Responding to concerns that its original regulations stymied reform efforts, the Centers for Medicare & Medicaid Services (CMS) made a number of concessions in its final Accountable Care Organizations (ACOs) rules. Nonetheless, many organizations remain hesitant about entering the ACO fray and continue weighing the pros and cons of setting up the infrastructure demanded by CMS.

Put simply, the ACO movement has potential to gain momentum, but there remain several obstacles that must be addressed to ensure success. Specifically, timeframes remain aggressive, and many of the healthcare organizations interested in participating in ACOs have limited experience with the required infrastructures. Plus, compliance with standards for data sharing, care coordination and case management requires substantial investments with no expectation for near-term ROI.

[Q&A: Why hospitals won't profit from the ACO approach.]

Further, some of the quality and performance measures required under the ACO structure are new concepts for many prospective stakeholders, in particular hospitals and physician groups. While CMS did include the hospital- and physician-focused measures with which they are most familiar, many of the most significant metrics are more holistic health plan measures about which these stakeholders are less knowledgeable.

Thus, to achieve the overriding goals that form the premise behind ACOs—enhancing patient care and creating cost efficiencies—healthcare organizations need a clear understanding of the infrastructure and resources necessary to create a foundation that can deliver desired outcomes and ROI. For many, those elements remain the missing link to moving forward in a meaningful way.

Forward Momentum
By easing some of the more rigorous requirements, many of the concessions made by CMS in the final ACO regulations will go a long way toward encouraging broader participation. One notable change is that federally qualified health centers (FQHCs) and rural health clinics (RHCs) will be allowed to form an ACO rather than just participate in one. This offers opportunities for ACOs to be established in underserved areas where providers may not otherwise have been willing to go.

CMS also altered the enrollment process. Participation is still voluntary, and beneficiaries can opt-out. However, under the final rules, ACOs will be better able to identify members through a quarterly prospective assignment that measures where a beneficiary gets a plurality of primary care services. Reconciliation will occur at the end of each year. Under the draft rules, ACOs would have passively enrolled members with no way of knowing if they were counted in the savings calculation.

Bowing to heavy criticism, CMS also streamlined the number of quality measures from 65 to 33, to be phased in over a three-year period. By reducing the number of measures that must be managed, this change helps position less experienced ACO entities to succeed.

For more cautious ACO prospects, mandatory downside risk was removed in one of the two shared-savings reimbursement tracks, and first-dollar shared savings was included for all participants once minimum thresholds are met. While this is an improvement, concerns remain over a requirement that smaller ACOs show savings of as much as 4 percent before sharing in financial rewards.

[Commentary: Will the final ACO rule lead to a new paradigm?]

Another concession is removal of the mandate requiring that 50 percent of participants be utilizing electronic medical record (EMR) systems that are certified for meaningful use. It is important to note that, though no longer required, use of EMRs remains in the quality assessment process.

Finally, CMS announced an Advanced Payment Program for ACOs wherein physician-owned and rural providers gain prospective access to some of the expected savings ($170 million in total) to defray initial startup and ongoing operational costs. This substantially changes the paradigm for those who are lucky enough to receive these upfront payments, as it buys down the upfront costs and CMS will not recoup these monies if the ACO does not achieve expected savings.

The concessions made by CMS are likely to mean greater participation in the regular ACO program. However, well-qualified and experienced entities are more likely to take part in the separate Pioneer ACO demonstration project, which offers shared savings of 75 percent compared to 50 percent to 60 percent through the regular program. Still others may decide that the ACO gamble is too great and elect to stay with Medicare Advantage, particularly in areas where rates remain robust. Despite heavy regulations, rewards in Medicare Advantage are likely greater, and applications for insurance licenses may allow competition with health plans in Medicare and commercial Exchanges.

Technology Remains the Lynchpin
One thing that has not changed under the final rules is the critical role technology will play in establishing and operating a successful ACO. In particular, ACOs will need a way to easily, affordably and efficiently collect, share and manage significant volumes of data from multiple disparate sources.

A major component of the ACO initiative requires the sharing of information across a patient’s continuum of care. As such, the ability to link providers and other stakeholders to comprehensive patient data in real-time will be critical. Some considerations include:

1. The ability to receive enrollment, eligibility and demographic data on assigned beneficiaries, as well as claims data, ensuring access to a comprehensive clinical history for each patient
2. Predictive modeling and stratification tools to identify high-risk or multiple co-morbid cases in need of intervention
3. Tools to identify HEDIS and other care gaps
4. Proactive identification of those in need of preventive care and chronic care management
5. Tools that streamline comprehensive case and disease management, including assessments, care plan creation, and monitoring and fulfilling care plan tasks and interventions
6. Comprehensive medication reconciliation and drug monitoring capabilities
7. Integration with existing provider and member portals

For organizations seeking a clearer picture of the requirements for technology and integration in an ACO, the National Committee for Quality Assurance (NCQA) has set up a multi-tiered certification process for ACOs. Available on the NCQA website, it is in essence a resourceful roadmap for success.

The jury is still out on whether ACOs will deliver the desired changes to Medicare. Regardless, the movement to improve quality and cost efficiencies will remain at the forefront of healthcare reform. As such, going forward, healthcare organizations will need to consider investments in infrastructures that support health information exchange and coordination of care.

Anil Kottoor is CEO of health IT vendor MedHOK Healthcare Solutions. Kottoor also heads the firm's healthcare policy practice.
 

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Commentary: The meaningful use of health information exchange?

HIMSS legal corner: Why HIE is indispensable to ACO success

Q&A: The deep, wide gulf between ACO regs and reality

The HIT of ACOs -- Part 1: Data analytics, and Part 2: Beyond health information exchange

Q&A: On ACOs and the 'cartelization' of healthcare

Steve O'Keefe's My Cup of IT: ACOs: Doctors differ, patients die

Feature: The 5 roadblocks HIEs face

Q&A: On the trials and tribulations of unlocking patient data