CMS Announces 106 New Accountable Care Organizations

According to HHS Secretary Kathleen Sebelius, 106 new Accountable Care Organizations (ACOs) have been formed by doctors and health care providers. ACO’s are groups of doctors, hospitals, and other health care providers who voluntarily provide coordinated care to Medicare patients, which helps to ensure patients get the right care at the proper time and avoid duplication of services and medical errors. This process ensures high quality health care and lower expenditures for CMS and beneficiaries. The 106 new ACOs will give as many as 4 million Medicare beneficiaries access to high quality coordinated care.

The establishment of ACOs began after the passage of the Affordable Care Act (ACA) (P.L. 111-148), with more than 250 ACOs at this time. ACOs are required to meet quality standards to ensure that savings are being achieved through improved care coordination and appropriate, safe and timely medical care. There are 33 quality measures that ACOs must meet. Estimates show that over four years, ACOs could save the federal government $940 million.

According to CMS, the new ACOs cover a diverse group of physician practices all over the United States. Currently, half of all ACOs are physician-led organizations that serve less than 10,000 Medicare beneficiaries. Twenty percent of ACOs include community health centers, rural health centers and critical access hospitals that serve low-income or rural communities. Fifteen of the new ACOs are Advance Payment Model ACOs, which are designed for physician-based and rural providers. Selected participants in Advance Payment Models receive upfront and monthly payments that they can use to make investments in their care coordination infrastructure. According to CMS, the Advanced Payment Model will help entities with less access to capital participate in the program. Originally available only to entities who began participating on April 1, 2012, or July 1, 2012, in June of 2012 CMS announced it would begin accepting applications for participation for programs beginning on January 1, 2013.

From the Contributor’s Corner: When Disaster Strikes…Call Me, Maybe? Part II

Health Wolters Kluwer Law & Business will periodically feature posts from outside contributors who are members of our Advisory Board. Today’s post comes from Allan P. DeKaye, MBA, FHFMA. For Part I of this post, click here.

It would be nice to think that Superstorm Sandy was in the rearview mirror. The after effects will be felt for quite some time. It was reported that between Virginia and Maine (the path of the storm) that some 25% of cell towers were initially damaged because of electrical service interruptions. So instead of the next smartphone, how about a better way to ensure cell phone communications—maybe with solar powered devices, and satellite backups to handle emergency levels of call volumes.

Now in the aftermath, not only individuals—but state and local governments will be picking up the pieces, and trying to put all of the pieces back together again. At the federal level, the senators and representatives of New York and New Jersey are in the nation’s capitol to seek aid to rebuild and strengthen the weakened infrastructure that demonstrated just how vulnerable we are. This political theatre coming amidst the “fiscal cliff” and other nonsense doesn’t play well in communities that went to the polls when there was no power to make their voices heard despite the crises they faced. Now is the time to act responsibly.

The storm also put the health care profession to the test. In talking to some of my clients, the most pressing concerns for hospitals was maintaining power. For many facilities in low lying areas, especially near the water (as some were), there were mandatory evacuations (which started days before the storm was expected to hit). One neighbor, who is also a nursing administrator, told me that for her facility to cope with the influx of hospital transfers as well as nursing home patient transfers from those facilities in low laying regions, the National Guard sent in a medical unit to work solely with the incoming transferees.

Another client reported that many ER visits and some admissions were largely to refill prescriptions as drug stores and pharmacies may have been flooded or simply without power (or both). In some cases, patients were homeless—some temporary—as their homes became uninhabitable—some permanently—as some homes were destroyed. Others may have been injured or incapacitated as a result of the storm.

Several hospitals remained shuttered as a result of the storm, not only depriving the communities they serve with access to care, but temporarily (hopefully not permanently) furloughing workers causing a spike in unemployment. Much has already been said about the failure of Long Island’s Power Authority (LIPA) to implement preparedness recommendations after past storms, and the recent resignations of its COO, and Board chairman will do little to ensure that corrective actions will happen to prevent future mismanagement, and lack of preparedness. But the axing of a few heads will by no means assure a better outcome the next time. This is not dissimilar from a compliance audit failure of great magnitude.

After the storm, they’ll put their collective heads together to determine how best to rebuild, repair and strengthen infrastructure. At first, one New York City hospital that experienced flooded basements disrupting generators was criticized for the location of their generators. Days later, the critics acquiesced, saying that generators can’t be placed on the roof. So what’s the solution?

Hospital audit failures are met with reviews, and corrective action plans; hopefully preventing the next occurrence. Even years after Katrina, the new hardened levees were put to the test. For the most part they worked; but the diverted water flooded other areas—not as severely as before—though adequate–but not perfect.

Is perfect possible? We talk about having best practices. Maybe we need “better” practices first. We’re told there are limited resources. But we also argue that we need to work smarter, not just harder. Perhaps the lesson learned is we need to do both. They say that much of Long Island’s storm related damage came first from flooding due to storm surge; but the elongated period of time it took to restore power came from numerous downed trees hitting power lines. The conventional wisdom says “it’s too expensive to bury the wires.” However, if after two severe storms in a relatively short span each causing billions of dollars in damage, we need to rethink the wire burying option, or invest in tree trimming (which was not funded), or figure out ways to harden everything from sewage plants to electric substations (all of which sustained outages and damage).

Trains were stopped early to shelter the rolling stock. However, one of the transit authorities stored their train cars in a low-lying area—they lost quite a few railcars. Bridge and tunnel traffic was stopped. But the image of flooding tunnels will stay in the minds of many for a long time to come. Many argue that people should not live at the water’s edge; however, that didn’t stop the ocean and bay coming together and flooding and destroying many coastal communities. The resulting storm surge caused flooding in areas that were not in the flood zone maps.

There is also much in the news these days about teacher evaluations. Our elected officials should also know that they will be evaluated in the days and months to come. It won’t be a question of “did we fix it,” but did we rebuild it better so that it will last!

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Allan P. DeKaye, MBA, FHFMA, has over 40 years of experience in the healthcare field. He is President and CEO of DEKAYE Consulting, Inc., a national firm specializing in Revenue Cycle Management. Mr. DeKaye has an MBA in Healthcare Administration from Baruch College of the City University of New York. He currently serves on the editorial advisory boards of several industry publications. He is a Fellow in HFMA, and has received several of their merit awards, including its Medal of Honor.

He is the author of the well-respected text, The Patient Accounts Management Handbook. He has written many articles appearing in various industry publications. Mr. DeKaye’s Emphasis on Education(sm) programs have been attended by over 7,000 participants, and he is a frequent speaker at national, regional and local trade association conferences. DEKAYE Consulting, Inc., also maintains strategic alliances with data, decision support and technology companies.

AHA Advocates for Incentive Payments for CAH Physicians Using Billing Method 2

In a recent letter to the Acting Administrator for CMS, the American Hospital Association (AHA) strongly urged CMS to correct what it deemed the unfair exclusion of certain physicians from receiving incentive payments from the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program (AHA Letter to CMS on Physician Payments, January 9, 2013). Specifically, the affected physicians provide services in outpatient departments of critical access hospitals (CAHs) and bill for services using Method 2. Under the Method 2 billing approach, a CAH bills Medicare on behalf of the physician using Form UB-04, instead of the Form 1500. Physicians who use Method 2 are not identified by CMS to be eligible for Medicare and Medicaid incentive programs because they are designated as “hospital-based” when they are not.

The AHA had previously written CMS on December 16, 2011, about the very same issue and requested resolution since the issue was time sensitive. CMS acknowledged the first letter and attributed the problem to claims processing limitations, stating that the process for determining which physicians were hospital-based was flawed; however, CMS did not plan to resolve the issue until 2014. The AHA pointed out physicians must attest to meaningful use for 2012 by February 28, 2013, in order to complete the attestation process. If an eligible professional (EP) does not meet the attestation deadline, every year of delay will decrease the EP’s total incentive payment.

The AHA also emphasized that the flaw in CMS’ claims processing system will be very significant for the rural communities served by CAHs. AHA estimated a financial loss of $20,000 per physician, if the physician was not recognized as being eligible for incentive payments because of Method 2. AHA stated it understood CMS uses only Form 1500 claims to set the incentive payment amounts and pointed out some Method 2 physicians, who may have some claims filed on a Form 1500, may be deemed eligible but would receive a smaller incentive payment than they actually deserve. AHA requested that CMS to resolve this issue immediately.

Fiscal Cliff Legislation Could Revamp Long-Term Care

The legislation avoiding the fiscal cliff,  the American Taxpayer Relief Act of 2012 (ATRA),  included 29 provisions affecting Medicare, Medicaid or other healthcare programs.  Other than altering the physician fee schedule to avoid a massive reduction in payments to physicians, the majority of these measures extended provisions that would expire in 2012 to 2013 or  made budgetary tricks like altering Medicaid disproportionate share payments in 2021 and 2022–those payments will undoubtedly be altered before they go into effect 9 years from now, thereby having no impact at all on hospitals.  Two  sections of the ATRA 2012, however, have the potential to dramatically change how long-term care is provided in this country. Section 642 of the ATRA repealed the Community Living Assistance and Services and Support (CLASS) program  which was included in the Patient Protection and Affordable Care Act (PPACA)(P.L. 111-148), and section 643 of the ATRA establishes a Long-Term Care Commission that has some interesting powers.

LTC Commission

The Commission is to develop a plan to establish, implement, and finance a high-quality long-term care system that ensures the availability of long-term care services and supports for individuals with substantial cognitive or functional limitations. Within 6 months of the appointment of the 15 member Commission, the Commission is to make a report that includes legislative language to carry out their recommendations. That language is to be introduced in the Senate and House within 10 days of the Commission’s approval of its report.

The Commission’s report is to examine the interaction of long-term care services in Medicare, Medicaid and private insurers.  The Commission is to make recommendations to improve those systems and the availability of long-term care in general.  It is to take into account demographic changes, as well as the potential for the development of new technologies, delivery systems, or other mechanisms to deliver long-term care.

To complete its work, the Commission has been given an appropriation of  10 percent of the remaining amount of $6 billion for a program to create qualified non-profit health insurers which is also being defunded by the ATRA.  The Commission is to work with the Medicare Payment Advisory Commission (MedPAC) and other groups.  Members of the Commission are to include individuals who represent the interest of  consumers of long-term care services, older adults, individuals with cognitive or functional limitations, family caregivers, healthcare workers from long-term care providers, private insurers, employers, and representatives of state Medicaid agencies and state departments of insurance.  The Commission can hire staff and ask for studies by the General Accounting Office  and the Congressional Budget Office.

CLASS Repeal

The Commission was created as way to find an alternative to the CLASS program, which was repealed by  the ATRA of 2012.  The CLASS program was designed to help individuals receive long-term care services in their homes.  Under CLASS, people would have  paid a premium and then received a cash benefit of not less than $50 per day, with which they could purchase long-term care services.  On October 14, 2011, the HHS Secretary suspended activities implementing the CLASS program for financial reasons.  A report by HHS determined that the CLASS program was not actuarially sound, meaning that it could not raise enough revenues to pay for the benefit.

PPACA Funding

A larger problem with the repeal of the CLASS program is that when PPACA was adopted, the Congressional Budget Office (CBO) estimated that CLASS would generate significant savings to the Medicare program and additional revenue that was used in determining how much PPACA would cost or save the government.  CBO estimated that the CLASS program would result in savings of  $70.2 billion to the Medicare program over a 10 year period.  In addition, CBO estimated that CLASS would generate $83 billion in premiums  during the 2012-2021 years. All of that money and expected savings are now gone.

Costly Care

HHS reported on the need for changes in how long-term care is provided primarily because it is so expensive. In its report on the actuarial soundness of CLASS, HHS stated that the cost of nursing home care can be $70,000 to $80,000 per year and that people who obtain long-term care services in their homes spend about $1,800 a month on those services.  These expenses are not covered by Medicare and are only covered by Medicaid once a person has spent all of their money and sold a number of assets.