Accountable Care Organizations for Neuroradiologists




Accountable care organizations (ACOs) are one of the more interesting and (perhaps) highest impact components of the 2010 Federal health care bill. Neuroradiologists should examine them carefully for opportunities to participate and contribute to ACOs as well as to understand the potential threats. Although there are questions about the viability of the proposed models, neuroradiologists should not assume this is a fad. All specialists should pay close attention to the evolution of ACOs. It seems likely that many of their features will come to pass during the coming decades with substantial impact on the profession.








  • Accountable care organizations (ACOs) represent a significant shift in how the Federal government would like to both pay physicians and to control quality.



  • Although there are many forms that ACOs can take, at their core they are constructed to reduce costs, to share the cost savings, but to maintain quality standards in the process.



  • ACOs represent both a threat and an opportunity for neuroradiologists. Those neuroradiologists who are willing to take on leadership roles in ACOs are likely to thrive compared with their colleagues who participate at the margin of an ACO.



  • In the longer term, the ACO model will continue to change; therefore, it is critical that neuroradiologists are vigilant in paying attention to this important change in United States health care.



Key Points


Introduction



“We can evade reality, but we cannot evade the consequences of evading reality.” —Ayn Rand


As this article goes to press, accountable care organizations (ACOs) were on schedule to be launched across the United States in January of 2012. Legislatively, they were incorporated into the Federal Health Care Reform Act enacted in 2010. Initially, there was a substantial amount of confusion about what forms they would take and how subspecialists, like those in neuroradiology, would or could participate in these new organizations.


Although there is continuing uncertainty about the mechanics and methods of participation, there seems to be a great deal of flexibility in the form that an ACO could take. That creates an opportunity for specialists to take initiative in creating and leading an ACO. In fact, neuroradiologists should welcome and, when possible, seek out the opportunity to participate in ACOs and other systems that are paying attention to quality measures and in which neuroradiologists can take on larger roles. In particular, this author would welcome greater latitude in deciding when imaging is appropriate and what the best type of test is in a given situation. Neuroradiologists should welcome the opportunity to participate in building institutional structures in which they can have greater influence on the quality of care. The alternative—being marginalized in a system that is devoted to deemphasizing the role of high technology subspecialists—would be sad outcome for the field.


Neuroradiologists are highly trained subspecialists and are capable of expanding the scope of their involvement with institutions and their colleagues. The default pathway would likely lead to reducing their function to being film readers. The former is the more promising path for neuroradiologists and their groups. However, it is necessary to go into these types of relationships with eyes wide open and to understand the pitfalls as well as the promise of ACOs for advanced neurodiagnosis and treatment modalities.


As this article goes to press, there are still many unanswered questions about ACOs, but that should be a stimulus for attention, not an excuse for avoiding the issues. Although there are many coming changes in health reform in the United States that will affect the profession, vigilant attention to new practice models such as ACOs needs to be paramount. Even if ACOs are not a huge success in their first 3-year outing (a good bet) getting started now will allow neuroradiologists to better adapt to the ACO versions 2.0 and 3.0 that will come next (a fairly safe bet). Finally, the core principles of an ACO—the combination of creating incentives to reduce costs, setting and measuring quality metrics, and promoting longitudinal institutional responsibility for patients—are all likely to be central tenets of health care reform in the United States during the coming decades (almost a sure thing, in fact neuroradiologists should probably bet their careers on it).




A brief history of ACOs


ACOs were written into law in H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), in 2010. The initial design by the federal government was significantly built on and influenced by the results of the Center for Medicare and Medicaid Services (CMS) Physician Group Practice Demonstration. In that 5-year demonstration, CMS created a shared savings model with medical groups that allowed the groups to receive payments of up to 80% of the savings generated. The groups were required to adhere to 32 quality measures that were phased in during the 5-year horizon. Costs were tracked for both Medicare Parts A and B spending. Savings were calculated based on growth in costs compared with a base year in the demonstration groups compared with growth in patients in the same local market area who did not receive services from the demonstration groups. The quality metrics included those related to diabetes mellitus, congestive heart failure, coronary artery disease, hypertension, and cancer (breast and colorectal) screening.


Ten groups ( Box 1 ) participated in the demonstration and included approximately 5000 physicians and 220,000 Medicare beneficiaries. There were payments for four performance years. Payments occurred 16 times out of the potential 40 payouts (4 years × 10 participating groups) for a 40% success rate by a pay period measure.



Box 1





  • Billings Clinic, Billings, Montana



  • Dartmouth-Hitchcock Clinic, Bedford, New Hampshire



  • The Everett Clinic, Everett, Washington



  • Forsyth Medical Group, Winston-Salem, North Carolina



  • Geisinger Health System, Danville, Pennsylvania



  • Marshfield Clinic, Marshfield, Wisconsin



  • Middlesex Health System, Middletown, Connecticut



  • Park Nicollet Health Services, St. Louis Park, Minnesota



  • St. John’s Health System, Springfield, Missouri



  • University of Michigan Faculty Group Practice, Ann Arbor, Michigan



Medicare Physician Group Practice Demonstration: participating entities


That payout rate should give many readers pause, especially given the high levels of quality and organization represented in the list in Box 1 . This is an impressive list of well-run groups in the United States. Although there are advantages and disadvantages to being big, these are groups with some substantial advantages. Whereas some groups did make a fair amount of money, analyzing this by pay period shows that there is real risk of not making money using a shared savings model (at least in some periods) even for outstanding groups. For a group of more average size, running an ACO will be challenging in some circumstances and will require a high degree of planning, organization, and working capital to succeed.


ACOs in 2012—What We Knew in 2011


In March of 2011, the Federal government followed up on the initial legislation of the prior year and released additional information on ACOs in its proposed rules. These included details on many points, including the proposed sharing of savings. These included several critical points that provide insight into how regulators are envisioning the operation of an ACO. The first points of interest are who can be in an ACO and what an ACO can look like:



  • 1.

    ACO professionals (ie, physicians and hospitals meeting the statutory definition) in group practice arrangements


  • 2.

    Networks of individual practices of ACO professionals


  • 3.

    Partnerships or joint ventures arrangements between hospitals and ACO professionals


  • 4.

    Hospitals employing ACO professionals


  • 5.

    Other Medicare providers and suppliers as determined by the Secretary Of Health and Human Services.



The second point of interest is how risk is shared. In the proposal, there are two categories of risk sharing. In the first category, the ACO can share in savings, without downside risk for the first 2 years and then must share risk for losses by the third year. In the second category, the ACO assumes both upside and downside risks for the entire 3-year period. The added incentive for the latter is that the percentage of shared savings is higher in the riskier model, 52.5 versus up to 65 cents of each dollar saved, respectively.


Groups will have the option to opt out of the ACO agreement if they give 60 days notice. It might be expected that groups that choose the lower risk path and generate losses will exercise that option before hitting the third year. One hedge that the government has proposed is that it would hold 25% of savings to protect itself against losses later in the arrangement. The ACO will get that cash only if it successfully completes the 3 years.


The third point of interest is how an ACO is set up. An ACO is a legal entity that must apply to the government for a contract. There is no guarantee that an application will be accepted. As previously discussed, there is an opportunity to terminate the relationship before the 3 years are up.


The fourth point of interest is how this interacts with three key legal issues: Stark Law, anti-kickback statutes, and the Civil Monetary Penalty law or anti-gainsharing. A neuroradiologist who is a group leader will need to pay close attention to this and get legal advice if the decision is to join an ACO.


The fifth point of interest is, all of your costs as well as the cash payments from the government must be considered. If, to comply with the regulations, the information technology (IT) infrastructure must be upgraded or additional full-time employees hired in the back office, those costs have to be factored into whether or not the ACO will be successful for the group. In a financial analysis that was published in April of 2011 in the New England Journal of Medicine , the authors suggested that an ACO would require almost a 20% increase in their operating margin to break even in 3 years. This hurdle rate was due to the large up-front investment that was required and was based on data from the Physician Group Practice Demonstration. Although the rules have changed several times in the interim, the initial rules give a great deal of insight into how regulators would prefer to see ACOs run and perhaps a glimpse into how the rules may evolve in the future. The final rules (as of the time that this article goes to press) will be discussed later, but it is important to have a well thought out plan for the group that includes these insights into what is driving the creation of ACOs and perhaps their evolution.


In October of 2011, a final interim rule was released that clarified many of the above points. As this article goes to press, the government is not accepting further comments, so this seems to be the final form for now. However, this is an evolving story, so stay tuned. Further changes are not only likely, they are almost certain to occur. Key changes and updates included:



  • 1.

    Providers can be added or subtracted during the contract period, thus providing greater flexibility for groups that have turnover in physicians during the contract cycle.


  • 2.

    Meaningful use (incorporation of effective implementation of IT measures in health care) is a performance measure rather than a baseline requirement.


  • 3.

    The number of quality measures required for compliance in health care was reduced to 33 from the initial list of 65.


  • 4.

    Greater transparency about who is a likely beneficiary and there will be provision of a list to allow reconciliation between the ACO and CMS at end of the year.


  • 5.

    There is an option to avoid downside risk from the beginning and avoid that risk throughout the contract period. Although the reward will be greater for greater risk, this allows groups that are concerned about narrow margins to avoid a direct loss from their ACO participation.


  • 6.

    There is greater flexibility in start dates and eligibility.


  • 7.

    The 25% cash withhold is removed.


  • 8.

    Patients can receive care both within and outside of the ACO.


  • 9.

    A tax identification number can only be in one ACO, but a provider number can be in more than one. This should give neuroradiologists the opportunity to participate in more than one ACO in some arrangements. As always, stay up-to-date and consult an attorney before signing a contract.


  • 10.

    A governing board must include ACO participants and meaningful participation by beneficiaries. If there is an opportunity, someone from the group should seek out a leadership role in the ACO, to participate in decision making.


  • 11.

    Marketing regulations changed from approval requirements to use of a preapproved boilerplate for marketing materials from the ACO.



In addition to this list, there are several additional points that are worth emphasis. First, pay close attention to quality as plans are made and executed for participation in the plan. The rules include adhering to the 33 measures of quality that must be met to succeed as an ACO, as well as compliance with other governance and marketing regulations. Several of my colleagues (the older neuroradiologists) said, on hearing about ACOs, that they have seen this all before in other types of structures that have been built to try to control costs. My answer is, “Not quite.” This model is much more sophisticated compared with some of the health maintenance organization (HMO) models from late in the last century. Although many people involved would disagree, many observers have said that many of these models were often focused more on issues such as saving money or gaining market share than on improving health care quality. In an ACO, the quality goals are not only substantial, they are at the core of the model and will be enforced. If quality care is not provided according to those metrics, there will be no reward.


Another point that should be understood is that, although the patients will be assigned to the ACO, they will have the option to opt out of the program. This will necessitate making sure there are enough patients during the contract life to allow for patients who decide to opt out or who leave for other reasons. It also raises an issue that is not completely resolved as this article goes to press—what happens when a patient moves their care around. For example, consider a snowbird who gets her spring and autumn care in Philadelphia, but who summers in Bar Harbor and winters in Palm Beach (not a bad life if you can get it). Developing a transparent method that fairly allocates health care delivery among her providers and also prevents attempts to shift expensive components of care will be a challenge for CMS.


In closing this section, be reminded that the author has deliberately tried to show, not only the final form of the rules, but how they evolved, so that insight can be gained into how regulators view ACOs and how they may morph during a neuroradiologist’s career. It should be clear that this is still very much a work in progress and that there are deeper issues that will also need to be worked out. There are potential antitrust issues in health care collaboration as well as the possibility of creating local monopolies. These are only some of the issues that need to be addressed with smart legal help when deciding to join in an ACO. Finally, watch the contracts carefully as they evolve. Right now, CMS has reserved the right to unilaterally change the terms during the contract life, which is a clear legal concern and could conceivably lead to groups deciding to opt out if the changes prove onerous.


ACOs and the Role of Neuroradiologists


Many neuroradiologists who have contacted me about ACO participation seem to have one of two world views: (1) a neuroradiologist has to be in a large university or integrated practice or (2) be working on a contract for a small group of primary care physicians. Both of those models could be part of the future, but I would encourage you to think of other creative ways to participate in ACOs and similar organizations. The key to success or failure in either of the above discussed models (or anything in between) will be how a neuroradiologist sees his or her role. If one is willing to take on a leadership position in the overall care of patients, one’s expertise as a neurospecialist will provide value above and beyond one’s role as a strong film reader. One element of success will hinge on how well one is able to bring value in many other ways to the institution and its stakeholders. This article closes with a discussion of the neuroradiologist of the future.

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Mar 19, 2017 | Posted by in NEUROLOGICAL IMAGING | Comments Off on Accountable Care Organizations for Neuroradiologists

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