Saturday, April 2, 2011

Medicare ACO proposed rules: Highlights

The Medicare ACO proposed rules can be found at:

Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations

These are some of the highlights of this 429 pages document:

"The following groups of providers of services and suppliers are eligible to participate:
• ACO professionals in group practice arrangements.
• Networks of individual practices of ACO professionals.
• Partnerships or joint venture arrangements between hospitals and ACO professionals.
• Hospitals employing ACO professionals.
• Such other groups of providers of services and suppliers as the Secretary determines appropriate.

The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period.

At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the Shared Savings Program.

The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans.

ACO is eligible to receive payment for shared savings if the following occur:
• The ACO meets quality performance standards established by the Secretary;
• The ACO meets the requirements for realizing savings.

We will focus on achieving, as our highest-level goal, the three-part aim which consists of the following:

• Better care for individuals – as described by all six dimensions of quality in the Institute of Medicine report: safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity;
• Better health for populations with respect to educating beneficiaries about the upstream causes of ill health – like poor nutrition, physical inactivity, substance abuse, economic disparities – as well as the importance of preventive services such as annual physicals and flu shots; and
• Lower growth in expenditures by eliminating waste and inefficiencies while not withholding any needed care that helps beneficiaries.

For purposes of this proposed rule, we propose definitions for the following
• Accountable care organization (ACO) means a legal entity that is recognized
and authorized under applicable State law, as identified by a Taxpayer Identification Number (TIN), and comprised of an eligible group (as discussed in section II.B. of this
proposed rule) of ACO participants that work together to manage and coordinate care for
Medicare FFS beneficiaries and have established a mechanism for shared governance that
provides all ACO participants with an appropriate proportionate control over the ACO's
decision making process,
• ACO participant means a Medicare-enrolled provider of services and/or a supplier, (as discussed in section II.B. of this proposed rule, as identified by a TIN).
• ACO provider/supplier means a provider of services and/or a supplier (as
discussed in section II.B. of this proposed rule) that bills for items and services it
furnishes to Medicare beneficiaries under a Medicare billing number assigned to the TIN
of an ACO participant in accordance with applicable Medicare rules and regulations.

We note that by proposing that the ACO be required to have a TIN, we are not
proposing to require that the ACO itself be enrolled in the Medicare program, in contrast to this requirement for each ACO participant.

We are not proposing to require that existing legal entities appropriately recognized under State law must form a separate new entity for the purpose of participating in the Shared Savings Program.

The Act requires that an ACO have a "mechanism for shared governance"

We believe that such a governance mechanism should allow for appropriate proportionate control for ACO participants, giving each ACO participant a voice in the
ACO's decision making process, and be sufficient to meet the statutory requirements
regarding clinical and administrative systems.

The governing body may be a board of directors, board of managers, or any other governing body that provides a mechanism for shared governance and decision-making for all ACO participants, and that has the authority to execute the statutory functions of an ACO, including for example, to "define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care,".

We propose that in order to be eligible for participation in the Shared Savings Program, the ACO participants must have at least 75 percent control of the ACO's governing body.

In addition, each of the ACO participants must choose an appropriate representative from within its organization to represent them on the governing body. This proposal ensures that ACOs remain provider-driven, but also leaves room for both non-providers and small provider groups to participate in the program.

We are proposing that ACOs meet the following criteria:
• The ACO's operations would be managed by an executive, officer, manager, or
general partner, whose appointment and removal are under control of the organization's
governing body and whose leadership team has demonstrated the ability to influence or
direct clinical practice to improve efficiency processes and outcomes.

Clinical management and oversight would be managed by a senior-level medical director who is a board-certified physician, licensed in the State in which the ACO operates, and physically present in that State.

• ACO participants and ACO providers/suppliers would have a meaningful commitment to the ACO's clinical integration program to ensure its likely success.
Meaningful commitment may include, for example, a meaningful financial investment in
the ACO, or a meaningful human investment (for example, time and effort) in the
ongoing operations of the ACO such that the potential loss or recoupment of the
investment is likely to motivate the participant to make the clinical integration program
• The ACO would have a physician-directed quality assurance and process improvement committee that would oversee an ongoing quality assurance and improvement program. The quality assurance program would establish internal performance standards for quality of care and services, cost effectiveness, and process and outcome improvements, and hold ACO providers/suppliers accountable for meeting the performance standards. The program would also have processes and procedures in place to identify and correct poor compliance with such standards and to promote continuous quality improvement.
• The ACO would develop and implement evidence-based medical practice or
clinical guidelines and processes for delivering care consistent with the goals of better care for individuals, better health for populations, lower growth in expenditures. The guidelines and care delivery processes would cover diagnoses with significant potential for the ACO to achieve quality and cost improvements, taking into account the circumstances of the individual beneficiary, and could be accomplished, for example, through an integrated electronic health record with clinical decision support. ACO participants and ACO providers/suppliers would have to agree to comply with these guidelines and processes and to be subject to performance evaluations and potential remedial actions.
• The ACO would have an infrastructure, such as information technology, that enables the ACO to collect and evaluate data and provide feedback to the ACO providers/suppliers across the entire organization, including providing information to influence care at the point of care via, for example, shared clinical decision support, feedback from patient experience of care surveys or other internal or external quality and utilization assessments.

It is our expectation that ACO participants and ACO providers/suppliers participating in the ACO would make a commitment to participate in the ACO for not less than 3 years.

In order to determine an ACO's compliance with these requirements, as part of the
application process, we are proposing that an ACO would submit all of the following:
• ACO documents (for example, participation agreements, employment contracts,
and operating policies) that describe the ACO participants' and ACO providers/suppliers' rights and obligations in the ACO, the shared savings that will encourage ACO participants and ACO providers /suppliers to adhere to the quality assurance and improvement program and the evidenced-based clinical guidelines;
• Documents that describe the scope and scale of the quality assurance and
clinical integration program, including documents that describe all relevant clinical
integration program systems and processes, such as the internal performance standards
and the processes for monitoring and evaluating performance;
• Supporting materials documenting the ACO's organization and management
structure, including an organizational chart, a list of committees (including names of
committee members) and their structures, and job descriptions for senior administrative
and clinical leaders; and
Evidence that the ACO has a board-certified physician as its medical director
who is licensed in the State in which the ACO resides and that a principal CMS liaison is identified in its leadership structure.
• Evidence that the governing body includes persons who represent the ACO
participants, and that these ACO participants hold at least 75 percent control of the
governing body.

If the ACO is approved for participation, we propose that an authorized representative -- specifically, an executive who has the ability to bind the ACO, must certify to the best of his or her knowledge, information, and belief that the ACO participants agree to the requirements set forth in the 3-year agreement between the ACO and us -- sign a 3-year participation agreement and submit the signed agreement to us.

Distribution of Savings

We propose to make any shared savings payments directly to the ACO as identified by its TIN.

This is part of the rationale for the payment withhold described in more detail in section II.

Therefore, we propose to require ACOs to provide a description in their application of the criteria they plan to employ for distributing shared savings among ACO participants and ACO providers/suppliers, and how any shared savings will be used to align with the aims of better care for individuals, better health for populations, and lower growth in expenditures.

Sufficient Number of Primary Care Providers and Beneficiaries

The Act requires participating ACOs to "include primary
care ACO professionals that are sufficient for the number of Medicare fee-for-service
beneficiaries assigned to the ACO …" and that at a minimum, "the ACO shall have at
least 5,000 such beneficiaries assigned to it"

We discuss our proposal to assign beneficiaries to an ACO on the basis of
primary care services rendered by physicians with primary care specializations in general practice, internal medicine, family practice, and geriatric medicine. We are proposing that this algorithm will also be used to assign beneficiaries during the baseline years in order to establish a historical per capita cost benchmark against which the ACO would be evaluated during each year of the agreement period.

An ACO would be determined to have a sufficient number of primary care ACO professionals to serve the number of Medicare beneficiaries assigned to it if the number of beneficiaries historically assigned over the three-year benchmarking period using the ACO participant TINs exceeds the 5,000 threshold for each year.

We are also proposing to require an ACO to maintain, update, and annually report to us the TINs of its ACO participants and the NPIs associated with the ACO providers/suppliers.

• Patient involvement in ACO governance. As discussed in more detail later in
the document, the ACO would be required to have a Medicare beneficiary on the governing board.

In order to safeguard against any conflicts of interest, any patient(s) included in an ACO's governing body, or an immediate family member, must not have any conflict of interest, and they may not be an ACO provider/supplier within the ACO's network.

We are proposing that all ACO marketing materials, communications, and activities related the ACO and its participation in the Shared Savings Program, such as mailings, telephone calls or community events, that are used to educate, solicit, notify, or contact Medicare beneficiaries or providers/suppliers regarding the ACO and its participation in the Shared Savings Program, be approved by us before use to protect beneficiaries and to ensure that they are not confusing or misleading. This requirement would also apply to any materials or activities used by ACO participants or ACO providers/suppliers on behalf of the ACO to communicate about the ACO's participation in the Shared Savings Program in any manner to Medicare beneficiaries. In addition, we would want to ensure that materials distributed to beneficiaries do not misrepresent Shared Savings Program policies or suggest that we endorse the ACO, its ACO participants, or its ACO providers/suppliers.

We do not believe that the following materials and activities would be subject to our approval:
Beneficiary communications that are informational materials, that are
customized or limited to a subset of beneficiaries;
and materials that do not include information about the ACO or providers in the ACO;
materials that cover beneficiary specific billing and claims issues or other specific individual health related issues; and
educational information on specific medical conditions, (for example, flu shot reminders), or referrals, for example, as discussed in section II. C. of this proposed rule, exceptions to the definition of "marketing" under the HIPAA Privacy Rule.

C. Establishing the 3-year Agreement with the Secretary
1. Options for Start Date of the Performance Year

We propose:
(1) to adopt the general requirement that ACO applications must be submitted by a deadline established by us;
(2) we will review the applications and approve applications from eligible organizations prior to the end of the calendar year;
(3) the requisite 3-year agreement period will begin on the January 1 following approval of an application; and
(4) the ACO's performance periods under the agreement will begin on January 1 of each respective year during the agreement period.

2. Timing and Process for Evaluating Shared Savings

Based upon historical trends, a 3-month run-out would result in a completion percentage of approximately 98.5 percent for physician services and 98 percent for Part A services.
A 6-month run-out of claims data results in a completion percentage of approximately 99.5 percent for physician services and 99 percent for Part A services.

We propose using a 6-month claims run-out to calculate the benchmark and per capita expenditures for the performance year.

3. Data Sharing

"We could provide data to ACOs in different forms with a focus on different levels
of information, for example, aggregated population level data or beneficiary identifiable data. These data could be combined with data collected within the ACO."

4. Sharing Aggregate Data

In the PGP demonstration, we provided several types of aggregate data to the
participating group practices. We generated an annual profile report that provided the
following information:
Financial performance including number of patients seen, number of patients assigned, per capita expenditures, risk score, benchmark, total assigned beneficiary expenditures, minimum savings amount, shareable savings, and annual performance payment.
Quality performance scores, including numerator, denominator, and rate for each measure along with the target benchmark for each measure.
• Aggregated metrics on the assigned beneficiary population, including a breakdown of the population into high risk score beneficiaries, beneficiaries with 1 or more hospitalizations, and chronic disease subpopulations such as patients with congestive heart failure, coronary artery disease, hypertension, chronic obstructive
pulmonary disease, and diabetes.
The number of patients overall and in each subpopulation with emergency department visits, hospital discharges, physician visits and their corresponding rate for the assigned population.

In general, by making similar types of aggregate, data available to ACOs
participating in the Shared Savings Program, we believe ACOs would have a more
complete picture of the services rendered to their assigned FFS beneficiaries

We further propose to include these data in conjunction with the yearly financial and quality performance reports. Additionally, we propose to provide quarterly aggregate data reports to ACOs based upon the most recent 12 months of data from potentially assigned beneficiaries.

5. Identification of Historically Assigned Beneficiaries

We propose to make certain limited beneficiary identifiable data available at the beginning of the first performance year.

Accordingly, we propose to disclose the name, date of birth (DOB), sex and Health Insurance Claim Number (HIC) of the historically assigned beneficiary population.

Therefore, at the beginning of the agreement period, at the request of the ACO,
we are proposing to provide the ACO with a list of beneficiary names, date of birth, sex, and HICN derived from the assignment algorithm used to generate the 3-year benchmark.
As discussed in section II.B. of this proposed rule, these are beneficiaries who received the plurality of primary care services from primary care physicians who are ACO participants.

6. Sharing Beneficiary-Identifiable Claims Data

For these reasons we believe sharing beneficiary identifiable claims data with ACOs will assist them in improving care for individuals, improving health of their population, and reducing the growth in expenditures for their assigned beneficiary population.

Additionally, when an ACO is accepted to participate in the Shared Savings
Program, we propose to require ACOs to enter into a Data Use Agreement (DUA) prior
to receipt of any beneficiary identifiable claims data. Under the DUA, the ACO would be prohibited from sharing the Medicare claims data that we provide through the Shared Savings Program with anyone outside the ACO.

(1) Sharing Data Related to Medicare Parts A and B

(2) Sharing Data Related to Medicare Part D

a. Beneficiary Opportunity to Opt-Out of Claims Data Sharing

Therefore, we propose affording beneficiaries the ability to opt-out of sharing their protected health information with the ACO. We believe this opportunity coupled with notification of how protected health information will be shared and used affords beneficiaries meaningful choice.

An example of the opt-out approach would be that when a beneficiary has a visit with their primary care physician, their physician would inform them at this visit that he or she is an ACO participant or ACO provider/supplier and that the ACO would like to be able to request claims information from us in order to better coordinate the beneficiary's care. If the beneficiary objects, we propose that the beneficiary would be given a form stating that they have been informed of their physician's participation in the ACO and explaining how to opt-out of having their personal data shared. The form could include a phone number and/or email address for beneficiaries to call and request that their data not be shared.

As noted previously, ACOs will only be allowed to request beneficiary identifiable claims data for beneficiaries who have
1) visited a primary care participating provider during the performance year, and
2) have not chosen to opt-out of claims data sharing.

7. New Program Standards Established During 3-Year Agreement Period

We propose that ACOs be subject to future changes in regulation with the
exception of the following program areas:
• Eligibility requirements concerning the structure and governance of ACOs;
• Calculation of sharing rate; and
• Beneficiary assignment.

For example, ACOs would be subject to changes in regulation related to the
quality performance standard. The language of the ACO agreement would be explicit to
ensure that ACOs understand the dynamic nature of this part of the program and what
specific programmatic changes would be incorporated into the agreement.

D. Assignment of Medicare Fee-for-Service Beneficiaries

However, assignment of beneficiaries to ACOs is to be determined only on the basis of primary care services provided by ACO professionals who are physicians.

The term "assignment" in this context refers only to an operational process by which Medicare will determine whether a beneficiary has chosen to receive a sufficient level of the requisite primary care services from physicians associated with a specific ACO so that the ACO may be appropriately designated as exercising basic responsibility
for that beneficiary's care.

It is important to note that the term "assignment" for purposes of this provision in no way implies any limits, restrictions, or diminishment of the rights of Medicare FFS beneficiaries to exercise complete freedom of choice in the physicians and other health care practitioners and suppliers from whom they receive their services.

Therefore, we are proposing to identify an ACO operationally as a collection of Medicare enrolled TINs.

In particular, NPI data will be useful to assess the quality of care furnished by an ACO. For example, NPI information will be necessary to determine what percent of physicians and other practitioners in the ACO are registered in the HITECH program
We are also proposing to require that organizations applying to be an ACO must provide not only their TINs but also a list of associated NPIs for all ACO professionals, including a list that separately identifies physicians that provide primary care.

2. Definition of Primary Care Services

In that section, "primary care services" are defined as a set of services
identified by these HCPCS codes: 99201 through 99215; 99304 through 99340; and
99341 through 99350. Additionally, we would consider the Welcome to Medicare visit
(G0402) and the annual wellness visits (G0438 and G0439) as primary care services for
purposes of the Shared Savings Program.

Assign beneficiaries with physicians designated as primary care providers (internal medicine, general practice, family practice, and geriatric medicine) who are providing the appropriate primary care services to beneficiaries.

3. Prospective vs. Retrospective Beneficiary Assignment to Calculate Eligibility for Shared Savings

We believe that the retrospective approach to beneficiary assignment for purposes of determining eligibility for shared savings is compelling.

Therefore, we are proposing the combined approach of retrospective beneficiary assignment for purposes of determining eligibility for shared savings balanced by the provision of aggregate beneficiary level data for the assigned population of Medicare beneficiaries during the benchmark period.

When the PGP data is modeled with the Shared Savings Program assignment methodology, the assigned patient population would vary by approximately 25 percent from year to year.

4. Majority vs. Plurality Rule for Beneficiary Assignment

Therefore, we are proposing to assign beneficiaries for purposes of the Shared Savings Program to an ACO if they receive a plurality of their primary care services from primary care physicians within that ACO.

E. Quality and Other Reporting Requirements

The collection of information should minimize the burden on providers to the
extent possible. As part of that effort, we have begun and will continuously seek to align Shared Savings Program measures with the methods and measures included in the Medicare and Medicaid EHR Incentive Programs to enable the collection and reporting of performance information to be a seamless part of care delivery and the meaningful use of certified EHR technology.

Align with other Medicare incentive programs such as the Physician Quality Reporting System ("PQRS"; formerly known as the Physician Quality Reporting
Initiative), Electronic Prescribing Incentive Program, Electronic Health Records (EHR)
Incentive Programs
, Hospital Inpatient Quality Reporting Program, and also Medicaid
and private sector initiatives that align with the three-part aim.

c. Proposed Quality Measures for Use in Establishing Quality Performance Standards that ACOs Must Meet for Shared Savings

Based upon the principles described, we are proposing 65 measures (see Table 1) for use in the calculation of the ACO Quality Performance Standard.

Specifically, for the first year of the program, we propose for the quality performance standard to be at the level of full and accurate measures reporting; for subsequent years, we propose the quality performance standard be based on a measures scale with a minimum attainment level as described in section II.E.4 of this proposed rule.
ACOs that do not meet the quality performance thresholds for all proposed measures would not be eligible for shared savings, regardless of how much per capita costs were reduced.

In an effort to provide focus to ACO quality improvement activity, we have
identified 5 key domains:
• Better Care for Individuals:
++ Patient/Caregiver Experience
++ Care Coordination
++ Patient Safety
• Better Health for Populations:
++ Preventive Health
++ At-Risk Population/Frail Elderly Health

As illustrated in the "Method of Data Submission" column of Table 1, we propose to
calculate results for the first program year measures via claims, the Group Practice Reporting Option (GPRO) data collection tool, as discussed in section II.E.4. of this proposed rule, and survey instruments. The ACO GPRO tool would be a new tool based on the data collection tool currently used in the Physician Quality Reporting System (formerly known as the Physician Quality Reporting Initiative) group practice reporting option (GPRO) and Physician Group Practice (PGP) demonstration.

Identical to the sampling method used in the 2011 Physician Quality Reporting System
GPRO I, we plan to require that the random sample for measures reported via ACO GPRO must consist of at least 411 assigned beneficiaries per measure set/domain. If the pool of eligible, GPRO assigned beneficiaries is less than 411 for any measure set/domain, then we plan to require the ACO to report on 100 percent, or all, of the assigned beneficiaries.

We propose aggregating the quality domain scores into a single overall ACO score which would be used to calculate the ACOs final sharing rate for purposes of determining shared savings or shared losses

(4) The Quality Performance Standard Level

That is, under the one-sided model, we propose that an ACO would receive 50 percent of shared savings based on 100 percent complete and accurate reporting on all quality measures.
Similarly, we propose that under the two-sided risk model, ACOs would receive 60 percent of shared savings based on 100 percent complete and accurate
reporting on all quality measures.

5. Incorporation of Other Reporting Requirements related to the Physician Quality Reporting System and Electronic Health Records Technology Under Section 1848 of the Act

We propose to incorporate a Physician Quality Reporting System group practice
reporting option (GPRO) under the Shared Savings Program and further propose that the eligible professionals that are ACO participant providers/suppliers would constitute a group practice for purposes of qualifying for a Physician Quality Reporting System incentive under the Shared Savings Program.

In addition, as a Shared Savings Program requirement separate from the quality measures reporting discussed previously, we propose requiring that at least 50 percent of an ACO's primary care physicians are determined to be "meaningful EHR users"

Such a requirement would be similar to the previous proposal for primary care physicians and would require 50 percent of eligible hospitals that are ACO providers/suppliers achieve meaningful use of certified EHR technology by the start of the second performance year in order for the ACO to continue participation in the Shared Savings Program.

6. Public Reporting

We propose that the following information regarding the ACO be publicly reported:
• Name and location.
• Primary contact.
• Organizational information including--
++ ACO participants;
++ Identification of ACO participants in joint ventures between ACO professionals and
++ Identification of the ACO participant representatives on its governing body; and
++ Associated committees and committee leadership.
• Shared savings information including--
++ Shared savings performance payment received by ACOs or shared losses payable to
us; and
++ Total proportion of shared savings invested in infrastructure, redesigned care
processes and other resources required to support the three-part aim goals of better health for populations, better care for individuals and lower growth in expenditures, including the proportion distributed among ACO participants.
• Quality performance standard scores.

F. Shared Savings Determination

Specifically, we are proposing that ACOs participating in the Shared Savings Program
will have an option between two tracks:

Track 1: Under Track 1, shared savings would be reconciled annually for the first 2 years of the 3-year agreement using a one-sided shared savings approach, with ACOs not being responsible for any portion of the losses above the expenditure target. However, for the third year of the 3-year agreement, an ACO would be required to agree to share any losses that may be generated as well as savings.

Track 2: More experienced ACOs that are ready to share in losses with greater opportunity for reward may elect to immediately enter the two-sided model.

"Benchmark for each agreement period using the most recent available 3 years of per-beneficiary expenditures for parts A and B services for Medicare fee-for-service beneficiaries assigned to the ACO."

Table 8: Shared Savings Program Overview

(e) Ensuring ACO Repayment of Shared Losses

As discussed in section II.F.of this proposed rule, we propose a flat 25 percent withholding rate will be applied annually to an ACO's earned performance payment.

We propose to require that an ACO establish a
self-executing method for repaying losses to the Medicare program by indicating that funds may be recouped from Medicare payments to the ACO's participants, obtaining reinsurance, placing funds in escrow, obtaining surety bonds, establishing a line of credit as evidenced by a letter of credit that the Medicare program can draw upon, or establishing another repayment mechanism, such as those previously discussed.

We propose that an ACO must demonstrate having established a repayment
mechanism, using one or more of the recoupment methods proposed previously, sufficient to ensure repayment of losses equal to at least 1 percent of per capita expenditures for its assigned beneficiaries from the most recent year available. (? $8000 per patient x 1% = $80 per patient x 5000 patients = $400,000 ?)

As a result, it is important to ensure that prior to entry into the Shared Savings Program, the ACO has an appropriate plan for how it will repay any losses incurred during the third year of its agreement when it is automatically transitioned to the two-sided model.

H. Monitoring and Termination of ACOs

In general, the methods we could use to monitor ACO performance may include, but are not limited to the following:

● Analysis of specific financial and quality data as well as aggregated annual and quarterly reports.
● Site visits.
● Assessment and following up investigation of beneficiary and provider complaints.
● Audits (including, for example, analysis of claims, chart review, beneficiary
surveys, coding audits).

1. Waivers of CMP, Anti-Kickback, and Physician Self-Referral Laws

We expect that the waivers applicable to ACOs participating in the Shared Savings
Program will be issued concurrently with our publication of the Shared Savings Program final rule.

For comments regarding the proposed rules see:

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