The law substantially expands eligibility, at Washington's expense for the first three years, but the Supreme Court ruled that states don't have to go along. CBO projects that in the next five years, Medicaid rolls will grow to 45 million from 36 million.
About half of the governors (including six of the 29 who are Republican) have decided to expand their Medicaid programs; turning down federal money is hard.
But about half say they won't (including 13 Republicans) or are still on the fence (including 11 Republicans). States that don't expand Medicaid likely will have more uninsured, which means, among other things, that health-care providers and employers who do offer insurance will, effectively, pick up the cost of caring for the uninsured when they do get care.
Merge and grow bigger. The law encourages the integration of hospitals, doctors, and nursing homes. It takes aim at the underlying problem: The U.S. has evolved the developed world's most inefficient health-care delivery system, one that too often rewards volume of care and not quality. Integrated health providers such as Kaiser Permanente and Geisinger Health System are seen as models of low costs and high quality.
But there is a risk or—if you talk to insurers—a nightmare. The proliferation of hospital mergers and hospitals' appetite for buying doctors' practices—in part to assure a steady stream of patients to fill hospital beds—could create local monopolies that raise prices without increasing efficiency.
Source: The Wall Street Journal, February 13, 2013.