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Prepare: You may be asked to join an area network
e-Reports, August 9, 2010
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Physicians are being courted to join clinically integrated networks or accountable care organizations, as new payment models bring change to Indiana and the nation
If you haven’t yet felt like a top recruit with offers from pro sports teams, you might real soon.

Networks are forming in Indianapolis and around the country to clinically integrate physicians and hospitals -- or perhaps large groups of doctors with smaller groups. Here’s information you’ll need because the effort will likely spread to your area.

The reason? Starting Jan. 1, 2012, Medicare – and likely other insurers – will start seeking “shared savings” contracts with networks of health care providers, rather than individual entities. The mandate has sparked a race for hospital systems to align with physicians so networks are in place to win these Medicare contracts.

The idea is to increase communication and collaboration to better manage patients overall health. With that idea comes a new acronym: ACO. The letters stand for accountable care organization, a model intended to bring more accountability for the cost and quality of health care for a defined population.

However, analysts seem to agree the law limits a physician to signing with only one ACO having a Medicare contract. That creates a competitive environment that could make you choose a hospital or physician network with which to align.

The details, so far
Specifically, health care reform legislation tasked Medicare to contract for “shared savings programs,” to reduce spending by better coordinating care and reducing procedures and admissions. A portion of those savings would then be returned as incentive payments to the ACOs for their hospitals and physicians.

Centers for Medicare & Medicaid Services (CMS) interprets the health care law as specifying an ACO can be:

  1. Physicians and other professionals in group practices
  2. Physicians and other professionals in networks of practices
  3. Partnerships or joint venture arrangements between hospitals and physicians/professionals
  4. Hospitals employing physicians/professionals
  5. Other forms the secretary of Health and Human Services determines appropriate

In each 12-month period, beginning 2012, a participating ACO must meet certain quality performance standards to earn a percentage of any savings. The benchmark for an ACO may be based on the most recent three years of Part A and Part B fee-for-service expenditures for the ACO’s assigned beneficiaries. No penalty will be incurred for not reaching payment targets – at least for now.

Currently, CMS is seeking input to draw up proposed rules for ACOs before the year ends. The rules, as well as the structure and features of ACOs, are expected to evolve over time. Keep reading ISMA Reports for updated details.

Start thinking about it
If you’ve not been contacted about joining an ACO, you might start thinking about what entity in your area you may prefer aligning with for the future. That does not mean you will become an “employed physician,” but it does mean you likely could select one hospital system or medical group in your area you trust and value enough to collaborate for common rewards.

Spreading north and south, new ACOs were recently announced for Michigan’s Upper Penninsula and for Columbia, S.C. A couple examples closer to home: Clarian Health/IU School of Medicine’s Indiana Clinic has signed on more than 400 physicians toward a goal of 1,500 networked physicians. And Community Health Network in Indianapolis has contracted or hired more than 1,000 doctors for its growing network.

What started the ACO drive?
Some see results of a Medicare demonstration project, started in 2005, as driving change toward larger delivery systems. Results of CMS’ Medicare Physician Group Practice Demonstration, in its final year, indicate proactive, coordinated care has potential for larger revenue savings, nearly $60 million for Medicare over three years.

CMS officials noted last August: “One of the unique features of this demonstration is that physician groups have the flexibility to redesign care processes, invest in care management initiatives, and target patient populations that can benefit from more effective and efficient delivery of care. This helps Medicare beneficiaries maintain their health and avoid further illness and admissions to the hospital.”

Read more about the project on the CMS website.

A subsequent Government Accountability Office report determined the increased size of the participating groups offered “size-related advantages.” Namely, institution affiliation improved access to financial capital, electronic health records and pay-for-performance programs.

Read a Health Affairs policy brief here.

Accountable care organization or ACO:

A clinically integrated network of physician groups or physicians and hospital(s) focused on managing patient care in a way that meets cost and quality targets. Incentives – from cost savings – are distributed for achieving those goals. ACOs maintain a strong primary care network, share patient health care information and adopt common treatment protocols. Under Medicare, an ACO must provide care for a minimum of 5,000 patients and participate for at least 3 years.

Voice an opinion on ACOs

Two resolutions on ACOs (Res. 10-12 and Res. 10-25) have been submitted for consideration by the ISMA’s 2010 House of Delegates. Make your voice heard on this issue. Attend convention Sept. 25 and address the reference committee, make certain your county delegate knows your opinions or enter your thoughts on the convention message board.

In District 11?

ISMA members in District 11 Medical Society (Cass, Carroll, Grant, Howard, Miami and Wabash) can attend an annual district meeting Aug. 25 in Burlington to learn more about accountable care organizations. For details, call Tom Dixon, field representative, at (800) 257-4762.

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