6/28/2011: ACOwatch.com 
Remarks as prepared for delivery by Secretary Sebelius on June 27th, 2011, Washington, DC.
“Improving care is clearly the best approach to addressing rising costs – especially compared to recent proposals that would simply cut Medicare and Medicaid, without doing anything to address underlying growth in health care spending. But it’s also clear that we are not improving fast enough. So our challenge is to speed it up.”
Read more here: http://acowatch.com/
We have probably never seen so much enthusiasm and spending on anything in our history as we are on healthcare reform. The point is to slow spending and improve quality by incentivizing cost-saving, quality-enhancing behavior. And the Accountable Care Organization is the new healthcare delivery model designed to save us from our greedy, over-utilizing selves. Here’s how it works:
First, you take a lot of primary care physicians and tell them they will get more money by (1) taking an expanded role in taking care of patients, and (2) reducing the expenses associated with that care. Then you tell them two really special things: first, you tell them “Uh, since we’re afraid that you will improperly reduce the amount of care the patients need, we won’t tell you which patients are in an ACO and which are not.” Second, you tell them “We really mean it when we tell you that we intend for you to make more money, but we won’t tell you exactly how we’re gonna do that. Trust us, ok?”
Second, you empower physicians to lead the charge. After all, they’re the only participants in ACOs that smart people think can control costs and quality. And you do this by telling them to (1) shell out about $26 Million to form an ACO, (2) go to Wharton and get an MBA, (3) educate themselves about all the intricacies of information technology and work out the kinks involved in implementing electronic medical records, and (4) keep taking care of those patients while you do all this. Finally, you keep the identity of patients secret from the physicians so there is no way to prepare care plans that take into account the diseases faced by the patients. No problem.
Third, you let patients run amok. They can go into an ACO…or not. They can go in and out of ACOs. They’re like kids that way, but they’re responsible for reading the 397 pages of ACO regs and then deciding whether they like the idea of not. Oh, and they have absolutely no incentive to sign up for ACO care. And why would they? “Hey, how about you go with this ACO, which will get more money if they spend less on you. How’s that sound?” How could this possibly be sold to Medicare patients? “This ACO will get paid for getting you well! Your primary care doctor that you’ve trusted for 20 years and who helps you get and stay healthy…that person doesn’t have the same incentive to get you well.” NOT.
Simplicity. There is none. Never before in our history have we seen something so simple (patient rationing) become so complicated (rationing = less expensive care). And so many acronyms and governmental departments and positions too! There are one sided models, two sided models and now a Pioneer model, for those who are especially adventurous. And did I mention that the basis for healthcare reform, the one that only the state of Washington has the courage to articulate, is really just rationing?
Troubling to pretty much everyone. Yes. Except for policy makers, there has yet to be any significant support for anything other than the IDEA that healthcare should cost less and be more outcome oriented. Even the Mayo, Geisinger and Cleveland systems have all politely declined at this point.
Unlimited flexibility. Yes, this is true, especially as it relates to patients. See, patients can be in a cost saving ACO or not. They can go in and out of them and the ACO will bear the cost. That’s right: patients can go in and out of them—ACO, non-ACO, and yet only the ACO will be penalized for cost increases. Let’s see, the ACO model is the cost saving model. And the plan is to allow patients to choose for society to save money or not. And the patients have zero incentives for participating in an ACO. And who is responsible for the behavior of these patients? Uh, well, we all are.
Patient accountability. This is completely lacking in the ACO model. There is absolutely nothing to incentivize patients for making healthy decisions and to punish them for making unhealthy ones. Also primary care driven. Not really. There aren’t enough to go around, but some guy who knows a doctor is free to see you now. Oh, also pro competitive, meaning everyone will wanna be an ACO, so that will create competition in the market and a tremendous drive to drive costs down and quality up. Ok, not really, but wouldn’t it be nice if that COULD happen. In fact, healthcare reform is functioning to do one sure thing—reduce competition, since only the biggest, strongest organizations can afford to compete or to be one.
Inexpensive. Nah. While the initial cost projections suggested about a $2 Million price tag for forming one, they are now up in the $12 to 26 Million range.
Direct and demonstrative. NOT. The entire healthcare reform delivery plan is like pushing a mouse through a maze by its tail.
Healthcare reform is like Alice in Wonderland at its best. It only makes sense on mind-altering drugs. Moreover, the shizo message from our policymakers on the whole issue is dumbfounding. “We are committed to lowering healthcare costs. ACOs will do this. Patients can be in them…or not.” Some legislators think they’ve created a panacea with ACOs, but then don’t want to compel them. It’s just political nonsense.
Look, slowing healthcare cost creep and quality enhancement are good things. We all (patients included) ought to be outcome driven and focused so that the end result is actually healthcare. ACOs just don’t and won’t do that, which may have something to do with the recent announcement by Mayo, Cleveland and Geisinger that they’re really not that interested in playing with them.
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.
Healthcare reform alone is enough of a Rubik’s Cube, but CMS and the OIG has been especially well-staffed these days, enough so that their offices are turning out new laws and interpretations at an alarming rate. Though it may seem overwhelming, physicians need to work harder than ever to stay on top of the changes.
Health Information Technology (HIT)
The physician incentive payments/penalty provisions that piggybacked their way onto the federal healthcare reform law have physicians concerned and scrambling. IT vendors and advisors are drawn to the opportunities the new law has created; and physicians need to be educated and wise.
The so called “HITECH” provisions of the federal healthcare reform law create a pot of about $34 Billion worth of incentive payments for eligible professionals and hospitals that attain meaningful use of certified electronic healthcare records (EHR) technology. To obtain any money, eligible parties will have to demonstrate full compliance no later than 2015, and earlier (2011!) if they want the full benefit. Medicare has allocated roughly $44K worth of incentives for each compliant physician; and Medicaid offers another $20K roughly, but the real incentive is not the money; it’s the fact that financial penalties apply if you don’t comply by 2015.
Financial incentives are available for eligible professionals who use certified HIT which satisfies the “meaningful use” regulations, which were issued August 2010. They are complex and limited by time lines which industry insiders claim to be unreachable. Vendors are, nevertheless, selling and physicians are buying software and solutions in hopes they will qualify for the incentive payments. Physicians should make sure that their contracts with such vendors protect them by requiring the solutions to be certified and meet the meaningful use guidelines.
Healthcare Reform
Though everyone is scared about how healthcare reform will unfold, remembering the past may help. The fact is the concepts in the Act are not new. For instance, IPAs, PHOs, capitation and the like are the cornerstone of the reform. Physicians have seen these before, though not on a government mandated basis. Moreover, where those models were once purely financial, there is a heavy clinical outcome component woven into the regulations.
No matter how one views it, the Act creates huge opportunities for physicians and others. Risk based compensated Accountable Care Organizations (ACOs) are slated to be the new platform for healthcare delivery. Good news for PCPs: regulators and think tankers think that physicians, especially primary care physicians, are the best positioned to lead the ACO development charge. That said, the form the ACOs will take is completely unclear and is expected to unfold over a period of ten years. Like technology vendors, physicians have to be wary of anyone who has something to sell at this time. One size does not fit all! IPAs might be a great vehicle to start. Capitated models are familiar, but a bundled payment methodology may work better in some circumstances. One thing that is certain: whatever business model a physician explores ought to be able to bear financial risk (e.g. capitation or bundled payments) and measure clinical outcomes, because both elements will form the basis of payments of the future. Though specifics about the future of healthcare are unavailable, the following is a fair list of what’s likely:
OIG and CMS Pronouncements
May was a busy month for healthcare regulators. SMS issues the Ambulatory Surgery Center Waiting Area Separation Requirements, which has had the effect of preventing creative business opportunities between ACSs and other healthcare businesses.
Additionally, the OIG recently issued an Advisory Opinion which makes it very difficult for imaging centers to do prior authorizations for referring physicians.
Fraud and Abuse
If the first 2/3 of 2010 are any indication of the future in healthcare law, healthcare business professionals have a lot to keep up with. Enforcement by the Justice Department and the Office of Inspector General is in full swing. Already, for instance, nearly $2 million has been repaid as the result of employing a person who has been excluded from a federal healthcare program. Examples include:
Read On at www.FloridaHealthcareLawFirm.com