The Good, Bad, and Ugly of the ACO Final Rule

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FluidEdge consulting outlines the good, the bad, and the ugly elements on the ACO Final Rule

FluidEdge combines the application of industry best practice and expertise to deliver high quality, cost effective results for customers. FluidEdge recognizes one of the Critical Success Factors in projects is the proper governance and planning process. Industry statistics clearly indicate that most projects either significantly miss their milestones or fail completely as a result of not adequately managing the project lifecycle. FluidEdge’s governance model ensures that project plans are developed in an effective and timely manner while still moving the project forward. It is important that it is understand what changes have been made with the ACO Final Rule and what the potential impact could be.

The final rule for Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program (MSSP) released on June 9th, 2015, addresses some but not all issues facing over 400 MSSP ACOs and their 7 million patients. The Centers for Medicare and Medicaid Services (CMS) continues to create incentives for ACOs to remain in the program and assume higher levels of risk. Two major highlights underscore CMS’ evolution towards alternate payment models by extending an additional three-year one-sided risk term to qualified ACOs in Track 1, and detailing rules and waivers for the new Track 3 based on the Pioneer ACO model.

CMS has also taken measures to help ACOs operate more efficiently through changes to data sharing processes, attribution policies, and benchmarking. Track 1 ACOs will benefit from a handful of the enhancements; the bulk of the proposed elements are available only to Track 2 and Track 3 ACOs. FluidEdge suspects that this will contribute to participation continuation and growth in Track 1 but only marginally impact participation in the two-sided programs. However, the additional term in Track 1 should provide sufficient time for ACOs to prepare to take on more risk, making the MSSP more sustainable over time.

It is quite a challenge to review the 600 page document, and understand what all of this means. FluidEdge has done the work for you. After reviewing the 600 page document, FluidEdge has outlined the good, the bad, and the ugly elements by the ACO track below:

Track 1:

  •     Good (biggest wins)
  •     CMS streamlined processes for data sharing between CMS and ACOs
  •     ACO medical directors no longer have to be a provider/supplier of the ACO
  •     NPs, PAs, and ACPs are counted towards beneficiary assignment
  •     ACOs no longer required to mail opt-out letters to members; instructions for opting out may be posted in facilities
  •     ACO webpages must publicly report key performance measures, savings & losses, key participants and board members, and any applicable waivers
  •     Current ACOs allowed to stay in the program and enter a second three-year term
  •     Terminated ACOs can reapply to any ACO track; however, depending on the termination date, the ACO may enter first or second agreement

Impact to your ACO

  •     Enables ACOs to operate more efficiently and build a structure that best suits its unique model
  •     More accurately maintains attribution rates when care is provided by non-physician Advanced Care Practitioners
  •     Creates incentives for ACOs to stay in the program and stimulates new participation

Bad (issues, TBD)

  •     Behavioral health and substance abuse individual patient data will still be withheld by CMS
  •     No parameters or incentives for the use of telemedicine; waivers expected to be available for Track 3 ACOs by 2017
  •     Prospective beneficiary assignment not extended
  •     Not eligible for 3-day SNF waiver

Impact to your ACO

  •     Limiting the full scope of beneficiary medical history limits the information care providers can use to deliver the best care
  •     Rural ACOs and other progressive ACOs will have care coordination challenges without telemedicine guidelines
  •     Attribution counts will vary during performance year
  •     Beneficiaries could be attributed to competing ACOs

Ugly (hard stuff to figure out)

  •     Benchmarking methodology expected to be updated to account for yet to be defined regional costs; will now use equally weighted historical benchmark years

Impact to your ACO

  •     Savings easier to attain for below market cost ACOs and harder for above market cost ACOs
  •     Potentially complex work effort for operations

Track 2:
Good (biggest wins)

  •     CMS streamlined processes for data sharing between CMS and ACOs
  •     ACO medical directors no longer have to be a provider/supplier of the ACO
  •     NPs, PAs, and ACPs are counted towards beneficiary assignment
  •     ACOs no longer required to mail opt-out letters to members; instructions for opting out may be posted in facilities
  •     ACO webpages must publicly report key performance measures, savings & losses, key participants and board members, and any applicable waivers
  •     Choice between no MSR/MLR and symmetrical MSR/MLR based on the count of assigned beneficiaries

Impact to your ACO

  •     Enables ACOs to operate more efficiently and build a structure that best suits its unique model
  •     More accurately maintains attribution rates when care is provided by non-physician Advanced Care Practitioners
  •     Increased flexibility for calculating savings

Bad (issues, TBD)

  •     Behavioral health and substance abuse individual patient data will still be withheld by CMS
  •     No parameters or incentives for the use of telemedicine; waivers expected to be available for Track 3 ACOs by 2017
  •     Prospective beneficiary assignment not extended
  •     Not eligible for 3-day SNF waiver

Impact to your ACO

  •     Limiting the full scope of beneficiary medical history limits the information care providers can use to deliver the best care
  •     Rural ACOs and other progressive ACOs will have care coordination challenges without telemedicine guidelines
  •     Attribution counts will vary during performance year
  •     Beneficiaries could be attributed to competing ACOs

Ugly (hard stuff to figure out)

  •     Benchmarking methodology expected to be updated to account for yet to be defined regional costs; will now use equally weighted historical benchmark years
  •     Must establish a repayment mechanism prior to the start of the three-year agreement period

Impact to your ACO

  •     Savings easier to attain for below market cost ACOs and harder for above market cost ACOs
  •     Potentially complex work effort for operations

Track 3:
Good (biggest wins)

  •     CMS streamlined processes for data sharing between CMS and ACOs
  •     ACO medical directors no longer have to be a provider/supplier of the ACO
  •     NPs, PAs, and ACPs are counted towards beneficiary assignment
  •     ACOs no longer required to mail opt-out letters to members; instructions for opting out may be posted in facilities
  •     ACO webpages must publicly report key performance measures, savings & losses, key participants and board members, and any applicable waivers
  •     Allows up to 75% shared savings, and is eligible to apply for certain payment waivers
  •     Beneficiaries assigned to Track 3 ACOs are not eligible to be reassigned to another ACO, regardless of where primary care services are rendered
  •     Eligible to apply for 3-day SNF waiver
  •     Choice between no MSR/MLR and symmetrical MSR/MLR based on the count of assigned beneficiaries

Impact to your ACO

  •     Enables ACOs to operate more efficiently and build a structure that best suits its unique model
  •     More accurately maintains attribution rates when care is provided by non-physician Advanced Care Practitioners
  •     Similar to Pioneer ACOs, it provides highest performance incentives
  •     Providers are offered the most flexibility to provide and coordinate care

Bad (issues, TBD)

  •     Behavioral health and substance abuse individual patient data will still be withheld by CMS
  •     No parameters or incentives for the use of telemedicine; waivers expected to be available for Track 3 ACOs by 2017

Impact to your ACO

  •     Limiting the full scope of beneficiary medical history limits the information care providers can use to deliver the best care
  •     Rural ACOs and other progressive ACOs will have care coordination challenges without telemedicine guidelines

Ugly (hard stuff to figure out)

  •     Benchmarking methodology expected to be updated to account for yet to be defined regional costs; will now use equally weighted historical benchmark years
  •     Must establish a repayment mechanism prior to the start of the three-year agreement period

Impact to your ACO

  •     Savings easier to attain for below market cost ACOs and harder for above market cost ACOs
  •     Potentially complex work effort for operations

FluidEdge Consulting has a solution for Accountable Care Organizations (ACOs) and other provider-lead organizations worried about how their bottom line will be affected after entering into alternative payment or value-based contracting models with Medicare and commercial payers http://www.fluidedgeconsulting.com. Whether it’s a Health System based ACO trying to address the impact of leakage or a Physician-Led ACO trying to lower Inpatient Hospital expenditures, this new tool helps to reach desired financial results. FluidEdge Consulting analyzes the top Medicare payment codes so ACO physicians can see the cost impact of admitting to different nearby competing facilities.

Let FluidEdge guide the pathway to success. Providing leadership, project management, and high value operational and strategic IT services. Founded in 2007, FluidEdge has become a leader in the Health Care management and IT consulting market, delivering innovative customer solutions with a highly experienced senior team. FluidEdge has been successful at solving complex concerns for the ever-evolving Health Care industry.

In 2013, Inc. Magazine ranked FluidEdge No. 775 on its Inc. 500 | 5000 list, an exclusive ranking of the nation's fastest-growing private companies. Inc. also ranked FluidEdge #60 on their list of the Top 100 Health Companies in the nation, as well as #13 among the Top 100 Pennsylvania Companies and #16 among those in the Philadelphia Metro Area.

To learn more about FluidEdge Consulting, visit http://www.fluidedgeconsulting.com.
Media Inquiries may contact Robyn Stevens at prmedia(at)live(dot)com.

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