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Questions loom regarding the future and the implementation of ACOs
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While accountable care organizations aim to improve the quality of health care and reduce associated costs through coordinated care, some physicians and health policy experts have raised concerns about how these systems will work, where specialists fit in and how these organizations differ from capitation programs of the past.
“It is going to be an interesting scenario, how it all turns out, and I am not convinced that the [accountable care organization] ACO concept is really going to work, nor do I think it is going to be successful,” Orthopedics Today Business of Orthopedics Section Editor, Jack M. Bert, MD, said.
In the ACO model, a group of primary care physicians, hospitals and other professionals accept joint responsibility for health care costs and the quality of care for their patients. The model seeks to base payment on value, instead of volume.
Under the Medicare Shared Savings Program scheduled to begin Jan. 12, 2012, ACOs that meet or exceed performance standards of care and decrease growth in heath care spending would be eligible to receive a share of the savings they make below individual benchmarks set by Centers for Medicare & Medicaid Services (CMS). According to provisions of a proposed rule by CMS, ACOs are responsible for self-assessment, monitoring and reporting of care. They must also accept responsibility for at least 5,000 Medicare beneficiaries and agree to participate in the Shared Savings Program for 3 years.
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Image: Bert JM |
In addition to the possibility of being rewarded for meeting quality performance standards, the proposed rule calls for participating ACOs to repay Medicare for a portion of expenditures above their individual benchmarks.
Under current proposals, ACOs will be assessed on 65 quality measures pertaining to the areas of patients’ experience of care, patient safety, health of the frail and elderly/at-risk population and preventative health.
CMS is expected to issue a final rule on ACOs in October.
“There is a lot of uncertainty,” Craig D. Tifford, MD, an orthopedist with Premier Medical Group, PC, in Stamford, Conn., told Orthopedics Today. “That is more than anything for everybody — what it is going to look like and how it is going to impact us.”
Potential gains
Tifford and Bert cited efficiency and quantitative measures of quality of care as potential benefits of ACOs.
“The advantages are streamlining health care delivery, focusing more on best outcomes, mitigating costs and streamlining things for the patient and provider,” Tifford said.
Bert added, “[It] is going to require platforms to allow for outcomes to be reviewed i.e., to measure quality of care by performance based upon outcomes.”
However, he noted the current proposals regarding ACOs focus on primary care physicians and practitioners. “We are not going to be able to do an ACO with just a single specialty group,” he said. “It is going to require a multispecialty [approach].”
The role of orthopedists
According to David M. Glaser, JD, a health care attorney at Fredrikson & Byron in Minneapolis, Minn., the proposed rules by CMS do not detail the role of specialists in ACOs.
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“The rules do not discuss specialists at all,” he said. “It is set up as a primary care delivery system but, obviously, a lot of expense in the world is in the specialty side of things.”
Therefore specialists such as orthopedists, will likely have to contract with hospitals, he said.
A piece of the pie
Glaser also highlighted the ACO model as a mechanism to bundle payments.
“One of the things that is going to happen is the government is going to try to say here is a pot of money, you care providers — and that will include hospitals, doctors, device companies, maybe drug companies — you fight amongst yourselves,” Glaser, who is an Orthopedics Today Editorial Board member, said. “Here is our flat payment; you do with it what you wish. If that really comes to fruition, it is going to be important for doctors to be able to hold their own in any negotiations.”
Bert called ACOs a “back to the future” concept, mirroring capitation programs in which proponents called for a fixed monthly payment for patient care.
“I am concerned and somewhat pessimistic because of the nature of the beast,” he said. “It would almost be a return to a capitation system, which failed miserably in the 1980s.”
Capitation?
However, Glaser noted, “It is clear the government is saying, no it is not really capitation, but what scares me about the whole notion of ACOs is that is sounds like it is an attempt to pay people sort of a fixed amount for the care or ‘share in’ savings. If you provide less care than we expect for someone, you share in the money.”
Although the concept is popular in Europe, Bert said this “is going to be a disaster for the specialist [in the United States], if it ever does occur.” He noted in Italy, the operating surgeon receives 10% of the reimbursement to the hospital if it is a government-insured patient as opposed to 25% of the reimbursement to the hospital if it is a patient with private insurance.
B. Sonny, Bal, MD, JD, MBA, also echoed concern about how the reimbursement funds will be distributed and likened the method to a Ponzi scheme targeted at job creation and large paychecks to managers claiming to deliver value.
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“We have been there before; one only has to review the history of health care delivery in the past 3 decades, and the financial train wreck facing our nation to take off the rose-colored glasses,” Bal, who is also an Orthopedics Today Editorial Board member, said. “Once the money is sucked dry, doctors will be back to taking care of patients, and the bureaucrats will be back to coming up with yet another scheme and acronym to reform health care. Lost in this shuffle are the fundamental concepts of supply, demand, consumerism, pricing, competitive markets and related concepts that our nation was founded on, and that we keep moving away from. Sorry to be a skeptic, but it does not take a genius to figure out that the ACO concept is nothing new at all.”
Physician autonomy
Some physicians have also expressed concern that such organizations will threaten private practices and the autonomy of practitioners.
“We are going to be forced to negotiate with hospitals and become part of a multispecialty pool,” Bert said. “I think the autonomous private practice of orthopedics is going to be more difficult as a result. Furthermore, the majority of fellows completing their fellowship are becoming hospital employees instead of electing to enter private practice as evidenced by the fact that 60% to 65% of sports medicine fellows this past year elected hospital employment rather than joining a private practice group.”
However, Bal said that ACOs will probably not have much of an impact on physician autonomy, “if one is naive enough to believe the concept at face value; the goal is to let specialty doctors do what they do, but to control costs by better coordinating care and leveraging information technology to do so. Where the bureaucracy ultimately stops is where the rubber hits the road, i.e., where care is actually delivered. Outside the exam room though, I think orthopedists will see a changed landscape with new players, consultants, [information technology] IT specialists, medical record managers, care coordinators and others.”
Tifford said that maintaining a degree of autonomy will be paramount if an orthopedist enters into a contract with a hospital in order to participate in an ACO.
“At my institution, the physician network is governed by a physician-only board of directors and works in conjunction or parallel with the parent institution as opposed to a fully employed salaried physician,” he said. “Also, look for the ability that if the arrangement does not work out between the physician and group of physicians and the organization, that there is a fair way to get out.”
Bal warned that contracts with hospitals are usually lucrative “at first blush” then, hospitals look to chip away at physician compensation to save money. Before entering a contract, he cautioned orthopedists to look at the “downstream effects” and pay “attention to compensation and incentive schemes, long-term stability of earnings and benefits, and how much power the other party has to alter the contract in their favor.”
Participation and rights
In anticipation of ACOs, Tifford’s institution has set up an ACO committee and is running a pilot program.
“The process in which an institution or group needs to go through to become an ACO is extraordinarily cumbersome and almost at first glance overwhelming from an implementation perspective,” he said.
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To illustrate the cost and potential barriers to participate in an ACO, Bert cited the “meaningful use” requirement by CMS. According to information from the American Medical Association, 50% of primary care physicians in an ACO must demonstrate meaningful use of electronic medical records (EMRs) by the second year of the Medicare Shared Savings Program.
“EMR is very expensive,” Bert said. “The meaningful use requirement is going to be a difficult goal to attain because of the fact that it is very expensive. In most cases, it is going to be more costly to set up the system than what the physician group will get reimbursed even if meaningful use is ever achieved.”
Once involved in an ACO, Glaser noted current law denies entities the right to appeal decisions made by CMS regarding six items — among them, the termination of an ACO and the decision of whether an ACO can partake in shared savings.
“The decision by the agency is final, and that should scare people. The decisions are not always exercised improperly by the government or by the Medicare contractors, but at times they are, and the idea that you can’t get your day in front of a judge is stunning,” Glaser said.
Future of ACOs
Glaser expects the buzz around ACOs to fizzle out.
“There is not that much upside potential,” Glaser said. “There is a small amount of savings, there is a bit of risk, and there are huge administrative headaches.” He added: “When major players in the health care system say it is too complicated to do it, the regulations are too complicated and the reward is too small, [the government] going to have to tweak it like mad in order to get anyone in there.”
According to Bal, the future of ACOs include “early enthusiasm, bright-eyed consultants (some already making $25,000 per day in this racket, if you believe the websites that describe ACOs), savvy hospitals and their administrators making serious money, monopolistic companies selling a lot of software and support services, and data showing that ACOs were the best thing ever; followed by a reality check, and a slow and natural death as befits any scheme whereby bureaucrats throw money at the top of any pyramid, and hope for nice things to come out at the bottom.”
Tifford expects that the concept of ACOs will morph because of these challenges.
“I think it has the potential [to increase health care quality and decrease costs], but I also think that it has the potential to be disastrous. It has to work the right way or it is going to severely affect physicians in the way that they practice, as far as compensation and autonomy.” — by Gina Brockenbrough, MA
References:
- B. Sonny Bal, MD, JD, MBA, can be reached at Missouri Orthopaedic Institute, 1100 Virginia Ave., Columbia, MO 65212; 573-882-6762; email: balB@health.missouri.edu.
- Jack M. Bert, MD, can be reached at 5829 Woodlane Bay, Woodbury, MN 55129; 651-491-9303; email: bertx001@tc.umn.edu.
- Craig D. Tifford, MD, can be reached at 31 Strawberry Hill Ave., Stamford, CT 06902; 203-325-8888; email: mdtiff@optonline.net.
- David M. Glaser, JD, can be reached at Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402; 612-492-7143; email: dglaser@fredlaw.com.
- Disclosures: Bal, Bert, Glaser and Tifford have no relevant financial disclosures.
What do orthopedic practices stand to lose or gain as accountable care organizations (ACOs) begin participating in the Medicare Shared Savings Program?
More questions than answers
The potential losses include:
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- Start-up costs — The average start-up and organizational creation costs in 10 pilot programs was more than $1.5 million. Kevin J. Bozic, MD, MBA, in the American Academy of Orthopaedic Surgeons’ Accountable Care Organizations: A Primer for Orthopaedic Surgeons wrote, “Additionally, ACOs require technology platforms and systems that will enable data gathering, data integration, and public reporting of quality and cost outcomes. Many providers do not have this level of sophistication built into their current systems. Strategic relationships could help fill these technology gaps. Eventually, with input from Medicare, individual state departments of insurance and managed care will likely require licensure for ACOs as they grow to take on more of the risk burden.”
- Sixty percent of orthopedic surgeons are employed physicians. The ACO model works better if the providers are in the same organization. For employed physicians, this is a comfortable model. Traditional private practice orthopedic surgeons may be forced into a new practice situation.
- Capitation — If this model is capitation in a new way, the care incentives are completely changed. In his ORTHOSuperSite.com blog, David M. Glaser, JD, suggests, “The premise behind ACOs is that the current insurance system ‘incentivizes’ physicians to keep patients sick, rather than to keep patients well. While I am a firm believer that people respond to incentives, there is something terribly insulting about the notion that the economic triumphs over others, rendering physicians unable to determine whether patients need care.” The ACO/capitation asks the physician to cut cost, not necessarily to provide the best care. This is a very difficult position for physicians and surgeons. Bozic notes, “in an ACO, the driving force should be to avoid a poor outcome. The financial pressure would be to ensure communication between surgeon and [primary care physician] PCP.”
The potential gains include:
- If an orthopedist joins an ACO, then there may be improved access to patients. A surgeon may be able to contract with several ACOs (created by PCPs).
- Physicians in a cohesive ACO group may have a better negotiating with hospitals and non-CMS payers.
- lThe move to single payment models for surgical procedures leaves the surgeon at risk for underpayment. An active ACO could clarify and protect surgeons in a single payment model.
There are still more questions than answers on how profitable this model can be and if this plan will actually improve care and decrease costs. The data collection and reporting requirements will definitely change the way we see and care for patients.
William R. Beach, MD, is an Orthopedics Today
Editorial Board member and orthopedic surgeon at Tuckahoe Orthopedics in
Richmond, Va.
Disclosure: Beach has no relevant financial
disclosures.
References:
- American Academy of Orthopaedic Surgeons Health Care Systems Committee. Accountable Care Organizations: A Primer for Orthopaedic Surgeons. 2011. Accessed at: www.aaos.org/member/prac_manag/accountable_care.pdf
- www.ORTHOSuperSite.com
A loss for the speciality
Orthopedics loses again from my perspective.
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The gains that large orthopedic practices were hoping to realize by forming their own specialty ACOs have been squashed by the ACO regulations that were recently passed. To qualify as an ACO and take advantage of the proposed new payment mechanisms, groups must now provide primary care services for at least 5,000 patients. This requirement essentially eliminates the concept of specialty ACOs in general, not just for orthopedics.
The practice models best able to cope with the primary care requirement (as well as the provision to report 65 quality indicators) seem to be the Kaiser/HMO type systems and hospital-based ACOs. Two major orthopedic groups in my practice area have recently been bought out by hospitals, and several of my former partners from our previous multi-specialty orthopedic group were recruited to Kaiser. These entities are clearly positioning themselves to be ACOs, thus controlling the reimbursement “purse strings” and largely transferring any last semblance of control of physician reimbursement away from the orthopedic surgeon.
Insurance companies have been using a different strategy to fulfill the ACO regulations in my opinion. The insurance company “preferred provider networks” of physicians (both primary care and specialists) as well as hospitals, home care providers and long-term care facilities, could serve as a framework to form an ACO, but still leave the orthopedic surgeon at least a modicum of independence.
On balance, my view is that these alliances for the purpose of forming ACOs are a net loss for orthopedic surgeons. Independence, control of numerous patient care and practice issues, and uncertainty about long-term reimbursement represent several of the negatives which weigh heavily on the “loss” side of the scale.
David A. Wong, MD, MSc, FRCS(C), is an Orthopedics
Today Editorial Board member , co-chairman for the North American Spine
Society’s Patient Safety Task Force, Performance Measures Advisory
Committee and Value Task Force, and director of the Advanced Center for Spinal
Microsurgery at Presbyterian/St. Luke’s Medical Center in Denver.
Disclosure: Wong has no relevant financial disclosures.