In the five years since the signing of the Patient Protection and Affordable Care Act (PPACA), we’ve seen the creation and growth of accountable care organizations (ACOs). There are now 645 ACOs in all 50 states plus the District of Columbia and Puerto Rico, of which 366 are Medicare ACOs covering around 50 million beneficiaries (see Accountable Care Growth In 2014: A Look Ahead, Fast Facts – All Medicare Shared Savings Program And Medicare Pioneer ACOs, and ACO Update: Accountable Care At A Tipping Point).
And based on the January announcement from the Obama Administration (see Medicare Bets Big On Pay-For-Value) and the recent details in the sustainable growth rate (SGR) legislation (see Medicare Physician Pay Cuts Averted & SGR Scrapped; Medicare To Phase In Value-Based Reimbursements), there will likely be more Medicare enrollees in ACOs.
But I had never given much thought to how the Medicare program decides which ACOs are “accountable” for which consumers. Since consumers in the Medicare fee-for-service plan don’t “choose” an ACO like they do a health plan, how are they enrolled? The answer? Attribution.
Roughly speaking, “attribution” is the process of using “medical claims to identify all the providers that a patient sees and the costs applied to the patient’s illness and wellness, and determines who among a patient’s providers should be accountable for his or her condition and health care expenditures.” The exact equation that makes this possible is decided (and decidedly different) by individual payers, but it generally comes in two different kinds. The first kind is retroactive – the payer in a value-based contract tracks the behavior of a target population after the end of a reporting period, and retrospectively assigns the patient to the provider organizations that consumer saw the most. The drawback for provider organizations is that they don’t really know who “their” patient is until the end of the reporting period, and they may end up responsible for someone else’s patient.
As writer John Morrissey points out in, Who Is Accountable For This Patient?, an article in the American Hospital Association magazine, Trustee: “Attribution is neither exact nor simple. It has many variables, and each tweak in its logic can have an impact on which patients are attributed to a particular physician, and on the final calculation of quality and cost-control scores that may affect such issues as financial rewards.”
The Centers for Medicare & Medicaid Services (CMS) has a very detailed description of how Medicare attributes consumers to ACOs – Medicare Shared Savings Program Shared Savings and Losses and Assignment Methodology Specifications. Under those arrangements, CMS “rewards” ACOs when they’re able to lower growth in Medicare Parts A and B fee-for-service costs for their “assigned” population, assuming they meet performance standards on quality of care.
The Shared Savings Program uses preliminary prospective beneficiary assignment with final retrospective beneficiary assignment. As described in the final rule, if a beneficiary gets at least one primary care service from a physician within the ACO, the beneficiary may be assigned to the ACO based on a 2-step process:
- The first step assigns a beneficiary to an ACO if the beneficiary receives the plurality of his or her primary care services from primary care physicians within the ACO. [CMS] define[s] primary care physicians with 1 of 4 specialty designations: internal medicine, general practice, family practice, and geriatric medicine.
- The second step only considers beneficiaries who have not received a primary care service from a primary care physician, including primary care physicians outside the ACO. Under this second step, [CMS] assign[s] a beneficiary to an ACO if the beneficiary receives the plurality of his or her primary care services from other ACO professionals within the ACO, including: non-primary care physicians, nurse practitioners, clinical nurse specialists, and physician assistants.
For a reimbursement and contracting “geek” like me, I find these algorithms very interesting. But for most executives of specialist organizations, why should you care how ACO reimbursement is structured? There are a number of reasons.
First, there is the increasing expectation that provider-owned delivery systems will not only manage individual consumer care, but will manage the care of populations. This framework – a statistical framework – is not how most clinical professionals were trained. Being given the responsibility for the health of a group of 30,000 individuals to manage is much different than focusing on the 20 consumers that received services on a specific day. In this new world, “accountability” happens whether the consumer receives regular care from the provider system or not. Understanding the model is key to educating the clinical team.
Another issue in understanding these accountability assignment models is addressing their primary care focus. For specialist organizations and clinical specialists, this presents system design and performance challenges. For consumers with chronic conditions, specialists can perform the bulk of care delivery over a period of time. Yet the assignment of accountability and the total costs of a consumer’s care usually are attributed to his or her primary care physician. Mr. Morrissey describes the situation with a football analogy:
The analogy of the football quarterback often comes up when describing the position of primary care physicians in team care models. The outcome on the gridiron may be largely the result of plays by specialists such as running backs or wide receivers, but the quarterback initiated the handoff or pass, enabled various team members to do what they do best and, ultimately, absorbed the credit or blame. Similarly, the primary care physician directs, coordinates and has a vested interest in patient outcomes.
This change in assigning accountability and incentives will cause significant changes in collaboration and compensation models.
Finally, as the number of specialist organizations that are adding primary care capacity or working in partnership with primary care organizations, understanding the fundamentals of reimbursement are key successful management of operations, quality, and sustainability.
For more on value-based reimbursement through Medicare ACOs, check out these resources:
- Medicare Shared Savings Program ACO Fast Facts
- Fast Facts – All Medicare Shared Savings Program ACOs
- Medicare Accountable Care Organizations: Program Eligibility, Beneficiary Assignment, and Quality Measures
- Whose Patient Is It? Patient Attribution In ACOs
- Medicare Shared Savings Program Frequently Asked Questions
- Medicare Shared Savings Program Application Process: Agreements, Participant List & Assignment
- Designing Consumer-Friendly Beneficiary Assignment and Notification Processes for Accountable Care Organizations
- For Medicare ACOs, 66% Of Outpatient Specialty Office Visits Outside The ACO Network
And don’t miss the session on June 17, Where Do Behavioral Health Organizations Fit In The ACO Landscape? A Review Of Emerging Accountable Care Models, with Aaron McHone, MBA, Executive Director, Unity Point Health – Berryhill Center; Suzanne Kieltyka, RD, CDE, Health Education Manager, Summit Strategic Solutions; and OPEN MINDS Senior Associate, Joseph P. Naughton-Travers, at the 2015 OPEN MINDS Strategy & Innovation Institute.