JUNE 19, 2012

Welcome to the Accountable Care Update eNewsletter
This issue is sponsored by ACO Summit

CMS Accepting Advanced Pay ACO Applications for ACOs Starting Jan. 1
CMS announced on June 12th that applications for parties interested in participating in the Advanced Payment Organizational Model of Medicare's Shared Savings Program must submit their letters of intent by June 29, 2012. The performance period for these ACOs will begin January 1, 2012. The Advanced Payment Model is intended to attract more provider-based and rural organizations. (Inside Health Policy, June 12, 2012)

Data: Strong ACO Growth Continues
Leavitt Partners' survey of accountable care organizations identified 221 ACOs in all but five states; California is home to the most ACOs with 25. Hospital-sponsored ACOs accounted for 53% of all ACOs. Physician-sponsored ACOs grew from 38 to 70 in the past six months. (H&HN Daily, June 15, 2012)

ACOs Are Here to Stay - Whatever the Court Decides
Gene Lindsey, MD, President and CEO Atrius Health, an affiliation of six leading medical practices in central and eastern Massachusetts, and Harvard Vanguard Medical Associates, its largest affiliate, opines on the future of accountable care organizations in The Hill. It is his opinion that ACOs will continue regardless of the future of the Affordable Care Act (ACA) because, "...an ACO is a sensible, efficient, and patient-centered way to keep people healthy and then care for them during illness." ACOs will succeed where managed care of the 1980's failed because we now have "... information technology and incentives to ensure that appropriate care is provided, the ability to measure aspects of quality across providers, and ways to measure patient experience and outcomes." (The Hill, June 12, 2012)

Medicare ACO Participants Hit Firewall
Participants in the first round of CMS's accountable care organization program are experiencing difficulties accessing the CMS data they require. Marilyn Tavenner, acting CMS administrator, has said that CMS is working to streamline access to the Medicare beneficiary data essential to ACO operations. (ModernHealthcare.com, June 7, 2012)

Integration Shown to Reduce Excess Referrals
Clayton Christenson and colleague Vineeta Vijayaraghavan report in the Health Affairs blog that integrated health systems that incorporate both and insurance and provider entities are able to reduce the utilization of specialists. (See the Resource section below for a link to a related white paper.) As reducing the use of specialty services is central to the control of healthcare costs, the authors note the ability of integrated systems to more easily sever the link between volume and compensation affords them a unique opportunity to reduce utilization. (Health Affairs Blog, June 14, 2012)

Blum: Data Sharing, Common Governance among ACO Challenges
Jonathan Blum, CMS Medicare chief, reported at the ACO Summit in Washington, DC, on June 7th that providing ACOs with sufficient claims data and getting physicians to report to a common governing body have been ACOs' most vexing problems. CMS is committed, he says, to sharing data with ACOs. Getting physicians to report to a single entity is important for providers, as tremendous flexibility on Stark and other waivers has been granted in the expectation that organizations are moving in a common direction. (Inside Health Policy, June 7, 2012)

ACOs Motivate DaVita's Multibillion-dollar Physician Practice Acquisition
Healthcare Partners, a company with 700 employed physicians and a network of 8,300 independent physicians in California, Florida and Nevada, has agreed to be acquired by DaVita, the Denver-based dialysis company. DaVita, which runs the Accountable Kidney Care Collaborative, and Healthcare Partners, a Pioneer Accountable Care Organization, intended this move to give them a stronger foothold in accountable care organizations. (amednews.com, June 7, 2012)

Physicians: Relaxing Anti-Fraud Laws Needed to Ease Delivery Reform
The AMA says that Congress must relax the anti-fraud laws, generally referred to as "the Stark laws" after its author Rep. Pete Stark (D-CA), to allow physicians to participate broadly in new physician-led delivery reforms spawned by the Affordable Care Act. Similar concerns have been raised by the Government Accountability Office (GAO) which has pointed out that no exceptions or safe harbors have been granted for quality and efficiency arrangements and this could hinder implementation of such efforts. Nevertheless, Rep. Stark maintains congressional involvement is neither necessary nor appropriate at this time. (Inside Health Policy, June 18, 2012)

If Accountable Care Organizations Are the Answer, Who Should Create Them? Who Should Create Accountable Care Organizations?
Two noted healthcare thought leaders, Victor Fuchs, PhD, and Leonard Schaffer, weigh in on the future of accountable care organizations in this JAMA editorial. They conclude that health plans are the only reasonable sponsor of successful ACOs. They eliminate employers as having a limited attention span, hospitals as being to body-in-bed oriented and physicians as intellectually too independent. They say, "In nominating health plans as the most feasible candidate to get ACOs rolling within the available time frame, the logic developed by Sherlock Holmes is instructive. When Dr Watson asked Holmes how he arrived at an unusual solution to a difficult case, Holmes replied, 'When you have eliminated the impossible, whatever remains, however improbable [italics in original], must be the truth.'" (JAMA, June 6, 2012)

Disruptive Innovation in Integrated Care Delivery Systems

This challenging white paper comes from Innosight Institute which was developed by Clayton Christensen, author of The Innovator's Prescription and other works on the importance of change and innovation.

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2012 ACO Summit Opening Address

Marilyn Tavenner, MHA
Acting Director, Centers of Medicare and Medicaid Services, Washington, DC