ACOs: Maybe Not The Next Big Thing

Ophthalmologists should retain their independence.

BY RENÉ LUTHE, SENIOR ASSOCIATE EDITOR

Ever since they were memorialized in the Affordable Care Act, accountable care organizations (ACOs) have been a hot topic. In March 2011 CMS proposed regulations to implement its Medicare Shared Savings Programs, granting ACOs the responsibility for all aspects of health care, including quality and costs for care networks no smaller than 5,000 Medicare beneficiaries. The programs went into effect last year. Have ACOs started to transform the delivery of health care in the United States? And what do they mean for ophthalmology? According to some, there may be no need to prepare for the revolution just yet.

Starting Slowly

So far, not much has happened in the formation of ACOs. Mark Kropiewnicki, JD, LL.M, principal consultant with The Health Care Group, Philadelphia, estimates only 1,000 to 3,000 ACOs exist in the United States. “ACOs are another example in health-care reform of a lot of talk and not a lot of results,” he says. Of those ACOs that are operating, most are experimental and have been organized by hospitals, he says. Ophthalmologists tend not to play a large part in them.

Neither he, nor William Rich, MD, medical director of health policy for the American Academy of Ophthalmology, expects that to change. “We’re just not a big piece of the pie for ACOs,” Dr. Rich notes, given that ophthalmologists do not generate much revenue for the hospitals that run ACOs. The less-than-energetic beginning of the ACO care model, however, may extend beyond its probable limited involvement with ophthalmology.

Theory Meets Reality?

According to some experts in health care, the success — or even survival — of ACOs is by no means a sure thing. None of the sources who spoke with Ophthalmology Management expressed great confidence that ACOs would prevail and improve health-care delivery.

Both Dr. Rich and Alice Gosfield, a Philadelphia attorney who advises physicians on structuring their practices, point out that ACOs are based on an unproven academic theory. Ms. Gosfield cites a Health Affairs article by Elliot Fisher, MD, MPH, of Dartmouth Medical School, as the genesis of the ACO movement.¹ “This article stated hospitals should be measured and held accountable for performance of the community-based physicians who never set foot in the place, for which there was no legal obligation for the hospital to get information from them and for which the physicians don’t have to give the hospitals information,” she says. “It was just completely absurd,”

Later ACOs evolved into gain-sharing models. But, Ms. Gosfield says, in the Medicare version of the ACO, “It’s not a requirement, it’s not mandatory, it’s not a pilot program. It’s just this opportunity to do gain-sharing around Medicare savings.”

While the structure for the Medicare ACO is based on the Medicare Physician Group Practice (PGP) demonstration project, Ms. Gosfield notes the organizations that participated didn’t experience promising results. “The improvement in quality, where it’s just process measures, and the amount of savings was less than 1% in five years,”

Dr. Rich agrees. “The cost to develop each site was about $2 million, just in legal and administrative costs,” he says. The upshot? No empirical evidence has shown that the ACO structure would save money, agree Dr. Rich and Ms. Gosfield. “Only in the United States could we adopt as a new payment and delivery model something that’s never been proven,” Dr. Rich adds.

So Far, So-So

How are ACOs faring in the real world thus far? Ms. Gosfield notes that when CMS announced ACO regulations, every group that took part in the PGP said it would not participate. In March, 30 of the pioneer ACOs sent a letter to the Center for Medicare and Medicaid Innovation (CMI) objecting that at least 19 of the 31 proposed quality target measures they must meet to qualify for bonus payments were unfair. Due to the flawed metrics, the pioneer organizations requested CMI wait until 2014 instead of 2013, when CMI would have another year of data to set benchmarks, before basing bonus pay on quality.

If the health-care groups which for decades had operated on the model for the reform and quality measures find fault with the metrics, Ms. Gosfield asks, how likely would groups new to the ACO paradigm succeed in reducing costs and improving quality?

Early critics warned that additional consolidation of physicians and hospitals would drive up costs, something Dr. Rich says has come true. With health-care reform in Massachusetts, he maintains, the biggest increase in spending wasn’t the result of covering the uninsured. “It was the higher prices plans had to pay as hospitals like Partner’s Health Plan bought up hospitals and more and more doctors,” he says. “They had more leverage and drove up costs.”

That Devil In the Details (Again)

Among the biggest obstacles for ACOs, Mr. Kropiewnicki points out, is that according to CMS’s final rule, patients can still go to their provider of choice. “You’re trying to control behavior, of the doctors and also the patients, and there’s no real control that will be allowed under the system,” he says. The model defies gain-sharing, care coordination and preventing the duplication of services.

Without those patient incentives, say skeptics, ACOs, physicians and hospitals cannot create success. “Can you imagine a business deal where you say, ‘OK, I’m responsible for a whole bunch of care that I can’t control,’” asks Dr. Rich. Mr. Kropiewnicki doubts the necessary controls would be implemented — they would essentially mean “rationed care,” anathema in the United States.

Additionally, the successful coordination of patient care requires interoperability among health-care IT systems, an elusive goal. “It’s a huge problem,” says Dr. Rich.

Another one, Ms. Gosfield points out, is that practices must participate in the ACO model for three years and exceed the benchmark for savings — or they get nothing. Even if practices manage to meet the benchmark, Mr. Kropiewnicki doubts they will be able to continue qualifying for bonus dollars. “After provider groups participate for three years and achieve the benchmark savings, the benchmark will be raised,” he explains. “In year four, they are not going to say, ‘ Let’s see how much you saved from year zero.’ Instead the standard will be how much you saved off year three, for example. I don’t think there’s going to be significant savings beyond that.”

Not a Game-Changer for Ophthalmology

Suppose the impetus on driving down health-care costs means that ACOs manage to survive after all and even work as advertised? ACOs will pursue physicians in disciplines that pose significant costs — primary care, cardiology and gastroenterology; not so much ophthalmology, Mr. Kropiewnicki says. A yearly visit to the ophthalmologist, he notes, isn’t costly and likely won’t involve expensive duplications of services.

“The reality is, 99.9% of ophthalmologists are still going to be independent contractors,” Dr. Rich says. Further, “If you are an ophthalmologist and you are in a community with an ACO and you both see Medicare patients — you effectively are in the ACO, even though you get paid directly by Medicare. If you have a patient who is in an ACO, your costs are assigned the ACO.” Thus far, then, no bureaucratic nightmare has appeared for the ophthalmologist.

As for ophthalmologists who join ACOs, Mr. Kropiewnicki warns that their share of any savings would be incremental. However much money the ACO saves from the amount the government gives it to take care of a population, 50% would go to the government. The physicians would divide up the remaining 50%. Ophthalmic care comprises a small portion of that.

Even so, getting involved with a well-structured ACO could be worthwhile. “Clinical integration, standardizing to the evidence base, standardizing your documentation, standardizing how you give and take referrals, standardizing how you use ancillary personnel — where these kinds of principles have been deployed, not only does quality improve, not only does value improve, it saves physicians enormous amounts of time in their day,” Ms. Gosfield says.

Potential Impact on ASCs

To be on the safe side, ophthalmologists might consider aligning themselves with a large practice or an ASC, if they haven’t already. When a hospital-based ACO begins forming, Mr. Kropiewnicki notes, it won’t likely look at every practice and solo cataract surgeon in the region; it more will simply contract with a few of the larger practices. “One-stop shopping might make sense for them,” he says.

Involvement with an ASC offers a couple of possibilities, according to Dr. Rich. Hospitals don’t want ophthalmologists to operate in their ORs or ASCs because the Medicare beneficiaries that make up the bulk of ophthalmology patients aren’t as profitable for the them. The reason hospitals have been buying up ophthalmic ASCs, explains Dr. Rich, is that they need ORs and “this is a quick way to get them without regulatory hassle.” The ophthalmologist owners, however, usually have a provision that they can continue operating at the ASC, and so can contract directly with it.

Bundling is another option in ACOs. In this model, CMS would offer one lump sum to cover the entire cost of cataract surgery: the facility fee, surgeon’s fee, IOL, preoperative drugs, etc. “CMS would pay for six months of care. If the patient has to be readmitted for another procedure, it comes out of the ACO’s pocket.’ ASC owners will be able to control the anesthesia, control the costs of the IOLs they use, make sure the surgeons involved have fewer complications so they don’t have to pay for readmissions,” Dr. Rich says. That would be a hopeful scenario for ASCs in a period when their reimbursements are declining. “They just went down 2% on April 1.”

Stay on the ACO Radar

Generally, it may be better to contract with an ACO than not, according to Mr. Kropiewnicki. Even if patients have the ability to go where they want, the primary-care doctors will direct the referrals. And their ACOs will provide guidance on that issue. He advises ophthalmologists to pay attention to opportunities and be involved.

Dr. Rich believes that for ophthalmologists to survive in an ACO environment, they need only do the things they should be doing anyway — among them sending consult letters. “Just work with other practices as you have been,” he says. OM

Reference

1. Fisher ES, Staiger DO, Bynum JPW, DJ. Creating Accountable Care Organizations: The Extended Hospital Medical Staff. Health Aff. 2007;26:44-57.