Joining an ACO? Questions to Ask Before You Sign

March 29, 2013

by Louise Walling

On October 20, 2011, rules were finalized by the Centers for Medicare & Medicaid Services (CMS) to help doctors, hospitals, and other health care providers better coordinate care for Medicare patients through Accountable Care Organizations (ACOs). (1) The intent of the program is to encourage health care providers to coordinate a Medicare Fee-For-Service beneficiary’s care to avoid duplication of services and hospitalizations, and prevent medical errors.

The end result is to show a reduction in the cost of care, an improvement of the health of the population, and an improvement of the patient care experience. The ACO is eligible to receive a share in the savings it produces in return for showing reduced costs and increased quality. (2)

An ACO — created under the Patient Protection and Accountable Care Act (PPACA) — is a group of doctors, hospitals, and/or other health care providers, who voluntarily participate in a program of at least three years duration designed to coordinate care to their Medicare patients. (3)

ACOs may take on various forms, but generally are conceived of groups of primary care physicians, specialists, and sometimes hospitals, joined in a contractual arrangement and accountable for improving the quality and affordability of care for a defined Medicare patient population and eligible for financial bonuses if performance goals are met. Interest in this concept is growing among commercial payers, Medicaid agencies, and state legislatures. (4)  

The following are some frequently asked questions for physicians to consider before becoming employed by an ACO.

HOW DOES THE PAYMENT STRUCTURE WORK FOR A CONTRACTED PHYSICIAN?

The most commonly known program is called the Medicare Shared Savings Program (MSSP). The government sets a national benchmark that represents the amount of health care dollars allocated per patient per year. The regulations require a minimum of 5,000 Medicare patients covered in order to qualify as an ACO. If the national benchmark for your region is, for example, $10,000 per patient, then an ACO with 5,000 represents a total of $50 million.

In an MSSP, the government looks at what dollars are spent per patient at the end of the year, and if the amount is less than the national benchmark, that amount is called the “shared savings.” For example, if the ACO spent $40 million in one year to treat 5,000 covered lives, then the difference between the example national benchmark and the amount spent is $10 million. The $10 million constitutes the shared savings, which is split 50/50 with the U.S. government. In the third year of participation, however, the government may require the ACO to participate in the losses incurred by the ACO if it spends more than the benchmark for that region.

CMS does not define how the money is distributed among the members of the ACO, and does not ensure that the funds are distributed to those based upon the work performed. (3)

WHO CAN PARTICIPATE IN AN ACO?

Eligibility requirements specify that an ACO may include the following groups of providers/suppliers of fee-for-service Medicare services:

  • “ACO professionals (i.e., practitioners meeting the statutory definition) in group practice arrangements,
  • Networks of individual practices of ACO professionals,
  • Partnerships or joint venture arrangements between hospitals and ACO professionals,
  • Hospitals employing ACO professionals, or
  • Other Medicare providers and suppliers as determined by the Secretary.” (1)

The Final Rule allows certain critical access hospitals, federally qualified health centers (FQHC), and rural health clinics (RHC) to participate independently in the MSSP. (3)

While an ACO must include physicians, it does not have to include hospitals. If the ACO is going to realize significant savings by achieving improved quality and outcomes, it will result in fewer inpatient days and procedures. In a physician-led ACO, the result will most likely lead to a revenue loss for the hospital. Lee Spangler, JD, vice president for medical economics at the Texas Medical Association, says hospitals are moving aggressively to create ACOs because they believe physician-led ACOs threaten their bottom line. (5)

DOES A PATIENT HAVE OPTIONS? CAN HE OR SHE SEEK CARE OUTSIDE THE MSSP ACO?

In the MSSP, beneficiaries are still part of the traditional Medicare Fee-For-Service Program and may seek care from any provider they choose. (1)

If the patient is linked to an outside primary care physician, the money spent outside the ACO would be extracted from the amount set by the national benchmark because a beneficiary is assigned to only one physician. (5)

DO I HAVE TO NOTIFY EACH MEDICARE PATIENT THAT HE/SHE IS AN ACO BENEFICIARY?

The Final Rule requires ACO providers to notify beneficiaries that they are participating in an ACO, and thus, the ACO is eligible for additional Medicare payments. The beneficiary may then choose to stay with that provider or change to another provider not part of that ACO. Each beneficiary must also be notified that his or her claims data may be shared within the ACO with the intent to coordinate care. The provider must give the beneficiary an opportunity to decline the data sharing arrangement. For those Medicare patients who choose not to decline the data sharing arrangement, the MSSP limits data sharing to purposes of the MSSP and requires compliance with applicable HIPAA laws. (1)

HOW ARE BENEFICIARIES ASSIGNED TO AN ACO?

This is a two-step process, providing the beneficiary receives at least one primary care service from a physician in the ACO:

1. “The first step assigns a beneficiary to an ACO if the beneficiary receives the plurality of his or her primary care services from primary care physicians within the ACO. Primary care physicians are defined as those with one of four specialty designations: internal medicine, general practice, family practice, and geriatric medicine or for services furnished in a federally qualified health center (FQHC) or rural health clinic (RHC), a physician included in the attestation provided by the ACO as part of its application.

2. The second step only considers beneficiaries who have not had a primary care service furnished by any primary care physician either inside or outside the ACO. Under this second step, a beneficiary is assigned to an ACO if the beneficiary received a plurality of his or her primary care services from specialist physicians and certain non-physician practitioners (nurse practitioners, clinical nurse specialists, and physician assistants) within the ACO.

A plurality means the ACO participants provided a greater proportion of primary care services, measured in terms of allowed charges, than the ACO participants in any other ACO or Medicare-enrolled provider TIN [tax identification number], but can be less than a majority of services.” (6)

HOW DOES THE MSSP DEFINE PRIMARY CARE SERVICES?

The health care common procedure coding system (HCPCS) identifies primary care services for the MSSP as a set of services using the following codes:

99201 through 99215;

99304 through 99340, and 99341 through 99350, G0402, G0438, and G0439;

Revenue center codes 0521, 0522, 0524, 0525, submitted by FQHCs for services provided before January 1, 2011, or by RHCs. (6)

AS A SPECIALIST, MAY I CONTRACT WITH MORE THAN ONE ACO?

If a specialist (other than an internal medicine, general practice, family practice, and geriatric medicine physician) submits a claim for management and evaluation under the ACO’s TIN, the specialist would be exclusive to participate in only one ACO.

While the proposed rule restricted ACO exclusivity to only primary care physicians, the Final Rule broadened the exclusivity to include specialist physicians, physician assistants (PAs), nurse practitioners (NPs), and clinical nurse specialists (CNSs) if they bill for primary care services. (7)

In addition, the wording of the contract with the ACO should be carefully reviewed for any exclusivity language that binds an individual specialist physician or group of physicians to practice with only one ACO. This could involve a hospital system that limits your ability to admit to other hospital systems.

OTHER THAN SPENDING LESS THAN THE NATIONAL BENCHMARK ON PATIENT CARE, WHAT ELSE IS REQUIRED?

Along with requirements for governing and management bodies, there are operational aspects for processes and reporting:

  • design processes to promote evidence-based medicine, patient engagement, and coordination of care;
  • develop a patient survey tool;
  • initiate a process for evaluating the health needs of the population the ACO serves;
  • implement systems to identify high-risk beneficiaries and develop individual care plans for target populations;
  • maintain a database of all ACO participants and their National Provider Identifiers; and
  • establish a compliance plan and conflict of interest policies and means to screen ACO participants. (5)

HOW CLOSELY WILL AN ACO BE MONITORED?

The final rule details a CMS monitoring plan that includes:

  • analyzing claims and specific financial and quality data;
  • analyzing quarterly and aggregated reports;
  • performing site visits;
  • performing patient surveys; and
  • conducting an audit. (1)     

DOES CMS HAVE THE POWER TO TERMINATE THE ACO’S AGREEMENT BEFORE THE END OF THE THREE YEARS?

The agreement may be terminated if CMS determines the ACO no longer meets the eligibility requirements; if the ACO is avoiding at-risk beneficiaries; or if there is a failure to meet quality requirements. (7)

IS THERE AN APPEAL PROCESS IF YOU DISAGREE WITH CMS ABOUT SHARED SAVINGS, PATIENT ASSIGNMENTS, OR QUALITY OF CARE ASSESSMENTS?

There is no appeals process. The law specifically prohibits any administrative or judicial appeals for these types of decisions. (5)

WHAT ELSE DO I NEED TO ASK AND HAVE IN WRITING BEFORE I SIGN AN ACO CONTRACT?

There needs to be a clear assignment of risk responsibilities and all parties need to know what is and is not covered.

1. Who is running the ACO and what type of medical liability coverage do they have? Is it run by a hospital or a physician group? Am I able to keep or choose my own medical liability carrier? This is a critical question to ask, as you do not want to find out after a claim is filed that you had new responsibilities that you did not understand and that you were not covered for. (8)

2. In the event of a claim, will you maintain the right to consent to a settlement? Or will the insurance carrier provided by your employer make the decision to defend or settle the case?

3. In the event that you are insured by a hospital’s insurance carrier, are you guaranteed a defense focused on your risk exposure?  Can you be assured that your career will be protected in the event of a claim or lawsuit? (9)

4. Will I still be able to use independent professional judgment? Because ACOs are charged with providing high quality and cost effective care, results will produce clinical guidelines and pathways for physicians to follow. Physicians are trained to use their independent judgment and being required to strictly following guidelines and mandates can lead to conflicts. (8)

These questions are only a sample of what to ask. Take your time and read carefully. Evaluate what it might mean to your patients, your practice, and your future before you sign an ACO contract. (5)

SOURCES

1. Department of Health and Human Services. Summary of final rule provisions for accountable care organizations under the Medicare Shared Savings Program. Medicare Learning Network. ICN 907404 November 2012.

2. Alfanso K. Accountable care organizations take shape in Texas. Texas Academy of Family Physicians. Available at http://www.tafp.org/news/tfp/summer-2012/aco. Accessed April 4, 2013.

3. Merrit M. Accountable Care Organization Facts Every Physician Should Know. Physicians Practice. March 24, 2013. Available at http://www.physicianspractice.com/blog/accountable-care-organization-facts-every-physician-should-know. Accessed June 3, 2013.

4. Sinaiko A, Rosenthal MB. Patients’ role in accountable care organizations. N Engl J Med. 2010; 363:2583-2585. December 30, 2010. Available at http://www.nejm.org/doi/full/10.1056/NEJMp1011927. Accessed April 4, 2013.

5. Ortolon K. ACO frenzy: accountable care organizations hot new product in health care. Tex Med.2010;106(12):18-25. Available at http://www.texmed.org/template.aspx?id=19398. Accessed April 4, 2013. 

6. Centers for Medicare and Medicaid Services. Frequently asked questions: Medicare Shared Savings Program. Available at https://www.cms.gov/medicare/medicare-fee-for-service-payment/sharedsavingsprogram/downloads/mssp_faqs.pdf. Accessed April 26, 2013.

7. Centers for Medicare and Medicaid Services.  New ACO participant TIN exclusivity and other entities. Frequently asked questions: Medicare Shared Savings Program. Available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/sharedsavingsprogram/Downloads/MSSP-FAQs.pdf. Accessed April 26, 2013.

8.  Brunken JD. Physicians need to explore the personal risk of joining ACOs. Physician’s Practice. January 27, 2013. Available at http://www.physicianspractice.com/blog/physicians-need-explore-personal-risk-joining-acos. Accesssed April 30, 2013. 

9. Southrey J. Are you contracting away your right to be insured by TMLT? Available at http://resources.tmlt.org/PDFs/ten-things-to-know-about-joining-an-ACO-or-NPHO.pdf. Accessed April 26, 2013.

Louise Walling can be reached at louise-walling@tmlt.org.

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