Proposed ACO Regs Are Out!

“Patient centeredness,” “fragmentation” and “value based purchasing” are just a few of the terms that are peppered throughout the newly proposed regulations for accountable care organizations (“ACOs”).  The healthcare reform law established the Medicare Shared Savings Program for ACOs as a key way to accomplish its two core objectives:  (1) reduce healthcare costs, while (2) preserving and improving quality.  Like most new legislative ideas, the ACO regs raise lots of questions.

Who can become an ACO?

 Answer:  Pretty much any legal entity that complies with state law, has a tax ID number, applies successfully and which:

  1. Agrees to participate for three years;
  2. Cares for 5,000 Medicare patients;
  3. Is prepared to receive and distribute shared savings;

4.         Is prepared to repay shared losses (if it takes economic risk);

5.         Establishes reporting, and ensures ACO participant and ACO  provider/supplier compliance with program requirements, including the quality performance standards;

6.         Has shared governance that provides all ACO participants proportionate control over the ACO’s decision making process and includes Medicare patient representatives;

7.         Is operated and directed by Medicare-enrolled entities that directly provide health care services to Medicare patients.  ACO participants (e.g. physicians, hospitals) must have at least 75 percent control of the ACO’s governing body;

8.         Has sufficient primary care physicians to meet the primary care needs of the ACO patients;

9.         Has administrative and clinical organization and leadership;

10.       Is patient-centered though the use of such things as patient assessments and individualized care plans; and

11.       Is subject to substantial monitoring and reporting requirements, including public reporting of quality data to ensure transparency.

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Federally Funded Electronic Health Recordkeeping: Friend or Foe?

The Federal HITECH Act will provide over $20 billion to promote health care provider use of electronic health records.  Starting this year, “meaningful” EHR users can earn $44,000 under Medicare and $64,000 under Medicaid over 5 years.  Those who enroll early will benefit the most, because nearly 70% of the payments come in the program’s first 2 years.  Physicians who have engaged in PQRI and electronic prescribing in the past few years have put another $6,000 to $8,000 in their pockets.

The Federal push for electronic health records isn’t going away.  Over $7 billion has been released to fund state capacity for exchanging health information across the health care system both within and across states.  The Florida Agency for Health Care Administration received nearly $21 million to develop this state’s health information infrastructure.  The intent is to assure a fully connected national health care IT system to provide all health care providers and their patients seamless access to a patient’s medical information.

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IPAs Again

Independent practice associations (“IPAs”) are gaining momentum in response to healthcare reform and market changes responding to healthcare reform.  In an era when consultants are selling one-size-fits-all solutions, physicians have to consider IPAs as a viable option once again, but they have to fine tune their expectation to recent changes.

            In the thunderous noise wrought by talk about accountable care organizations (ACOs), physicians are scrambling to see where they might fit in the future of healthcare.  While we think those changes will be neither as severe or as pervasive as feared, we do see huge opportunities for ANY organization which can (1) reduce healthcare expenditures, and (2) improve quality.  Healthcare businesses of the future will view utilization skeptically.  Hospitals of the future will look like medical practices with beds.  Medical practices of the future will have a stake in the cost and quality of care being delivered and will view utilization skeptically. 

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Ignoring Primary Care: Obscuring the Obvious

Healthcare reform used to imply just regulatory change.  As time marches on, it also implies market change.  Most pundits agree that, whatever happens to the healthcare reform law, whether or not it is found to be unconstitutional, the healthcare business community is unleashed.  Change is afoot! 

If you follow my nahsaying on the issue, then you know I believe the expectations regarding ACOs are overblown and unrealistic.  Martians will not land here en masse, although there may be an occasional stow away on a NASA craft.  Put another way, as some others have said, ACOs are like unicorns—magical, mythical beasts that no one has ever seen.  I don’t expect many to come prancing around in Florida, at least not South Florida, anytime soon. 

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Florida Physician Strikes Out in Challenging Hospital Reappointment Denial

bylawsIn January, a Florida appellate court upheld the denial of a physician’s request to halt a hospital’s intention to deny reappointment to the medical staff.  The physician involved in the case was a member of the medical staff and was recredentialed pursuant to the hospital’s recredentialling cycle.    The doctor asked the trial court to stop the hospital from implementing the denial until the trial court fully considered the case; which request the court granted.  The appellate court, however, decided the trial court was wrong and overturned the decision.

The basis of the doctor’s claim was that the hospital didn’t follow the medical staff bylaws and that, therefore, the hospital’s decision shouldn’t be implemented, at least not until the court could have a trial-like hearing on the issue, which might take many months to schedule.  The appellate court relied on a state law granting immunity to the hospital for the denial and stated that the doctor didn’t make the proper argument that would have justified the trial court granting his request to delay implementing the decision.

Specifically, Florida law grants medical staffs the authority for reviewing applications, but is clear that the final decision rests with the hospital governing body.  Most medical staff bylaws codify the very same principle, though there is room to create more of a collaborative relationship between governing bodies and medical staffs on the issue.  Medical staffs ought to be vigilant about the wording of their medical staff bylaws, since they are considered to be a contract between them and the hospital.

In the present case, however, the doctor was ultimately denied the right to delay the hospital’s decision because he did not argue that the hospital decision involved fraud.  The case is yet another example of why medical staffs have to take a very pro active role in creating medical staff bylaws, which is no easy feat, since most physicians consider medical staff bylaw creation to be only slightly more exciting that paint drying contests.

Florida Seeks Relief from Healthcare Reform Provision

One of the requirements of the national healthcare reform law is that health insurers must spend at least 80% of their premiums on delivering healthcare services.  The current requirements (so called “medical loss ratios”) are 65% for traditional insurers and 70% for HMOs.  Earlier this month, state Insurance Commissioner Kevin McCarty requested US HHHS Secretary Kathleen Sebelius to delay the provision of the healthcare reform law that requires health insurers to spend 80% of their premiums on providing healthcare services.  If granted, the delay would allow insurers to meet the 60% and 70% established levels.  The reason for Commissioner McCarty’s request:  belief that the 80% requirement would decimate the health insurance market in Florida.

It is well known that Governor Scott campaigned against the healthcare reform law.  Similar requests for waivers can be expected around the country, as well as legal challenges to the law’s constitutionality.  Interestingly, there has been no delay in the state’s desire to curtail physician and hospital expenditures and their primary move in that direction, the quasi privatization of the state Medicaid program and introduction of a competitive bid process.  Though most will feel the squeeze, there is clear opportunity for those physicians and other healthcare business people willing to assume more economic and clinical risk.

Right on!

This is absolutely dead on!  ACO theorists and consultants are so wrapped up in proving the model or selling services, as the case may be, that they fail to miss some core deficiencies, which include (1) anti-competitive effect of COS, (2) the hospital conflict of interest, and (3) the primary core fallacy.

ACOs are big business.  The capital and organizational requirements alone are staggering.  The nature of the “beast” will mean a collapse in the number of delivery systems and a strengthening of  the role that big business, chiefly hospital systems, play in delivering medical care.   

Hospitals have always seen the direct link between bodies in beds and profits.  ACOs are theoretically forcing risk based compensation and quality measures on care deliverers in a way that is thought to create economic efficiencies, but now that it is clear that hospital systems will lead ACO development, what’s to stop them from pumping patients into beds, thus frustrating the reduction of healthcare costs?  The conflict is between ACO leaders (hospital systems) that want to maintain profitability through increasing admissions and those that are committed to squeezing admissions into those which are most medically appropriate.  At the end of the day, ACO leading hospital systems may find themselves in the conundrum that Humana did when they were in the hospital business (get patients admitted!) and also the health insurance business (keep patients from being admitted!).

The ACO healthcare delivery model is once again (from the 90s) based on a primary care core.  And yet, primary care shortages are rampant around the country.  The answer is to “extend” physician expertise via the use of PAs, NPs and the like.  Moreover, as medicine has become increasingly specialized and the need for specialist consults and intervention has risen, so has cost.  The primary care core depends thus on an insufficient number of professionals who lack the professional self-sufficiency necessary to reduce specialist intervention and related costs.

The beat goes on!

http://www.healthleadersmedia.com/page-3/LED-261056/5-Reasons-Why-ACOs-Could-Fail