Feds: ACO regulations will tie quality to savings

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Health and Human Services and the Centers for Medicare & Medicare Services released long awaited proposed accountable care regulations yesterday, estimating it could save Medicare millions over the next three years.

Medicare ACOs would act as incentive programs, pushing hospitals, physicians and other health care providers to provide high-quality care and keep patients out of the hospital or from being readmitted, federal officials noted. Medicare savings estimates range from $510 to $960 million over the next three years.

In a conference call with reporters, HHS Secretary Kathleen Sebelius used wound care and diabetes as examples of ways that organizations could save money.

“This will align the way we pay for care with the way we know is the most effective,” she said. “As part of an Accountable Care Organization a hospital that follows up with a patient, [for example] to make sure she gets the right wound care, can share in the savings that comes when that patient has a successful recovery with no readmission.”

In addition to physicians and hospitals, high-quality long-term care facilities will have new opportunities to profit, an industry expert told McKnight's yesterday.

“ACOs will flip the value chain on its head,” said Dr. Jeff Gruen, the director of Health Care Services, PRTM. “There is a big opportunity for long-term care to partner with physicians and hospitals in ways they haven't in the past. It will improve the care experience.”

New quality indicators fall under the areas of patient/caregiver experience of care, care coordination, patient safety, preventive health and at-risk population/frail elderly health.

The proposed regulations include two models for ACOs. The first would allow an organization share in savings only for the first two years and share in savings and losses in the third year, which CMS administrator Donald Berwick described as “a more gradual on-ramp.” The second would allow an ACO to join and have a sharing of savings and losses for all three years, which would leverage more risk with more potential benefit. Berwick says it is unknown how many ACOs there will be nationwide, but in order to participate one must have 5,000 beneficiaries.

"Those with resources should try to do something aggressive,” Gruen recommended. “It's a bad thing for long-term care facilities that do not have the wherewithal to embrace the new business model. It can be a good thing for those who do.”

But either way, the idea behind quality indicators as the key to savings is solid, he said.

“The concept of tying ACO payments to quality measures is a very good thing to do,” Gruen said.

The American Health Care Association (AHCA) also applauded the proposed rules, stating that “properly structured, ACOs have the potential to improve patients' health by delivering reliable access to quality care.”

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