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Accountable Care Organization Rules Come Out – Part II

Accountable Care Organization Rules Come Out – Part II

Yesterday, we analyzed the cost-effectiveness and shared savings of ACOs as defined by CMS’ proposed rules governing their establishment. Today, we will look at the quality standards included in the regulations.

CMS is taking a very aggressive approach on quality standards for ACOs. Even if an organization achieves cost-savings, over time no payment will be made unless quality metrics are met.

The rules establish quality performance measures and a methodology for linking them with financial performance. They also require the ACO to have in place procedures and processes to promote evidence-based medicine and beneficiary engagement.

The quality measures outlined in the drafted regulations are among the most rigorous we have seen and may end up being judged as more expansive than even the Medicare Advantage Star rating system. They touch upon four main areas:

  1. HEDIS outcomes
  2. CAHPS satisfaction
  3. Clinical/disease management infrastructure
  4. Hospital-based quality interventions and after care

In this last area, the ACO is held responsible for poor hospital outcomes, so participating physicians and hospitals will need to work together to monitor stays and after care. Interestingly, some of these hospital-type measures tie to other FFS reforms in PPACA that force hospitals to ensure better clinical monitoring and outcomes or risk losing revenues in numerous areas.

More specifically, for 2012 CMS is proposing to utilize 65 measures to assess ACO quality that include five domains: Patient Experience of Care, Care Coordination, Patient Safety, Preventive Health and At-Risk Population/Frail Elderly Health. Several of the proposed quality measures align with those used in other CMS programs, such as PQRI, EHR and Hospital Inpatient Quality Reporting Program. Others also include CAHPS and HEDIS, as well as Hospital Acquired Conditions (HAC) and AHRQ Patient Safety Indicator (PSI) 90 Complication.

Measures will be reported through a combination of claims submission and data collection using a tool designed for clinical quality measure reporting and surveys. The first quality performance period is Jan. 1-Dec. 31, 2012.

Performance on each measure will be scored on a linear points scale and roll up into five scores for each of the five domains. The percentage of points earned for each domain will be aggregated using an equal weighting method to arrive at a single percentage. This will be applied to the maximum sharing rate for which the ACO is eligible. Thus, over time, the level of quality provided through the ACO will dictate how much shared-savings will accrue.

For the first year, to achieve shared savings and qualify for upside savings, an ACO must report the quality measures completely and accurately. There is no minimum number or threshold that an ACO must meet. However, ACOs will still receive a score to help define future benchmarks.

The proposed rule makes clear how committed CMS is to the success of ACOs, which it sees as one of the main ways to rein in runaway utilization and costs and to improve Medicare’s quality track record. To achieve shared savings benchmarks and quality metrics, ACOs will have to have a strong clinical infrastructure and the capacity to share data with various providers in the system.

CMS’ 500 pages of proposed regulations make it clear that ACO participation it is not for the faint-hearted.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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