Robert Resnik MD MBA

Robert Resnik MD MBA

Movement from FFS to Value Based Value Based Spectrum P4P Clinical Integration Shared Savings Bundled Payments Shared Risk Capitation Global Full Risk Partial Risk

ACO vs. Clinically Integrated Network Clinical integration is the process or the way An ACO is the structure specific for Medicare organization of health care providers agree to be accountable for the quality, cost, and overall care of Medicare beneficiaries assigned to the ACO. FTC considers ACO s clinically integrated by participating with MSSP but still if challenged will have to prove it A clinically integrated network (CIN) aligns providers CIN s coordinate care across affiliated caregivers CIN s develop contracts with payers to improve quality while controlling growth in total cost of care

Essentials of a CIN The ability to achieve significant clinical and economic efficiencies Broad physician representation and physician investment A well-developed care management program that uses evidence-based guidelines Data driven to help improve quality and cost Relentless focus on improving the health of the patients under their care

FTC Policy on Clinical Integration Norman (Oklahoma) Physician Hospital Organization regarding its proposed clinical integration structure, February 13, 2013. http://www.ftc.gov/os/2013/02/130213normanphoadvlt r.pdf.

Norman- Evidenced Based Guidelines Developed/updated evidenced based clinical practice guidelines All physicians required to actively participate in developing the guidelines. Develop for as many disease-specific conditions as practical Periodically review, reassess and update these guidelines as appropriate

Norman - Quality Creation of a quality assurance committee Comprised of participating physicians Responsible for establishing the measures for individual and group performance Benchmarking, monitoring individual and group compliance with the network s standards Administering provider corrective actions as necessary.

Norman Monitor Performance Development measures of performance identify high-cost providers identify inappropriate use of resources Identify failures to comply with clinical practice guidelines Utilized electronic platforms to collect, monitor and report data

Mandatory Physician Participation and Compliance Monitor physician compliance with the evidence based guidelines Re-educate those who fall short Eventually dismiss them from the network if they do not comply with the network standards on treatment protocols. It is important for the network to require a commitment from its physicians to the clinical integration program

Norman Non-Exclusivity The providers enter into non-exclusive contracts with the network Allows providers to be able to engage in contracting independently or through participation in a competing network. I.E. Payers can negotiate and contract directly with the individual providers and vice versa. The providers agree to participate in all payer contracts entered into by the CIN. Increases likelihood that the providers will actively participate in the mechanisms to achieve goals of cost efficiencies and increased quality of care.

Non-Exclusive Network FTC Clinically Integrated endorsed networks have been non-exclusive. Non-exclusivity gives credence to fact that procompetitive impact of network is greater than anticompetitive impact (RULE of REASON)even if the network is greater than the safety zones Must be clear to payers and providers that the network is not exclusive.

Norman- Spillover Provided mechanism to avoid potential spillover effects Spillover is competing providers engaging in discussions and possible agreements for anticompetitive conduct outside of the legitimate business activities of the CIN. Provide antitrust counseling and training to ensure that the participating providers do not collectively

Spillover Effects Can not set FFS price minimum Can not exercise power to refuse to contract with payers outside of the network. Take steps to prevent sensitive information involving prices or negotiating strategies from being shared between or among competitors.

Clinical vs Financial Integration Financial integration among providers involves shared financial data shared financial risk and reward mutual dependency on financial outcomes aligned financial incentives Ex: Capitation, With holds, Shared or Global risk Can be clinically integrated and not financially integrated Clinical integration among providers involves shared clinical data shared patient relationships mutual dependency on clinical outcomes

The Anti-kickback Statute Prohibits making payments to induce referrals or the ordering of goods or services reimbursable by Medicare or Medicaid. Protects against financial relationships causing physicians and others to over utilize Medicare and Medicaid services Example referring patients for unnecessary services Steer patients to particular providers based on financial motives versus patients best interests.

The Anti-kickback Statute In theory even CINs that reward physicians for best practices or evidence-based protocols could be construed as violating the anti-kickback statute. Example CIN s incentive payments to participating physicians can be disguised payments to induce physicians to refer to the CIN s sponsoring hospitals Hospitals taking fee cuts and passing them on to potential referring participating providers

The Anti-kickback Statute ACO/CIN must not exceed fair market value on negotiated fees If negotiated fee schedule is far above market value then CIN/ACO could be using leverage of size to command unfair payments Avoid negotiating fee schedules where hospitals, specialists or others could benefit from referrals in exchange for lowering their fee schedule to raise the FFS for the possible referee. Ensuring that payments are for identifiable services of the physicians (versus for referrals) Avoid compensation that varies with the number of patients, such as compensation that increases with referrals to the CIN s hospital sponsors

The Anti-kickback Statute Avoiding offering CIN participation opportunities to physicians as an incentive to switch referrals to the CIN s sponsoring hospitals Using nationally recognized standards and identifying specific actions required to achieve payments Requiring measurable improvement over the status quo to receive payments ACO/CIN can not depend on already being the best they have to show improvement as a reason for negotiating as a group of practices

Recommendations Limiting financial incentives tied to cost savings to a reasonable amount and duration maximum annual cap limiting the duration to three years Do not Condition incentives on stinting on care increasing referrals cherry-picking healthy patients Choosing patients with desirable insurance Accelerating patient discharges

Non-Exclusive Network No absolute percentage of market share allowed by the FTC before it felt that it was too high and would require a challenge. More narrow the panel and lower the market share of the network participants, the more likely it will pass any review by any of the agencies. Narrow panel that is committed to increase quality is more important than a very broad panel that is unnecessary to achieve results Can not use size as a barrier to payers as they negotiate reimbursement rates

Joint Negotiation of Fees The Federal Trade Commission states that the sharing of significant financial risk among providers or substantial clinical integration can both serve as justification for joint negotiation of fees. clinical integration only moves the joint pricing aspects of the. arrangement from being per se unlawful to being assessed under the rule of reason Just because you are clinically integrated you are not given complete immunity in negotiating fees

Summary The Federal Trade Commission does not view multiprovider networks as illegal if the integrated network Is likely to produce significant efficiencies that benefit consumers Fees negotiated by the network providers are reasonably necessary to realize those efficiencies Can not remain status quo Can not claim deserve higher rates because you started out more efficient than network

Rule of Reason PROCOMPETITVE IMPACT OF INTEGRATION ( better for consumers) OUTWEIGHS THE ANTICOMPETITIVE IMPACT (adverse effect on consumers)

Rule of Reason CAPITATION = SUBSTANTIAL RISK RISK = CLINICAL INTEGRATION Still must prove rule of reason Procompetitve Impact > Anticompetitive

Rule of Reason CAPITATION = Large % Rule of Reason Small % of covered Lives in network then Must have processes similar to Norman to demonstrate the rule of reason Demonstrated positive impact on patients under your care as opposed to negative (anticompetitive) relating to cost and quality