The Department of Health and Human Services (HHS) has released their final rule on the development of Accountable Care Organizations (ACO), groups of hospitals and other providers formed to create a continuum of care for Medicare beneficiaries and reduce costs while improving quality and efficiency. Created as a central tenet of Patient Protection Affordable Care Act’s (PPACA)efforts to increase the efficiency of federal health programs, Accountable Care Organizations will have a dramatic impact on how hospitals are reimbursed to provide care to Medicare beneficiaries.
Read HHS Final ACO Rule HERE
The final rule, submitted by HHS, comes after previous draft rules released earlier this year were widely panned by hospitals and Medicare providers across the country. Claims of HHS underestimating the upfront costs to merging operations and requiring too many quality metrics to reap potential savings rewards were the most often heard complaints.
In moving to a bundled payment model where an ACO receives one bulk payment for certain diagnosed illnesses, procedures, etc., ACO’s have the potential to revolutionize how hospitals and providers care for Medicare beneficiaries. If an ACO can treat a patient with a certain illness for less than the “bundled payment”, the ACO reaps a percentage of the savings generated. The carrot getting ACO’s to decrease costs is a financial windfall. The main difference between an ACO and “managed care organizations” of the 1990’s are the quality metrics that the organization will also have to meet in terms of patient care. Care coordination, patient safety, preventative health, readmissions, infections and other metrics will be tracked and will have an effect on the eventual rebates to the savings generated on individual patients.
It is estimated that between 50-200 ACO’s who would be able to serve Medicare beneficiaries are likely to form over the next three years, serving an estimated 2 million beneficiaries nationwide. Analysts also suggest the CMS could save more than $940 million over four years through the ACO model, a small sum when considering the $2 trillion in total spending by CMS. The formation of ACO’s that serve Medicare beneficiaries is only a starting point; several hospital and provider organizations have begun partnering with private insurance companies to develop their own set of bundled payment initiatives and O&P providers need to be able to quantify their value to these organizations as well.
It will be critical for independent orthotics and prosthetics professionals to be able to demonstrate to ACO’s in their area how we help keep costs down by providing quality products and care to our patients. The best way to do that is to quantify your practice through upfront data collection on your patients and follow up data collection throughout their recovery. If an O&P practice can provide an ACO with data suggesting they have dramatically lower readmission rates, or that their patients have fewer complications as a result of the O&P facility properly creating and fitting a custom prosthesis, the ACO has a vested interest in being in business with that facility.
The Obama Administration’s made several concessions on payment and quality metrics issues brought forth by the medical community in their final rule in hopes of making the program more palatable to potential hospital organizations forming into Accountable Care Organizations, including:
— Participation in an ACO and share in savings with Medicare without risk of losing money. ACOs will be able to start sharing in the savings earlier rather than letting Medicare retain all the initial savings.
–Quality measures that ACOs will have to meet to qualify for performance bonuses were reduced from 65 to 33.
–Potential ACOs will be told up-front which Medicare beneficiaries are likely to be part their system. Unlike previous rules where ACOs would not have known which patients were in the ACO until their contract ended.
–Community health centers and rural health clinics will be allowed to lead ACOs. They were left out of the prior proposal.
The final rule released by HHS confirms that ACO’s will become a driving force in the future of health care in the United States. O&P providers that harness and utilize the considerable data at their disposal will keep themselves ahead of the shifting environment.
Contact OPGA Government Relations with any questions you have regarding ACO’s, or potential programs you could use to begin quantifying the value you provide to your patients and potential bundled payment operations initiatives.