Health Care, Education and Research www.billingsclinic.com

Accountable Care Organizations: Perspectives

from the Billings Clinic Experience

Montana HealthCare ForumNovember 28, 2012

Helena

F. Douglas Carr, MD, MMMMedical Director, Education & System Initiatives

Physician Group Practice Demonstration 2005-2010

The Alpha Medicare ACO

•Types of organizations:•2 MSGP•2 AMC•5 IDS•1 PHOTesting the concept that

physician group practices can better coordinate care (Part

A&B) than other delivery models to reduce rate of growth in per-

capita expenditures while improving quality

•Rate of growth of PGP compared to same county comparison

•Individually risk adjusted (HCC)•Attribution by plurality of office visits, All-Specialty•Retrospective, blinded to both organization and

beneficiary, changes yearly•Minimum Savings Threshold: 2%, Cap: 5% •Sharing is 80% only on savings >threshold but < cap•Data feedback intended on quarterly basis•32 Quality measures (outpatient only, process + outcomes)

create a gate for 50% of shared savings payment

Shared Savings Model:

FFS continues CMS shares % of calculated savings

Everett, WA – Everett Clinic

Marshfield, WI – Marshfield

Clinic

Springfield, MO – St Johns

Danville, PA-Geisinger

Billings, MT-Billings Clinic

St. Louis Park, MN – Park

Nicollet

Winston-Salem, NC-Novant-Forsyth

Physician Group Practices

Integrated Delivery SystemsAcademic Medical Center

Ann Arbor, MI - University of Michigan

Bedford, NH-Dartmouth Hitchcock

10 Organizations

Physician-Hospital OrganizationMiddletown, CT – Integrated Resources

for Middlesex Area (IRMA)

Common Basis for Strategies among the PGP Groups

1. Focus: High Cost AreasComponents of Medicare

Expenditures For Billings Clinic (base year

2004)

• Inpatient40%

• Hospital OP24%

• Part B 22%• SNF

7%• Home Health 3%• DME 4%

Reduce avoidable admissions, ER visits, etc.

2. Focus: Chronic Care & Prevention

• High prevalence and high cost conditions • Provider based chronic care management • Care transitions• Palliative care

Financial Savings are INPATIENT driven.

Quality Measures are OUTPATIENT driven.

Diabetes Heart Failure

Coronary Artery Disease HTN, Screening, PreventionBillings Clinic PGP Year 5

5

“A detailed analysis of the demonstration is currently available only for the first two years. That analysis showed that, for patients in the 10 group practices during the 2nd year, average Medicare spending excluding the bonuses paid to physician groups was about 1 percent below projections…similar estimates are not yet available for other years…”

PY1 PY2 PY3 PY4 PY5 Average Annual 5 year Expenditures

1.21% 2.00% 2.56% 3.63% 2.37% 2.39%

5 Year Savings $218,573,184 $9,161,179,345

Summary Results

How The PGP (2005-2010) Influenced the Development of ACOs

Accountable Care Act-2010: ACO provisions include • Primary Care Attribution• National comparison

targets• Target is absolute

spending increase over base

• Retains risk adjustment

Transition Demo (2011-12)• Incorporated

changes in ACA provisions

• Improved data reporting from CMS

• Quality Measures 3245

• Discussions/development led to first ACO proposals that ignored some PGP recs

• The national consensus supported the PGP groups recommendations

Final ACO Regs• Quality Measures

6533• Eliminate 25%

withhold• First Dollar sharing

after minimum savings threshold

• Allows for 1 or 2-sided risk

• Preliminary prospective assignment

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  PGP TD ACO Pioneer

Attribution retrospectiveAll Specialty

retrospective Primary Care

retrospective Primary Care

retrospective Primary Care

Base Prior Year (2004)3 -year wt. Averaging

3-year wt. Averaging

3-year wt. Averaging

Term (before re-basing) 3-->5 years 2 3 3

ComparisonLocal Rate of growth

National Absolute amount

National Absolute amount

National 50% amount +

50% rate growth

Threshold (MSR) 2% 1.47%-4.65%

2-3.9% or2% 1%

Savings 80%

above MSR50%

first dollar

50% above MSR or 60% first

dollar50%

first dollar

Quality Gate 50% 80%, 90% 100% 100%

Quality Measures 32 45 33 33

Loss Risk No NoNo (1 sided)Yes (2 sided) Yes

Risk Adjustment

retrospective updated yearly

prospective adjusted yearly

prospective fixed for term

prospective fixed for term

Comparison of Shared Savings Models

Growth and Dispersion of Accountable Care Organizations November 2011

ACOs BY SPONSORING ENTITY

“The range of entities that have sponsored ACOs, from small IPAs to national insurance companies indicates the wide range of business models that will ultimately provide accountable care.”

• Medicare SSP has lead to commercial adoption of ACOs

• Market specific clustering of activity• Basic tenets of accountable care

previously existed; title is new

“It appears, for now, that defining oneself as an ACO represents an acceptance of the direction the industry has been headed rather than an adoption of a truly new form of care delivery.”

Growth and Dispersion of ACOs November 2012

Sponsorship Type

IDSMuliple ProvidersHealth PlanSingle Provider

133

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151

PaymentShared Savings, 1 sidedOtherSS-2Sided, FFS, Cap, DRG

53%

30

SS-2 sidedFFSCapitationEpisode/DRG

36%34%

30%

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Projected Spending

Target Spending

Shared SavingsActual Spending

ACO Launched

Many ACOs are reimbursed on a Shared Savings model based on Spending Targets

15

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Movement Towards ACO Raises Key Questions

• What is the COST impact of delivering accountable care?

• What is the REVENUE impact of delivering accountable care?

• What is the COST impact of building an ACO?

• How do you manage the hospital and physician relationship through transition to an ACO?

• How do you manage two parallel entities through the transition?

• How do you manage the pace of that transition?

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0 n0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Transition

Time

Current FFS System

AccountableCare Organization

16

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ACO Core Components

People Centered Foundatio

n

Health Home

High Value Network

Population Health Data Manageme

nt

ACO Leadershi

p

Payer Partnershi

psFoundational Philosophy: Triple Aim™

The Bridge from FFS to Accountable Care

What are the underpinning

building blocks?

CurrentFFS

System

AccountableCare

Measurement

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The ACO Model

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A group of providers willing and capable of accepting accountability for the total cost and quality of care for a defined population.

Payer Partners Insurers Employers States CMS

Core Components:• People Centered

Foundation• Health Home• High-Value Network• Population Health Data

Mgmt• ACO Leadership• Payor Partnerships

Why PCMH within ACO?• Emphasizes prevention• Encourages cognition/relationship over

technology• Less variation in utilization • Allows for most efficient delivery methods: allied

professionals, phone, e-mail, web-enabled• Proven concept in other modern nations, staff-

model HMOs• Access closest to patients• Promotes shared decision making• Leverage point for post-hospital care

Montana Patient Centered Medical Home Initiative

10-2009 • MT Medicaid received planning grant from NASHP

to develop PCMH model; stakeholder discussion developed into planning for a multi-payer model

10-2010 • Commissioner of Securities and Insurance

assumed role of facilitating discussions among MT payers and providers

5-2011 • Working group adopts NCQA Recognition as a

definition standard of PCMH for Montana

9-2011 • Creation of PCMH Advisory Council sponsored by

office of Insurance Commisioner

2012

• Adopted Framework for Payment as guideline for contract development

• Created Uniform Quality Measure Set • Recommended the attributes of a state

technology reporting platform; verified that designated HIE (Health Share Montana) meets them

• Developed proposed legislation to create commission with statutory authority to develop the market rules that encourages multi-payer PCMH

www.csi.mt.gov/medicalhomes

BCBSMT PCMH Program• Begun in 2009 with Western Montana Clinic (St.

Patrick Hospital) and Billings Clinic.• Added St. Patrick’s, CMC, Kalispell, Bozeman, and St.

Vincent’s 2010-2011. Added Northern Montana Hospital and South Hills Medical Group in 2012.

• Planning to add St. Peters, Benefis, Holy Rosary. • Limited to PCP providers with access to EMR.• 2009/2010: Chronic disease only.• 2011 and beyond: Chronic disease and preventative

care.

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PCMH-Physician Groups (*=active)

Physician Group Number of Physicians

Billings Clinic* 77 MD (16 IM, 25 FP, 18 Peds, 18 OB), 23 Midlevel

Western Montana Clinic* 31 MD (8 IM, 14 FP, 5 Peds, 4 OB), 7 Midlevel

St. Patrick’s Hospital* 15 MD (6 IM, 9 FP), 5 Midlevel

Benefis 14 MD (7 IM, 3 FP, 4 OB), 5 Midlevel

St. Peters Hospital 14 MD (2 IM, 12 FP)

Kalispell Regional MC* 20 MD (3 IM, 6 IM-Peds, 11 FP), 11 Midlevel

Comm. Medical Center* 20 MD (5 IM, 11 FP, 4 Peds), 7 Midlevel

Bozeman Deaconess* 26 MD (9 IM, 6 FP, 6 Peds, 5 OB), 7 Midlevel

Northern Montana Hosp* 10 MD (3 IM, 5 FP, 2 OB)

St. Vincents* 9 MD (7 IM, 2 FP)

Holy Rosary Healthcare 4 MD (1 IM, 1 FP, 2 OB)

South Hills Med. Group* 2 MD (1 NP)

Total Phys./Midlevels 242 MD (67 IM, 99 FP, 6 IM-Peds, 33 Peds, 35 OB), 66 Midlevel.22

2012 BCBSMT PCMH Program

Chronic Diseases

AsthmaIschemic Vascular Disease

Depression Diabetes

Preventative Care

Preventative exam

Smoking status

BMI

BP

Breast cancer screening

Cervical cancer screening

Colon cancer screening

Immunizations

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BCBSMT-PCMH Early Trends

PCMH

~ 16,000 Lives

Total Trend: 3.1%

Stop-loss, excess risk adjusted Trend: 2.6%

Improved documentation and reporting on quality

measures

All other PCPs

~36,000 lives

Total Trend 7.1%

Stop-loss, excess risk adjusted Trend: 7.2%

Status quo

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Blues CMO says there's 'no question' medical-home model works 11:30 am, Oct. 23 Tags: Coordinated CareMedical HomesInformation TechnologyPatient Care

Without hesitation, Dr. Allan Korn, the Blue Cross and Blue Shield Association's chief medical officer and senior vice president for clinical affairs, declared that the patient-centered medical home has the potential to transform the U.S. healthcare system.

"The things you want going up are going up, and the things you want going down are going down," said Korn in an interview following his appearance Monday on a panel assessing the state of the healthcare industry presented in San Antonio at the MGMA-ACMPE's annual. "There's no question that the medical home is working, and that's what's gratifying to me."

While speaking on the panel, Korn said he thinks steps could be taken to improve the patient-centeredness of the medical-home practice model. Still, he said later, medical homes—which use information technology to coordinate care and track the treatment of patients who have chronic diseases—have led to double-digit declines in patients' exposure to radiation from diagnostic tests, in "ambulatory-sensitive" hospital admissions, and in unnecessary and costly healthcare episodes.

They have also boosted physician satisfaction.

"When you permit a physician to perform at his or her highest level, to do what they want to do, these are things that happen," Korn said, adding that one important thing the Blues' medica- home programs have done is remove the "mother may I’s” from the practice of medicine. "We're having doctors tell us 'I'm looking forward to going to the office again.' "

He added that, with some 5.3 million members covered by Blues medical homes, "we're not piloting anymore."

PCMH Perspectives

ProviderTeam Model best able to • Improve access• Ensure EBM care• Re-energize

profession

Requires Investment & Change• IT• FTEs• Financial risk

(reimbursement for non-RVU work, critical mass of pts.)

“Rules of the Road” will help• PCMH standards• Framework for

payment• Quality

metrics/reporting

Payer

Financial risk/commitment with need for eventual

ROI

Assurances that a practice is transforming • Standard

s• Quality

reporting

Improved Access

Increased satisfactio

n

Better outcomes • Prevention• EB Care

Patients

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Questions?