Western Pennsylvania Healthcare News

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Mike Cassidy, a shareholder in the Tucker Arensberg’s Business and Finance Department, concentrates his practice in Health Care Law, chairs the firm’s Health Care Practice Group, and is a member of the Employee Benefits Practice Group.
His practice as a  health law attorney includes the fundamental business transactions relating to the formation and governance of healthcare entities. Mike has extensive experience in third party reimbursement, managed care contracting, fraud and abuse, Stark issues, medical staff, peer review and credentialing issues, corporate compliance, and tax exempt organization issues. Mike’s healthcare experience also includes HIPAA and HIT privacy and security issues, including serving as counsel for the Regional Extension Center (REC) program, and very active in PAeHI and the Healthcare Information and Management System Society (HIMSS) related projects.
Mike was named to the list of Best Lawyers in America® in 2009, 2010 and 2011 for Health Care Law, as well as one of Pennsylvania’s Super Lawyers® for Health Care Law in 2005, 2006, 2007, 2008, 2009, and 2010.  He received the Pennsylvania Bar Association's "Excellence in Health Care Law Award" for 2003. Mike is the publisher of the Med Law Blog (www.medlawblog.com), the firm's health law blog.

Contact Information

Phone: (412) 594-5515
Email: mcassidy@tuckerlaw.com
LinkedIn: www.linkedin.com/in/michaelacassidy

The Progress and Promise of ACOs

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By Mike Cassidy, Esq.

Since Accountable Care Organizations (“ACO”) are one of the featured topics for the May edition of Hospital News, I thought it would be appropriate to revisit the progress and evaluate the promise of ACOs to date.

I last wrote on this topic in the December 2011 Thought Leader column, and indicated there had been little progress, at least with the federal ACO model, which is the Medicare Shared Savings Program as of that time.  I also cited a study done by Leavitt Partners in November 2011 entitled the “Growth and Dispersion of Accountable Care Organizations.”

The key findings of the Leavitt study stated there were 164 ACOs being developed, 99 by hospitals, 38 by physician groups and 28 by insurers.  Most of these commercial products were concentrated in higher income/higher population areas with the majority of the ACOs being concentrated in just eight states, the leader of which was California.

[Read more…]

Pioneer ACOs Announced by CMS

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Mike Cassidy

On December 19, 2011, CMS issued a press release announcing that 32 leading health care organizations across the country will participate in a new pioneer Accountable Care Organization (ACO) initiative.  CMS believes that the pioneer ACO initiative will “encourage” providers to deliver better and more coordinated care and expects that this could save up to $1.1 billion over five years.

CMS describes the pioneer ACO model as an initiative complementary to the Medicare Shared Savings Program designed for organizations with existing experience providing integrated care across a variety of health care settings.  The pioneer model is intended to test the rapid transition to a population-based model of care.

The pioneer initiative model differs from the Medicare Shared Savings Program in the following ways:

  • The first two years of the pioneer ACO model are a shared savings payment arrangement with higher levels of savings and risk than the Medicare Shared Savings Program.
  • Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population based payment arrangement and full risk arrangements that can continue through optional years four and five.
  • Pioneer ACOs are required to develop similar outcome-based payment arrangements with other payors by the end of the second year.
  • Under the pioneer ACO model, beneficiaries do not enroll in an ACO.  Primary care providers and other health care providers make the decision to participate in ACOs, meaning that beneficiaries will not need to take a proactive action to receive the benefits offered through an ACO.  Although ACOs are required to notify beneficiares of the ACO participation, insuring the beneficiary is aware of the new arrangement, but the beneficiary maintains complete freedom to visit any health care provider accepting Medicare.

Are ACOs the Answer?

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Mike Cassidy

By Mike Cassidy

It may seem contradictory that Accountable Care Organizations (ACO) are championed as the new answer to manage more efficiently (i.e. improve quality and reduce costs) when the most popular form of ACOs, i.e. the Medicare Shared Savings Program, established in 2010 as a component of the Patient Protection and Accountable Care Act has yet to launch a single ACO.  In fact, the regulations have just recently been finalized, and CMS is just now beginning to receive applications to participate in the Medicare Fee for Service Program as an ACO.

The ACO concept is probably misunderstood because there is no generally accepted definition.  Many people think of ACOs as the legal entities that will participate in the Medicare Program, but the term is generically being applied to many types of health care delivery systems.  Perhaps the simplest definition is one coined by Mark McClellan, who describes an ACO as “an organization seeking per capita improvements in quality and costs.”

While CMS has been developing the regulations for the Medicare ACO program, generic ACOs are already up and running, and in some cases have been for quite a few years.  A recent study by Leavitt Partners indicates that there are 164 identified ACOs across the country.  Of those, 99 are primarily sponsored by hospitals, 38 by physicians’ groups and 28 by insurers, and they tend to be developed in higher income and more populated areas of the country.  In fact, a majority of the ACOs are identified as being headquartered in only eight states, with California having almost twice as many as the next highest states.

[Read more…]

Final CMS Accountable Care Organization Regulations Provide ACOs More Flexibility

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Mike Cassidy

By Mike Cassidy

CMS has finally released the final rule for the Medicare Shared Savings Program, which is the program that establishes the rules for Accountable Care Organizations (ACOs).

The initial industry objections to the ACO concept and the proposed regulations was that it was so complicated, so limited and potentially so expensive that it would be impossible, or at least impractical, for any organization other than an all ready large and well established integrated delivery system to actually qualify as an ACO.  Interestingly enough, the entities that were already in existence and best suited for Medicare ACO qualification expressed little interest in the concept, presumably believing that they would qualify for the incentive programs and savings programs available from Medicare and other third party payors without the need of establishing an entity that qualified as an ACO within the requirements specified by CMS.  The final rules expect to relax those requirements and make ACOs more available and less risky, in an attempt to attract more potential participants.

Early predictions were that ACOs would be developed to cover less than 5% of the available Medicare fee for service beneficiaries.  It is too early to tell whether these relaxed regulations will change that outlook.

The ACO regulations are voluminous.  For those interested in establishing ACOs there is no substitute for actually parsing the regulations section by section.  However, for those interested in simply understanding what the changes have been, the Commonwealth Fund has published a well written and organized summary of the changes and a table identifying those changes, which is linked to this article.

 

U.S. Physician Practices Spend Four Times As Much As Payer Administrative Money As Canadian Counterparts

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Mike Cassidy

A commonwealth fund supported studies reported some key findings:

1. Physician practices in the United States spent $82,975.00 per physician per year interacting with payers compared with $22,205.00 in Canada.

  • If U.S. physicians had similar administrative costs to their Canadian counterparts, the total annual savings would be $27.6 billion dollars.
  • U.S. nurses and medical assistants spent 20.6 hours per week on administrative tasks related to health plans, which is nearly 10 times the 2.5 hours spent by Canadian nursing staff.

I have attached a link with a scan of the highlights of the study.