MMA News
Expert Urges Doctors to Test ACO Model
More than 150 people attended a recent MMA educational event on the physician’s role in accountable care organizations (ACOs) that featured Harold Miller, a national expert on health care delivery and payment reform. Accountable care organizations are a health care payment and delivery model in which groups of health care providers accept accountability for the cost and quality of care delivered to a defined population of patients. Instead of only receiving fee-for-service payments, ACOs might receive a mix of reimbursements including pay-for-performance payments, capitation payments, care-coordination fees, and fee-for-service payments. The model is being touted as one idea for controlling health care costs.
Miller, who is CEO of Network for Regional Health Care Improvement in Pittsburgh and executive director of the Center for Health Care Quality and Payment Reform, told the audience he sees physicians playing a central role in ACOs. By participating in them, doctors will have an opportunity to be more innovative in the way they deliver and are compensated for care. “Successful ACOs will be able to reduce costs without rationing care. I believe they can do that by keeping people well, by keeping them out of the hospital, and by allowing them to have a good experience when they do go to the hospital,” Miller said.
Test Cases
Although he admitted the ACO model is still a work in progress, Miller said several organizations have tested it out. One is physician-led Geisinger Health System in Pennsylvania, which has a program called ProvenCare through which they charge a single price for 90 days of care for several conditions and procedures including cardiac bypass surgery, low-back pain, and total hip replacement. The price covers all related pre-admission care, physician and hospital services, post-acute care, and any care related to complications or readmissions. He says Geisinger has seen better outcomes and lower costs as a result of this approach.
Miller also mentioned an orthopedic surgeon who partnered with Ingham Medical Center in Lansing, Michigan, in the late 1980s to offer knee and shoulder surgeries for a fixed price. The price included a two-year warranty. Health insurers paid 40 percent less than expected for these procedures because of a reduced need for radiology and other auxiliary services, shorter hospital stays, and fewer complications. At the same time, the surgeon and the hospital received higher payments, Miller said.
He also cited the efforts of Minnesota’s Buyers Health Care Action Group in the 1990s to have employers contract directly with health care providers as an example of a payment arrangement that could be used by an ACO.
Opportunities Abound
Miller said a number of organizations will soon have the opportunity to try out the ACO approach, as the federal health care reform law calls on Medicare to test different payment models, including ACOs. Medicare will first test a shared-savings approach, under which physicians would get a portion of any savings related to care improvements. Minnesota is scheduled to establish an ACO demonstration project by July of 2011 that will involve the state’s health care safety-net programs.
In addition, payers are open to the idea. Jim Eppel, a senior vice president at Blue Cross and Blue Shield of Minnesota who participated in a panel discussion following Miller’s talk, noted that Blue Cross is willing to explore risk arrangements with providers, whereby a provider manages care for a specific patient population within an agreed-upon budget.
Miller acknowledged that providers will face a number of challenges as they move to an ACO model. Some of those include measuring and monitoring utilization rates, coordinating relationships with hospitals and specialists, engaging in predictive modeling for high-risk patients, providing patient education, measuring quality of care, and allowing physicians time for diagnosis, treatment planning, and follow up.
There is uncertainty, however, as to whether the model will work for rural and small practices, and whether current quality measurement and risk-adjustment methods are sophisticated enough. Miller said the ACO model is supposed to avoid the pitfalls of capitation by limiting physician exposure to unpredictable events, adjusting payments based on patient risk factors, and distributing bonuses or penalties based on quality scores. But it is not clear if and how this can be accomplished.
Jeff Schiff, M.D., M.P.H., director of Minnesota’s state-run health care programs, who served on the panel, said he believes the ACO model could work in Minnesota because the state has a number of large, integrated provider organizations, a commitment to measurement through initiatives such as MN Community Measurement, and a growing health care home initiative.
Miller encouraged the audience to take advantage of what’s already happening in Minnesota and move ahead with ACOs. “Don’t wait for Washington to write the regulations,” he said. “Look at your own community and its opportunities and grab onto something and start.”
MMA Calls on Congress to Stop Looming Medicare Cuts
The MMA has joined with other physician organizations to urge Congress to stop a 23 percent cut in Medicare and TRICARE payment rates for physician services. The cut is scheduled to occur December 1. If Congress fails to act, that cut will be followed by an additional 6.5 percent reduction January 1, 2011.
The MMA joined with the American Medical Association and more than 100 other state medical associations and specialty organizations to send a letter to members of Congress calling for them to repeal the flawed Medicare sustainable growth rate (SGR) formula or pass an update for 2011.
Throughout 2010, Congress enacted a series of stop-gap measures to prevent the payment cuts from taking place for periods as short as one month. On three occasions, Congress failed to act in time and Medicare payments were cut by more than 20 percent. The Centers for Medicare and Medicaid Services reacted by holding payments until legislation to adjust the payment rates was passed. This forced practices across the country to seek loans to meet payroll expenses, lay off staff, cancel capital improvements, and postpone investments in electronic health record systems and other technology.
The letter noted that the next payment reduction is scheduled to occur at a time when physicians will be assessing whether or not to participate in Medicare. The recent back-and-forth over Medicare payments could cause some doctors to stop accepting Medicare.
MMA Launches President’s Blog
MMA President Patricia Lindholm, M.D., has started blogging. She will use the blog to talk about her experiences as president of the MMA and the theme of her presidency, physician wellness. Go to www.mnmed.org/blog to sign up to have new posts emailed to you.