OPERATIONS OF ACOS – PART 1 JUNE 2, 2011

OPERATIONS OF ACOS – PART 1JUNE 2, 2011

Speakers • Christopher E. Ezold Esq, The Ezold Law Firm (Bala Cynwyd, PA) • Todd I. Freeman, Larkin Hoffman (Minneapolis, MN) • Adam J. Tutaj, Esq., Meissner Tierney Fisher & Nichols S.C. (Milwaukee, WI)

PresentationOverview • Administration • Quality measures • Quantity measures • Q&A

Administration Section Overview • Information Sharing • Beneficiaries • Privacy

Information Sharing • Preface – the beneficiary pool is a moving target: • each ACO will have a beneficiary population assigned to it, which beneficiaries may move in and out of the pool; • A beneficiary may obtain care outside the ACO; and • Beneficiaries are assigned retroactively by CMS for the purposes of its calculations regarding shared savings payable to the ACO • An ACO will not know for certain if a particular beneficiary is included in CMS’ calculations

The Information Problem • ACO’s must be accountable for the quality, cost and overall care of Medicare beneficiaries assigned to the ACO. • Each ACO requires access to information necessary to monitor and evaluate the quality, cost and overall care provided. • This information is necessary for an ACO to ensure it will meet the stringent requirements of the proposed regulations.

Two Issues • How will an ACO monitor care of its beneficiary pool to ensure it meets the requirements of the regulations, including 63 quality measures, and • How will an ACO monitor care of individual beneficiaries to ensure care is appropriate?

Issue One – Data to Evaluate Compliance with ACO Requirements • In order to assist ACOs, CMS envisions providing: • aggregate level data on the entire potential beneficiary pool of the pool’s use of health services, and • beneficiary specific data. • The data provided by CMS would be combined by the ACO with its own data to allow it to evaluate how health services are being utilized, where coordination needs to be increased, how the incidence of utilization compares to the ACO’s required benchmarks and national averages and trends, etc.

Issue One – Data to Evaluate Compliance with ACO Requirements • CMS envisions providing financial data as well, including: • Number of patients seen and/or assigned, • per capita expenditures, • risk score, • total assigned beneficiary expenditures, • savings amounts and annual performance payment numbers • quality performance scores and benchmarks • aggregate metrics on the assigned population including risk, incidences of hospitalization, chronic disease subpopulations, etc.; and • ER visits, doctor visits, discharges etc.

Issue One – Data to Evaluate Compliance with ACO Requirements • CMS envisions providing this data early on in the process as well as annually. • Initial Provision of Data: • At the start of the first performance year, CMS proposes to disclose the name, DOB, gender and HIC number of the beneficiaries in the historically assigned population. CMS envisions that the ACO will use this information to determine whether specific individuals would have benefited from greater efficiencies (i.e. did a missed appointment result in an ER visit?).

Issue One – Data to Evaluate Compliance with ACO Requirements • As beneficiaries are assigned retrospectively, CMS is concerned that this information could be used to eliminate high-risk beneficiaries from care. CMS will continue to look at this issue, and ACO’s should be aware of this as a prohibited use of data.

Issue Two: Use of Data To Provide Care for Individual Beneficiaries • Compliance with federal coordination of care requirements, includes: • the establishment and use of health information technology (HIT), • electronic health records (EHR), and • an electronic health information exchange (HIE) • ACOs that are comprised of multiple providers will need the HIE to allow their EHR systems to communicate with each other • Compliance also may require the use of remote monitoring of patients, telehealth and predictive modeling, according to the proposal.

Issue Two: Use of Data To Provide Care for Individual Beneficiaries • The proposed regulations require that 50 percent of primary care providers in an ACO be ‘meaningful users’ of electronic health records by year two of the program. • The HIT requirements are significant, and require a very high level of integration of data entry and accessibility. • EHR systems with this capability have been estimated to be 4-5 years away from readiness. • HIE systems cannot be designed until the EHR systems are designed.

Issue Two: Use of Data To Provide Care for Individual Beneficiaries • PROBLEM: Patient Identity Integrity; has implications for efficiency, access to medical records and ability to get paid. • CMS may provide personally identifiable information • CMS will not provide ‘real time’ information (i.e. when a patient is admitted, etc.) • This MIGHT be achievable through local/regional information sharing programs outside of CMS involvement. • It MIGHT be available on a monthly or quarterly basis.

Issue Two: Use of Data To Provide Care for Individual Beneficiaries • Information regarding beneficiary use of substance abuse programs would NOT be provided. • ACOs would have to explain how it intends to use the data • Data would be provided ONLY for beneficiaries that • Have visited a PCP during the performance year, and • Not opted out. • Medicare Part A, B and D data would be provided • ACOs would have to sign a Data Usage Agreement (DUA) with CMS, which would be a REQUIREMENT to participation in the Shared Savings Program.

NOTICE TO BENEFICIARIES • Two notice issues: • Beneficiaries MUST be given notice that: • a beneficiary may be assigned to an ACO, and • a beneficiary’s PHI may be disclosed by CMS to the ACO, and by and between ACO providers.

Practical limitations • A beneficiary is only assigned retrospectively to an ACO, so it will be impossible to provide accurate notice beforehand. • ACO providers will be required to post signs in their offices and make CMS-approved literature to all patients. • This literature would advise beneficiaries that they may be assigned to an ACO, and that their PHI may be shared.

Notice to beneficiaries • PROBLEM: The literature may be confusing to some beneficiaries, and staff may not be able to accurately convey necessary information. • SUGGESTION: Guidelines on what staff should and can say to beneficiaries will have to be created to avoid confusion and potential violation of CMS requirements.

Beneficiary opt-out • CMS is proposing to require ACOs to notify beneficiaries on their first visit to a provider that the ACO will be able to obtain claims data if the beneficiary does not object. • if the beneficiary opts out, an email address or telephone number could be provided to them to use to opt out. • ACOs would also have to notify beneficiaries if they are no longer participating in the Shared Savings Program or are no longer ACOs.

Beneficiary opt-out • Although the opt-out applies to the data sharing portion of the ACO program, it does not affect the patient’s assignment to the ACO or the use of the patient’s data for purposes such as: • calculating ACO benchmarks, • per capita costs, • quality performance or • performance year per capita expenditures.

Beneficiary opt-out • Unfortunately, if a significant number of patients opt-out, the ACO may find itself in a dilemma in fully evaluating the care received by its beneficiaries, but will nevertheless still be held accountable for that care. • This requirement exists despite CMS’ acknowledgement that legal authority under privacy regulations exists allowing ACO’s and their member organizations to share this data • CMS has proposed the opt-out model in the spirit of keeping the patient informed.

Beneficiary opt-out • As opting out might interfere with information sharing and an ACO’s ability to accurately track costs and services, there have been requests to CMS to allow ACO’s to exclude these patients from services, or to exclude them from calculations determining whether the ACO will receive shared savings.

PRIVACY RULES • Depending on its business structure, an ACO either will be part of a covered entity or will be a business associate of the participating covered entities. In either case, • the proposed regulations depend heavily on the ability of these entities to exchange PHI for certain healthcare operation purposes.

Aggregated data on beneficiary use of healthcare services • Identification of Historically Assigned Beneficiaries – Data which includes: • Name, • date of birth, • gender and • Medicare ID for historically ACO-assigned patients.

Sharing Beneficiary-Identifiable Medicare Parts A, B, and D Claims Data • For Medicare Parts A and B, the data elements that will be provided are: • procedure code, • diagnosis code, • beneficiary ID, • date of birth, • gender, • if applicable, date of death, • claim ID, • from and thru dates of service, provider or supplier ID, and • the claim payment type.

Sharing Beneficiary-Identifiable Medicare Parts A, B, and D Claims Data • The Medicare Part D data includes: • beneficiary ID, • prescriber ID, • drug service date, • drug product service ID, • and indication if the drug is on the formulary.

Protected Health Information • All of this information is protected health information (PHI) under the Health Insurance Portability and Accountability Act and its regulations (HIPAA). • In any ACO that is comprised of an association of providers, contracts between all providers will have to exist that require compliance with HIPAA standards.

CMS’ Position on Disclosure of PHI in the ACO Structure CMS takes the position that disclosure of the aggregate and individual beneficiary information is allowable under HIPAA as it is for ‘health care operations’ purposes. • ACOs would have to be careful that their use of the information was not for ‘marketing’ purposes • i.e. identifying beneficiaries that need procedures and then reaching out to them • use of PHI for marketing would require a release from each beneficiary involved

Comment • The Proposed Regulations emphasize the need to comport with privacy rules by stating that ACO agreements may be terminated for improper use or disclosure of the shared claims information. • CMS has requested comment on the implications of sharing protected health information, such as Parts A, B and D claims data, with ACOs and the use of an opt-out, versus an opt-in, approach to patient consent and individual choice.

PUBLIC REPORTING • PPACA has several new public reporting requirements that are intended to increase ‘transparancy.’ • Section 3003 makes aggregate information on physician resource use publicly available; • Section 3004 makes quality data relating to long-term care hospitals, inpatient rehabilitation facilities and hospices publicly available; • Section 3005 makes quality date for certain cancer hospitals publicly available;

PUBLIC REPORTING • Section 10331 requires the development of a Physician Compare website with information on physicians enrolled in Medicare and/or enrolled in the Physician Quality Reporting Initiative. • By January 1, 2013, information on quality and patient experience measures will be publicly available; • Section 10332 makes certain standardized claims data under Medicare Parts A, B and D available to entities qualified by the Secretary of DHS to evaluate quality efficiency, effectiveness and resource use.

CMS Proposes to Go Beyond PPACA’s Reporting Requirements • Although the law (PPACA) does not require that data regarding operations and performance of an ACO be made public, CMS has decided that it is “desirable”

CMS Proposes to Go Beyond PPACA’s Reporting Requirements CMS has proposed to make the following ACO business information publicly available: • ACO name/location; • ACO primary contact; • ACO organizational information, including: • ACO participant organizations • Identification of ACO participants in joint ventures between ACO professionals and hospitals; • Identification of the ACO participant representatives on the ACO governing body; and • Associated committees and committee leadership

CMS Proposes to Go Beyond PPACA’s Reporting Requirements CMS has proposed to make the following ACO Shared Savings information publicly available: • Payments from the Shared Savings program received by the ACO; • Losses payable by the ACO to the Shared Savings program; • Total proportion of shared savings invested in infrastructure, care processes and other resources; and • Total amounts of shared savings paid to ACO participants

Comment • CMS wants comment on requiring the public disclosure of Quality Performance standard scores, relating to the ACO’s accountability for: • Quality; • Cost; • Overall care furnished to the beneficiary population.

Quality and Other Reporting Requirements Section Overview • Proposed Measures to Assess Quality • Requirements for Quality Measures • Quality Performance Standards • Incorporation of Other Reporting Requirements • Public Reporting • Aligning ACO Quality Measures

Proposed Measures to Assess Quality • Proposed Measures to Assess the Quality of Care Furnished by an ACO – New Measures after 2012 • First Year – Reporting Only • Considerations in Selecting Measures • Use of Measures • Scoring Methodology

Proposed Measures to Assess Quality 3. Proposed Quality Measures that ACOs Must Meet for Shared Savings – 65 Measures over 5 Domains • Patient/Caregiver Experience – 7 measures • Care Coordination – 16 measures • Patient Safety – 2 measures • Preventative Health – 9 measures • At-Risk Population/Frail Elderly Health – 31 measures

Requirements for Quality Measures • Requirements for Quality Measures Data Submission by ACOs • GPRO Tool • Certified EHR Technology

Quality Performance Standards Performance Scoring • Measure Domains and Measures Included in the Domains • Methodology for Calculating a Performance Score for each Measure within a Domain See next slide for Performance Level and Points

Quality Performance Standards Performance Scoring Performance LevelPoints >90-100% 2 >80-90% 1.85 >70-80% 1.7 >60-70% 1.55 >50-60% 1.4 >40-50% 1.25 >30-40% 1.1 <30% 0

Quality Performance Standards Performance Scoring 3. Methodology for Calculating a Performance Score for each Domain 4. The Quality Performance Standard Level

Incorporation of Other Reporting • Incorporation of Other Reporting Requirements Related to the Physician Quality Reporting System and Electronic Health Records Technology

Public Reporting

Aligning ACO Quality Measures with other Laws and Regulations

Quantity Measures Section Overview • Expenditure Benchmark • Minimum Savings Rate • Net Savings Threshold (for certain one-sided ACOs only) • Shared Savings Rate • Performance Payment Limit • Shared Savings Withhold • Minimum Loss Rate • Loss Rate • Loss Recoupment Limit

Expenditure Benchmark • In order to determine whether an ACO is generating savings to share – or losses to be recouped – CMS must first establish a per-capita expenditure benchmark. • The explanatory text of the proposed MSSP regulations observe that the benchmark is effectively “a surrogate measure of what the Medicare FFS Parts A and B expenditures would otherwise have been in the absence of the ACO.”

Expenditure Benchmark • CMS will compute the per-capita expenditures for an ACO based on the per capita Parts A and B fee-for-service expenditures for beneficiaries that would have been assigned to the ACO in each of the preceding three years. • To minimize variation from catastrophically large claims, CMS truncates an assigned beneficiary’s total fee-for-service per capita expenditures at the 99th percentile (as determined for each benchmark year).

Expenditure Benchmark • CMS computes a 3-year risk and growth-trend adjusted per capita expenditure amount for the patient populations in each of the 3 benchmark years with reference to growth and health status indices. The resulting benchmark is the “risk adjusted per capita expenditures for beneficiaries historically assigned to the ACO in each of the 3 years used to establish the benchmark.” • CMS updates this fixed benchmark by the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare fee-for-service program using data from CMS’s Office of the Actuary.

Minimum Savings Rate In order for an ACO to receive a shared savings payment, its actual expenditures must be lower than the benchmark amount by more than a certain percentage – the “minimum savings rate” (“MSR”). The MSR is intended to account for normal variations in expenditures.

OPERATIONS OF ACOS – PART 1 JUNE 2, 2011