The PP ACA, stored as HR 3590 and signed into law on March 23, 2010, is 906 pages long. Most of the bill consists of amendments to other portions of the Laws of the United States as enumerated in the United States Code (USC). The first 12 pages of the law are the table of contents and the last 141 pages are amendments. This leaves 753 pages of the initial law as proposed. Believe me, the act is not riveting reading. (If you are interested, send me an e-mail or comment and I will forward a copy of the table of contents with page references to the bill referred to above.) Part III of Title III (from page 271 -297 or 3% of the bill) refers to “Encouraging Development of New Patient Care Models”. One of these models is the Shared Savings Program, which refers to the beginning of the definition of Accountable Care Organizations. Contracts for ACOs are to be initiated by January 2012. ACOs must be responsible for costs of both Part A (Hospital Care) and Part B (Supplementary Medical Insurance Benefits….) which include: Physician Fees, services of Nurse-Midwives, Psychologists, and Nurse Anesthetists as well as Nurse Practitioners or Clinical Nurse Specialists and provision of prosthetics. (There is nothing in this version of the bill on Physician Assistants) The bill also precludes participation in an ACO if the group is also participating in other programs that may include shared savings programs. Such programs may be proposed by the Center for Medicare and Medicaid Innovation, which will also be established under this legislation. These programs leave a great deal of uncertainty as to which model one wants to initially explore.
In the ACO portion of the law there are sets of requirements that ACOs should meet:
(1) There are 5 groups of requirements for providers who may participate
(2) There are 8 groups of requirements for financial arrangements including:
a. A three-year commitment for the ACO to remain in the program.
b. Minimum provider and patient (beneficiary) numbers
c. Leadership structure including both administrative and clinical representation
(3) There is a group of 4 reporting requirements including quality measures
(4) There is a specific provision that forbids duplication of participation with other SSPs (see above)
The amendment section of the bill also allows the secretary to explore other payment models, including not being responsible for ALL of the components of Part B. In addition the amendments allow ACOs to work with “other third party arrangements”. In fact, the Secretary may give preference to ACOs that work with both CMS and other payers.
One must also keep in mind that the Secretary of Health and Human Services (currently Mrs. Sebelius) is obligated to explore other models. These include programs to reduce hospital readmissions, an extension of gainsharing initiatives, as well as pilot programs on payment bundling. The latter is also to begin in 2013.
Bundling projects have been around since at least 1996 when the CABG Program involving 7 hospitals resulted in savings to Medicare of approximately $42,000,000 (Almost $73MM in today’s dollars). At the same time these hospitals had an approximately 20% risk adjusted reduction in mortality while maintaining higher patient satisfaction. The Acute Care Episode Project that is currently underway is also demonstrating savings in some of the hospitals that have contracted with CMS.
Are there opportunities for systems that are better aligned with their medical providers to excel in the era of PP ACA? The above summary of some of the provisions of Title III would suggest that there are many. Those systems that have closely aligned with their physicians or who are now attempting to working with their physicians will have a leg up on others in their geography when it comes to providing services within the parameters of the new law.