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The ISMA brings you updated information on Indiana ACO activity
e-Reports, October 12, 2010
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In August, ISMA Reports introduced the idea of accountable care organizations or ACOs (see this Aug. 9 ISMA Reports article). ACOs became known through the health reform law, an idea presented in studies by the Dartmouth Institute, the Brookings Institute and review by the Medicare Physician Advisory Committee.

A major concern is how federal agencies will perceive ACOs in relation to antitrust and anti-kickback statutes. Guidance and advisory opinions are expected. Yet, more leaders are openly discussing plans to move toward an ACO model; it’s likely many more are keeping discussions private.

Speaking at ISMA’s 11th District meeting last month, Tom Neal, attorney with Krieg DeVault, suggested ACOs will touch physicians financially and clinically. He urged attendees to “get savvy” and lead this new movement. Here are details about some Indiana activity to date.

Sisters of St. Francis Health Services (SSFHS)
With 13 hospitals and 550 employed physicians in Indiana and Illinois, SSFHS is carefully examining two ACO models, open and closed.

Gene Diamond, CEO of SSFHS Northern Indiana region, explained the open model includes appointed physicians, that is hospital employed and non-employed, plus physicians not on the medical staff. A closed ACO would include employed and non-employed physicians who are on the medical staff of a hospital or its aligned hospitals.

“Obviously, the open model presents significant legal and operational challenges,” said Diamond. “For example, how can the quality of care provided by physicians who aren't on your medical staff be determined? What are the legal implications of having them participate if they're not accountable, etc.? There are lots of thorny questions, few answers and many concerns.”

He noted the closed ACO model seems to be preferred. “But if someone can figure out how to make the open model work well, it will play a significant role, too.”

Diamond offered assurances that physicians would hold leadership positions with any SSFHS ACO. In fact, he said, “A physician will be in charge of our ACO.”

Discussing physicians, Diamond advised you to keep abreast of what’s happening with ACOs in the state. “Read, attend meetings and talk to your colleagues. Now is not the time to say: ‘I’m too busy,’ or ‘it won’t affect me,’ or ‘I’ll wait to see what happens.’ Things will continue to change and the players are jockeying for position.”

Community Health Network
Bryan Mills, CEO of Community, told an audience at an Indianapolis Business Journal event that his hospital system is integrating with physicians to form an ACO. The system has 550 employed or contracted physicians and is in talks with “many others.” (IBJ 9/14/10 www.ismanet.org/linkto/Community)

Tim Hobbs, M.D., CEO of Community Physicians, explained, “In the models presented so far, any financial gains are voided if an organization does not meet certain quality and patient satisfaction criteria.”

He noted ACOs differ from HMOs because ACOs are provider based.

“Although these models will be extremely difficult and complex to implement, I believe this concept has a chance of improving care for patients and sets the payment system in the right direction,” Dr. Hobbs said.

“Physicians who lead and work in a number of our nation’s large physician group practices and physician-led health systems played a major role in generating the concepts contained in these models. The American Medical Group Practice Association has been advocating for such systems for some time.”

Clarian Health
Clarian representatives provided ISMA Reports the following statement:

Clarian Health is transitioning to an accountable care organization that is centered on preventative care and wellness, coordinated patient care and disease management, and believes it has in place many of the elements and capabilities that are necessary to become an ACO.

Doctors will play a lead role in implementing ACOs and in fact, hospitals cannot create them without partnership with physician groups. Physicians are key to the care coordination that is central to the ACO concept, which is consistent with Clarian’s values and vision of providing preeminent patient care.

American Health Network (AHN)
Ben Park, M.D., AHN’s president and CEO, confirmed the all-physician organization intends to become an ACO. Dr. Park, who noted ACOs were designed for medical groups, said AHN has the infrastructure and was formed 15 years ago to be an ACO.

“ACOs must focus on improving health in the outpatient environment to reduce inpatient utilization. The reduction in inpatient use generates savings, which the ACO retains,“ Dr. Park said.

To generate savings AHN must:

  • Manage chronic disease aggressively
  • Improve coordination of care when patients transition between care settings
  • Aggressively monitor patients between physician visits

Such results will require these organizational capabilities and more:

  1. Complete and timely information about patients and the services they receive
  2. Technology and skills for population management and coordination of care
  3. Coordinated relationships with specialists and other providers
  4. Ability to measure and report on the quality of care

Each ACO must recruit at least 5,000 patients for Medicare contracting. Dr. Park said AHN has several times that number.

“We are not all that happy about many parts of health care reform,” he said, “but we are excited about the chance to be rewarded for good health outcomes.”

For more on ACOs, see information from CMS and the AMA.

No firm answer yet to one key question

Legal experts as well as government officials are still sorting out the rules that will govern accountable care organizations, rolled out with the Affordable Care Act.

An ISMA Reports August article on ACOs said analysts tended to agree physicians would be able to sign “with only one ACO having a Medicare contract.” Yet, Tom Neal, attorney with Krieg DeVault, speaking at the ISMA’s 11th District annual meeting, said he believes things will break down differently for primary care physicians and specialists.

Commenting about physician participation in more than one ACO, Neal said, “This is the question everyone wants to have answered, and the one which has no definitive answer that I know of right now.”

He said general surgeons, for example, who perform procedures in more than one hospital in a community and accept referrals from a variety of primary care physicians may need to affiliate with more than one ACO – if those community hospitals each form a different ACO. Therefore, variations in ACO structure will likely be unavoidable.

“It seems to be a scenario that has the (lawyer) answer physicians don’t like: It depends.”

Keep reading ISMA Reports for updates.

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