DECEMBER 18, 2012

Welcome to the Accountable Care Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the ACO Summmit


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Houston's Kelsey-Seybold Is First ACO with NCQA Accreditation
Houston's Kelsey-Seybold, a 63-year-old, multi-specialty clinic with 20 locations in the region, is the first healthcare organization to receive accreditation as an accountable care organization (ACO) by the National Committee for Quality Assurance (NCQA). The rigorous accreditation process involved evaluation of 14 standards and 65 elements. The clinic received a Level 2 accreditation, the highest level achievable in the first year. "By being the first organization to earn NCQA ACO Accreditation, Kelsey-Seybold has demonstrated to payers and other purchasers that it has met challenging requirements designed to show the efficiency, integration and high quality expected of an accountable care organization," NCQA President Margaret E. O'Kane said. (Inside Health Policy, December 14, 2012)

ACOs, Already Surging, Poised for Even More Growth
Oliver Wyman, an international consultancy, has reported that as many as 31 million patients are affected in some way by ACOs and 2.4 million Medicare patients receive their care through an ACO. Leavitt Partners has counted 328 ACOs as of November 1, 2012. CMS identified 32 pioneer ACOs in December 2011, 27 additional ACOs were designated in the Medicare Shared Savings Program (MSSP) ACO initial round and 89 organizations were added in the second round in July, 2012 for a total of 148 Medicare-related ACOs. Approximately 500 organizations have applied for the third round of MSSP designations. Conventional wisdom puts the number of new sites that will be designated for the MSSP at around 200 increasing the total to 348. (amednews.com, December 10, 2012)

6 Early ACO Mistakes to Avoid
Two experts share here their advice on what mistakes early ACOs have made and how to avoid or overcome them: 1) Overcomplicating initial steps in the rollout, 2) Relying on overly complex IT solutions, 3) Lack of proper manpower, 4) Missing key leadership buy-in, 5) Not seeking patient buy-in, and 6) Neglecting to map network leakage. (Becker's Hospital Review, December 6, 2012)

Minn. ACO Uses MTM to Reduce Hospital Readmissions
Hennepin County Medical Center (HCMC) in Minneapolis, MN, significantly reduced hospital readmissions and emergency room visits by forming an accountable care organization (ACO) and using enhanced medication therapy management (MTM) services. HCMC is a 454-bed hospital with 60 clinics and 16 ambulatory pharmacists providing MTM services. After a year, HCMC reduced hospital admissions by 42%, reduced ER visits by 37%, and reduced the cost of care by an average of $2,500 per patient. "We had 8,000 patients, so we reduced costs by $24 million," said Bruce Thompson, RPh, MS, director of pharmacy services for HCMC. (Modern Medicine, December 1, 2012)

Survey Highlights Physicians' ACO Plans, Technology Wishes
A new three-part technology survey of 200 practice-based physicians by EHR vendor Greenway provides insights into physicians' attitudes on partnerships with other health organizations. More than 20% said they have already chosen at least one ACO partner and 60% said they are considering ACO partnership. Also, 50% of the physicians would seek alignment or direct employment with a larger health system if Medicare and Medicaid reimbursements continue to fall. (Physician Practice, November 29, 2012)

Blum: CMS Eyes Cancer Drug Pay Reforms, Part D Spending Targets in ACOs
Jonathan Blum, CMS Medicare Chief, said CMS is evaluating new pay methods for oncology services and how expensive cancer drugs are reimbursed under Part B. "Does the incentive structure that was created in 2003 best serve these competing goals of making sure beneficiaries have access to every drug possible and also making sure that the program gets the best value for the reimbursement," he asked. "I'm not sure what the future holds and I'm not sure what the answer is, but it's one that we're watching carefully. It's one that we're mindful of and it's striking how much we're spending for a handful of drugs that continue to grow." (Inside Health Policy, December 11, 2012)

Medical Home Eyes ACO Status
Family Medical Associates of Raleigh (N.C.) recently received NCQA Level III Medical Home designation. "We had already attained NCQA recognition for our diabetic and hypertension care, and we wanted to add to it [level III recognition]," says Janet Spangler, practice administrator at the 9-provider group (which has already attested for Stage 1 meaningful use). She says their next step is to learn how to produce in the two accountable care organizations in which they participate and this opens up new payment incentives with many payers. "The payers want us to build better communications between family practice and specialists. Our goal is to be cost effective in the way we are managing patients." (HealthData Management, December 10, 2012)

CBO Finds Drug Use Cuts Health Costs as CMS Eyes Rx Adherence Policies
The Congressional Budget Office (CBO) has released its study on drug adherence which found that Medicare costs go down when seniors take their drugs as prescribed. This finding could boost CMS' interest (demonstrated in an April 2, 2012 call letter) in allowing Part D plans to share in savings resulting from medication adherence programs and also allowing private plans to integrate medication adherence with accountable care organizations. Currently only 25 percent of patients follow their long-term medication regimens. It is estimated that there could be as much as a $10 return for every $1 spent on medication adherence. The April 2nd call letter said in part, "We believe that Medicare ACOs provide a potential platform for such collaboration with Part D sponsors and encourage these entities to form appropriate business arrangements that support improved pharmacy care coordination, provided such arrangements comply with all laws and regulations." (Inside Health Policy, December 6, 2012)

Calculating Provider Revenue Loss in an ACO

- click graphic for larger version and full resource -

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National Trends in Health Care Reform

Elliott Fisher, MD, MPH
The Dartmouth Institute for Health Policy and Clinical Practice, Lebanon, NH

Mark McClellan, MD, PhD
The Brookings Institution, Washington, DC

Susan Dentzer, MA
Health Affairs, Washington, DC