AAMC Teleconference: ACO Final Regulation. November 16, 2011
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1 AAMC Teleconference: ACO Final Regulation November 16, 2011
2 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 2
3 Final Rule Overview Published in Federal Register Nov. 2, 2011 OIG, DOJ/FTC and IRS released companion documents same day CMS/OIG issued an interim final rule on waivers of fraud and abuse laws; comments are due January 3, waivers available; criteria for qualifying loosened DOJ/FTC: anti-trust no longer requires mandatory review; safety zone created IRS on tax-exempt status: finalized proposed notice Documents available on AAMC website: 3
4 What s an ACO?... a shared savings program that promotes accountability for a patient population and coordinates items and services under Parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery of the Affordable Care Act 4
5 Who Can Form an ACO? Alone or in combination: ACO professionals in a group practice Networks of individual practices Partnerships or jt. Ventures between hospitals and ACO professionals Hospitals employing ACO professionals CAHs RHCs FQHCs 5
6 Who s an ACO Professional? Physician PA NP Clinical nurse specialist 6
7 What are the performance periods? Agreement is for 3 years + 2 possibilities for starting in 2012: April 1, 2012 First performance year is 21 months July 1, 2012 First performance year is 18 months In 2013 and subsequent years, ACOs will begin on January 1 and have a 3 year agreement 7
8 MSSP vs. CMMI Initiatives The Medicare Shared Savings Program (MSSP) is authorized under section 3022 of the Affordable Care Act (ACA) MSSP ACO Section 3021 of the ACA created the CMS Innovation Center (CMMI). CMMI was created to test innovative health care payment and service delivery models in Medicare, Medicaid, and CHIP. The Secretary has broad authority in determining models to be tested by CMMI. ACO Advance Payment Model Pioneer ACO Bundled Payments for Care Improvement Initiative 8
9 ACO Advance Payment Model Also in conjunction with the release of the ACO final rule, CMMI introduced the ACO Advance Payment Model which would offer funding for organizations in need of capital to make investments for coordinating care. Allows for pre-payment of expected shared savings to ACOs meeting specified criteria, such as being an ACO that does not include any inpatient facilities AND have less than $50 million in total annual revenue 9
10 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 10
11 Attribution Changes More prospective information 2-step assignment includes specialists Exclusivity of assignment TINs 11
12 Benchmark Changes Removal of IME/DSH from benchmark and performance period calculation! 12 Risk/cost updates to benchmark adjustments based on Changes within continuously eligible patients Newly attributed patients Distribution of patients within 4 categories: ESRD Disabled Aged/Dual eligible Aged/non-dual eligible
13 Other Payment Changes Track 1: shared savings only, no risk First dollar savings for one-sided model No additional shared savings for FQHC, RHC Maximum savings increased Removed withhold requirements Limitation on loss requirements Option for interim payments for ACOs starting in
14 Two ACO Payment Options 1-Sided Model Risk Upside only (savings) Removed requirement to transition to 2-sided model in yr 3 Minimum Savings Rate (MSR) to Get $$ Shared Savings a % (varies by pop. size) Up to 50% (based on quality score) of all savings 2-Sided Model Upside (savings) AND Downside (losses) 2.0% (regardless of size) Up to 60% (based on quality score) of all savings Maximum Savings 10.0% of benchmark 15.0% of benchmark Loss Sharing N/A If losses are > 2%; shared loss rate = (1 - Shared Savings Rate), with max of 60% on all losses Loss Cap N/A Year 1: 5%; Year 2: 7.5%; Year 3: 10% Withhold b None None 14 a Removed additional bonus for include FQHC and RHCs. These entities can form their own ACO b Must document repayment mechanism for 2-sided model or for 1-sided model that seeks interim payments.
15 Interim Payment For ACOs that start April 1 or July 1 of 2012: Option for interim payment calculation Quality based on reporting GPRO quality data for CY2012 Cost based on first 12 months of participation Final reconciliation after the December 2013 Must repay CMS if the interim payments are larger than final reconciliation 15
16 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 16
17 Beneficiary Attribution Prospective (sort of) ACOs receive quarterly reports identifying who would be assigned based on current utilization No information from CMS on the expected time lag to receive the quarterly reports Reconciliation at the end of each performance year based on actual utilization. 17
18 2 Step Assignment Approach Assigned based on plurality of primary care services delivered by ACO primary care physicians (IM, FM, GP, Geriatrics) If no primary care services from primary care physicians, assign based on primary care services provided by other clinicians (i.e. all specialists and advanced practice practitioners) The calculation is determined by summing charges at the ACO level (collection of TINs) or non-aco tax identification number (TIN) level 18
19 TIN Assignment ACO TIN used for beneficiary assignment must be exclusive to one ACO If specialists and primary care physicians bill under the same TIN, then all physicians would be exclusive to a single ACO ACOs can both add and remove TINs from the ACO during the agreement period 19
20 Primary Care Services The final regulation defines primary care services as the set of services identified by the following HCPCS codes (plus some revenue codes for RHCs/FQHCs): Subset of E/M codes (office/outpatient, nursing facilities, rest home, assisted living, home health visits, Welcome to Medicare and wellness visits) HCPCS codes through 99215, through 99340, and through 99350, G0402, G0438, and G
21 Example of 2-step Assignment: Beneficiary only sees primary care physicians Physician Total Allowed Charges for Primary Care Services Percent of Patient s Primary Care Services ACO Family Practice (4 visits) $170 53% Non-ACO Geriatrician (4 visits) $160 47% Total $330 In this example, the beneficiary is assigned to ACO PCP. 21
22 Example 2: Beneficiary sees non- ACO primary care physician and ACO specialist. Physician Total Allowed Charges for Primary Care Services Percent of Patient s Primary Care Services Non-ACO Geriatrician $150 20% ACO Cardiologist $600 80% Total $ In this example, beneficiary is assigned to the non-aco geriatrician.
23 Example 3: Beneficiary only sees non-pcp professionals Physician Total Allowed Charges for Primary Care Services Non-ACO Cardiologist $200 42% Percent of Patient s Primary Care Services ACO Dermatologist $175 37% ACO Nurse Practitioner $100 21% Total $475 Assigned to ACO based on plurality of Primary Care Services (58%) Beneficiary is assigned to Dermatologist and NP s ACO 23
24 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Requirements Legal 24
25 Establishing the Benchmark Finalizes proposal to use 3 most recent available years for Parts A and B FFS per beneficiary spending for those beneficiaries that would have been assigned based on ACO participants TINs and using the assignment methodology Calculation excludes IME and DSH payments Calculate benchmark expenditures by the following categories: ESRD Disabled Aged/Dual Eligible Aged/Non-Dual Eligible 25
26 Why Exclude IME Example Scenario Benchmark = $100 Performance Year = $95 $5 IME $0 No IME $95 Care at $95 teaching hospital Care at nonteaching hospital ACO saves $5, but not by improving overall efficiency of care 26
27 27 Benchmark Trending/Update Factor Trend: Bring benchmark year 1 and 2 dollars to benchmark year 3 dollars National growth (% rate) Make separate calculations for each of the 4 beneficiary categories Restate BY1 and BY2 trended and risk adjusted expenditures in BY3 proportions of the 4 categories of beneficiaries Weighting: Year 3: 60%, Year 2: 30%, Year 1: 10% Update: Updating the benchmark during the agreement period National growth (flat dollar amount); separate update for each beneficiary category
28 Expenditure Adjustments Commenters, including MedPAC, requested a number of adjustments to exclude certain payments including: IME and DSH, geographic adjusters, GPCI, HVBP bonuses, transitional pass-through payments for new tech, primary care incentive payments, etc. The only adjustment adopted in final rule is exclusion of IME and DSH DGME not paid under Part A claims, therefore automatically excluded CMS rationale was that, unlike IME and DSH adjustments, the Agency does not believe these other payments would result in an incentive to steer patients to or away from certain providers 28
29 Risk Adjustment Benchmark: ACO benchmark adjusted using CMS-HCC model (used in MA) Performance period: Newly assigned beneficiaries: CMS-HCC risk score to adjust for changes in severity and case mix of this population Continuously assigned beneficiaries: risk adjust for demographic factors; if HCC score is lower in performance year for this population, CMS will adjust for changes in severity and case mix 29
30 Categories of Beneficiaries Beneficiaries will be divided into 4 categories: ESRD Disabled Aged/Dual Eligible Aged/Non-Dual Eligible A benchmark will be set for each of these 4 categories of beneficiaries In adjusting for health status and demographic changes, CMS will make adjustments for each of the categories 30
31 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 31
32 Quality Reporting Requirements Must report on all quality measures (33) to be eligible for shared savings 4 care domains Patient/caregiver experience (CG-CAHPS) Care coordination (MU, erx) Preventive health At-risk population/frail elderly health Initial year reporting only no performance thresholds Years 2 and 3 phase-in of performance based thresholds 32
33 Quality Measures Measures physician focused Only hospital-related measure = all-cause readmission (under NQF review) Data submitted via survey (CG-CAHPS) and modified PQRS group practice reporting option (GPRO) tool CMS will pay for first two years of CG-CAHPS administration ( ) ACOs must select a CG-CAHPS vendor in 2014 Submit all GPRO measures in initial year = automatic qualification for PQRS incentive 33
34 Benchmarks/Thresholds Each measure has a minimum attainment threshold and performance benchmark Minimum threshold finalized at 30 th percentile Dependent upon data availability, CMS will determine benchmarks based on Medicare FFS, Medicare Advantage or ACO performance Benchmarks available prior to start of the ACO 34
35 Data Validation CMS can audit/validate quality data If audited, CMS will request medical records to review and compare against data submitted If there is a discrepancy between the medical records and the quality data submitted of greater than 10%, then no credit for measures where this discrepancy exists. 35
36 Measuring Performance Receive points for each measure on sliding scale NO points awarded for performance below min. threshold (30 th percentile) Domains weighted equally (4x25%) Must meet minimum performance threshold for 70% of measures (per domain) to be eligible for savings Total performance score translated to percentage Total performance score determines eligible % of shared savings 36
37 Total Points Per Domain Domain # Measures Pt/Caregiver Experience (1 measure + CG-CAHPS) Care Coordination (6 measures + EHRx2) 1-sided model: Max Potential Pts Per Domain 2-sided model: Max Potential Pts Per Domain * 14* Preventive Health At-Risk Pop/Frail Elderly Health (7 measures including 2 composites) Total Quality Pts Available Max Potential Shared Savings * 48* 50% of savings generated 60% of savings generated 37 *Appears to be an error by CMS in summing points
38 Quality Scoring and Shared Savings Calculation Example Total Performance Score Percentage Shared Savings Rate (SSR) Amount eligible for shared savings Max SSR: 1-sided model = 50% 2-sided model = 60% Examples for 1-sided model (90 th percentile = 100%) X SSR (50%) = 50% savings (30 th percentile = 55%) X SSR (50%) = 27.5% savings 38
39 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 39
40 Data Sharing CMS will share aggregate data reports of preliminary prospective beneficiaries at the start of the agreement period, and thereafter on a quarterly basis. CMS will provide the ACO with a list of beneficiary name, date of birth, sex, and health insurance claim number on a quarterly basis. CMS will allow ACOs to request beneficiary claims data on a monthly basis (Part A, B, and D claims), along with other data. o This claims data will include the national provider identifier (NPI) and TIN ACOs must sign data use agreements (DUA). 40
41 Beneficiary Opt-Out Upon advance notification by the ACO, beneficiaries will have 30 days to opt-out of the sharing of beneficiary information. Provider is expected to repeat the opt-out notification at the next face to face meeting with the patient. HIPAA still applies Beneficiaries that opt-out of data sharing will still be part of the ACO. 41
42 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 42
43 ACO Organization Requirements Identifiable chief executive or director Medical director Not required to be a full time position ACO must describe how it will maintain a quality assurance and improvement program. Must be led by an appropriately qualified health care professional Removed requirement for a physician-directed QA and PI committee accountable for performance standards Must develop and implement evidence-based medical practice or guidelines for diagnoses. These guidelines must describe processes for assessing the cost and quality of care within the ACO. IT infrastructure to collect & evaluate data, feedback capabilities 43
44 Governance Issues Board Composition ACO participants must have at least 75% control All ACO participants do not need a representative on the board There is not a requirement for proportional representation The ACO governing body must be separate and unique to the ACO when the ACO includes multiple, otherwise independent entities that are not under common control Board must have a Medicare beneficiary who receives ACO services
45 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 45
46 Marketing Materials ACOs must submit all marketing materials, communications, and activities to CMS for approval prior to use. If Agency does not respond in 5 days, materials can by used. CMS can stop the use of materials at any point Template language will be provided for certain materials When available, template language must be used 46
47 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 47
48 Application and detail the necessary contents of the ACO application and the evaluation procedures Application materials and instructions are available online: Start Date April 1, 2012 July 1, applications posted on CMS Web site Fall 2011 Fall 2011 NOIs accepted Nov 1, Jan 6, 2012 Nov 1, Feb 17, 2012 CMS User ID forms accepted Nov 9, Jan 12, 2012 Nov 9, Feb 23, applications accepted Dec 1, Jan 20, 2012 Mar 1-30, application approval or denial decision Reconsideration review deadline March 16, 2012 May 31, 2012 March 23, 2012 June 15,
49 Teleconference Agenda Overview Payment Methodology Key Changes ACO Payment Options Patient Attribution Benchmark Quality Data Sharing Governance Marketing Application Legal 49
50 In a Nutshell 1. OIG made big changes regarding fraud and abuse waivers 2. DOJ/FTC No mandatory review, but must do PSA analysis Your ACO is an open book 3. IRS No change 50
51 A Few Facts About the Waivers Issued as IFC comments due 1/3/12 Waivers apply to Shared Savings ACOs, including those participating in Advance Payment Initiative Guidance will be issued separately for waivers for other pilots and demonstrations 51
52 5 OIG Waivers Pre-Participation Participation Shared Savings Distribution *Good faith attempt to develop an ACO * Diligent steps * Bona fide determination by governing body that arrangement reasonably related to purposes of SSP *Entered into agreement and in good standing *Meets governance, leadership, management requirements * Bona fide determination by governing body that arrangement reasonably related to purposes of SSP *Participation agreement *Shared savings earned under the SSP *Distribution can be after participation agreement ends *Shared savings are: 1. Distributed to ACO participants 2. Used for activities reasonably related to purposes of SSP 3. Not made to knowingly induce MD to reduce or limit medically necessary items or services Self-Referral Law Waiver of gainsharing CMP and antikickback laws if: *Participation agreement *Financial arrangement reasonably related to SSP *Comply with a selfreferral exception Patient Incentives For items and services for free or below FMV if: *Participation agreement *Reasonable connection between items/services and medical care *Items/services are in-kind and are for: 1. Preventive care or 2. For one or more of the following clinical goals: -Adherence to treatment regime -Adherence to drug regime -Adherence to followup care plan -Management of chronic disease or condition 52
53 Comments Requested 1. Should there be more specificity? a. reasonably related to purposes of the SSP be defined? b. OIG supplies a list of what s covered by start-up arrangements Comments on definition c. Methods for governing body to make bona fide determinations d. Methods for public disclosure of the arrangement e. Should there be additional conditions (fmv, e.g.) 53
54 Also of Interest No protection for distribution of shared savings earned by an ACO under a comparable program sponsored by a commercial health plan but a commercial ACO could fit into another waiver (participation, self-referral?) OIG will narrow the waivers in the future unless the Secretary determinates that the waivers have not had the unintended effect of shielding abusive arrangements (monitoring 2012-June 2013) 54
55 FTC-DOJ and Anti-Trust Policy applies to all collaborations that are eligible and intend, or have been approved, to participate in the MSSP No mandatory review Will use a rule of reason analysis Guidance also includes ACOs that plan to operate in the commercial market Of note: CMS will provide aggregate claims data and copies of all applications for ACOs formed after 3/23/10 to aid with vigilant monitoring 55
56 Safety Zone: ACOs in MSSP ACO participants that provide the same service must have a combined share of 30% or less of each common service in each participant s primary service area (PSA) PSA: lowest number of postal zip codes from which the ACO participant draws at least 75% of its patients Each independent physician solo practice, each fully integrated physician group practice, each inpatient facility, each outpatient facility will have its own PSA CMS has online resources to help calculate PSAs here: ulations.asp 56
57 More on those PSAs Each inpatient facility will separate PSA s for: Inpatient services Outpatient Services Physician services provided by its employed physicians, if any 57
58 If PSA is > 50% Dominant Participant Limitation: ACO must be non-exclusive if it is to fall within the safety zone ACO also cannot require a private payer to contract exclusively with the ACO or restrict its ability to contract or deal with other ACOs or provider networks. 58
59 IRS Earlier notice is unchanged Fact sheet issued by the Services contains a series of FAQs Relies on a facts and circumstances tests 59
60 60 Questions?
61 Contact Information Ivy Baer: Will Dardani: Jane Eilbacher: Jennifer Faerberg: Scott Wetzel: Mary Wheatley: Everyone can be reached at
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