How to have healthy awareness and educate yourself regarding ACOs, expert advises

November 15, 2014

An examination on accountable care organizations and how they may impact ophthalmology.

Take Home

An examination on accountable care organizations and how they may impact ophthalmology.

 

By Stephanie Skernivitz

Incline Village, NV-An author once said that the first step toward change is awareness. The second step is acceptance.

Along those lines, Bruce Maller-president of BSM Consulting, Incline Village, NV-tested the awareness of his audience of primarily specialists in ophthalmology, asking whether they were familiar with accountable care organizations (ACOs) forming in their markets? A solid 60% answered affirmatively at the ASCRS session at which he spoke in Boston.

More in this issue: Editorial: Puff the magic pot dragon

Though awareness of ACOs appears to be on the rise, acceptance is still slow to come. When he followed up that question with whether any specialists in the audience had signed an agreement to be part of an ACO, only 19% answered yes.

He said the real “noise” of the session was not so much about ACOs, but more so about the impact of the Affordable Care Act (ACA) on providers and payers.

In his presentation, Maller offered what he dubbed a “distillation” of what specialists need to know within the context of their practices and surrounding communities, focusing on key ACA provisions, an ACO overview and their current activity, and how ACOs might impact ophthalmology.  

Specifically, he chose to address:

1) Medicaid expansion

2) Impact of health insurance benefit exchanges

3) Introduction of ACOs and current activity

Medicaid expansion

According to Maller, the big push behind the ACA’s Medicaid expansion is to get more people insured.

 

“It’s essentially raising the poverty line in a sense for purposes of who’s eligible. Part of the government’s plan is to bring in another 15-20 million people who are currently uninsured. The vehicle to do that is through Medicaid,” Maller said.

While not all states are participating in Medicaid expansion, many are, and the impact by state or region can be dramatic, according to Maller. In a graphic he provided, it indicated that 26 states (including D.C.) were to implement expansion in 2014: two states were seeking to move forward with expansion post-2014, and the remaining 23 states were not moving forward yet.

As an example, he cited New Mexico, which may have close to 500,000 people in the state covered by Medicaid. With the Medicaid expansion, he said that number would essentially double. Such a ripple effect will likely occur in other states.

“This will have a dramatic effect on your marketplace, because the way this is all going to get administered is through managed care. One theme you’re going to pick up through the ACA is how the ACA empowers managed care to exercise greater leverage in your markets,” Maller said.

Benefit of health insurance exchanges

The second dimension of the ACO discussion is the exchanges.

 

“Exchanges simply are another vehicle designed to bring more people into the covered insured roles. These are not to be ignored. All 50 states have them, it’s just a matter of whether your state is or the feds are administering the benefit exchange,” he said.

Types of ACOs and activity

As to why ACOs were embedded in the Act, Maller says the answer is multifaceted.

“It’s all about the Baby Boomers, it’s all about Medicare, it’s all about cost, and the government has a problem on its hands and it needs to figure out how it’s going to manage the cost equation for the Baby Boom generation as it gets older. ACOs are the vehicle to achieve that. They’re being formed by providers (doctors and hospitals),” Maller explained.

How it works, he said, is that Medicare beneficiaries are assigned to an ACO based on their doctor. As a patient, you may simply get a letter, according to Maller. The assignment is based on plurality of care by the primary care doctor. If that primary care doctor is in the ACO, the patient gets assigned in network.

“One interesting phenomenon is that patients can choose to opt out (at the time of care) of an ACO to which they have been assigned, similar to out-of-network coverage. Here we are trying to control costs, but we’re going to allow patients the ability to opt out at the time of care,” Maller said.

 

But of import with regard to the opting out privilege, he noted that this option is part of Phase I. Do not expect this privilege to continue in the future, he warns.

“There’s going to be pressures to force those primary care doctors and others to make sure those patients are seen in network,” he said.

Overall, ACOs-if working according to purpose-are designed to improve quality outcomes, improve overall care, and lower costs.

Currently, there are 366 Medicare ACOs, which fall under the Medicare Shared Savings Program (MSSP, which is part of the ACA).  About 5.3 million Medicare seniors are currently in these 366 ACOs.

In addition to the Medicare ACOs, more non-Medicare (public and private) ACOs are cropping up nationwide.

According to Maller, many private sector ACOs mimic the MSSP model, but others provide different payment arrangements (e.g., capitated models or bundled payments, etc.). Most require some form of quality reporting to achieve full payment.

At their roots, all ACOs appear to share one common element.

“All ACOS are trying to follow the same mantra of encouraging you to a) play and b) play by the rules,” he said.

As for which doctors are forming ACOS, he said to look to primary care.

 

“They’re the ones who are trying to exercise control over market share. They’re smart enough to figure out if they can aggregate, they have an opportunity to a) be an ACO, b) have a seat at the table, c) control market share, then d) dictate to you all as specialists how this is all going to work,” Maller said.

In addition to primary care physicians, don’t forget the payers, who are also intent on determining how to operate effectively in the ACO market.

“In many cases, they’re forming their own or they’re forming a joint venture with provider organizations,” he said.

In aggregate, there are over 600 Medicare-based (366 or 60.4%) and estimated private and public ACOs (240 or 39.6%). It represents about 18.2 million covered lives today (estimated Medicare-covered beneficiaries, 5.3M or 29.1%; estimated covered patients through private and public ACOs, 12.9 million or 70.9%).

ACO strategizing

One primary goal of ACOs will likely be to use the network as leverage in negotiations with commercial payers, according to Maller.

“Many will use them as opportunity to participate in expansion of Medicaid managed care programs. There’s an attempt to aggregate providers to achieve better care coordination and lower cost. They’re going to have their own products, compete with the same people they’ve been providers for (meaning they’re going to compete with payers). They will market the ‘network’ product direct to consumers and thereby attempt to gain additional market share,” he said.

 

As for a healthy response to the situation if you’re unsure where you fit in, Maller advises not to overreact.

“Don’t ignore it either. Assess your personal and professional goals.  Consider how these changes are likely to impact your practice. Continue to focus on building efficiencies. Get better at tracking and measuring. Focus on building your cash pay service offering. Be a little smarter about how you run your business. If it were me, I’m always looking to diversify in things where government doesn’t control what I do. You have to ask yourself what health care purchasers really want from you,” he said.

In closing, he gave several take-away pieces of advice.

 1) Demonstrate that you can deliver value to your patients. Value is certainly a watchword.

2) Be willing to accept financial risk.

3) Maintain an ability to measure and provide relevant data.

4) Be willing and able to cover all aspects of vision and medical/surgical eye care.

“The best advice is to get educated on how these changes are impacting health care delivery and contracting at the local level,” he concluded.