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Rural Accountable Care:
Here to There
National Rural Health Association
2013 Annual Meeting
Martie Ross, Principal
Pershing Yoakley & Associates, PC

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• 250-approved MSSP ACOs
– 4 million attributed Medicare beneficiaries
– 10 percent include rural component
– 2014 application process now under way
• Around 200 commercial ACOs – and growing
– Negligible rural activity
• Slightly more physician-led ACOs
Environmental Scan

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Elliott Fisher’s 2006 MedPAC presentation
• Higher spending regions experience lower quality and
satisfaction
• Differences in spending = supply sensitive services
• “No one is accountable for local capacity and political
culture.”
• Create 5,000 extended hospital medical staffs accountable
for care for defined population
– Payment adjustments based on performance measurements

5. Role of Community Hospital
Today
Today
Pillar of the
community
Ensure essential
emergent and acute
care
services, subsidize
with profitable
outpatient services
Physician
recruitment
and retention
Maximize
availability of
health care
services in the
community

6. Role of Community Hospital
Tomorrow
Today
Responsibility for
entire care
continuum,
regardless of where
and by whom care
is delivered
Future payment tied
to assuming
responsibility for
covered lives
Population
Health
Management

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Transitional model
TODAY: Volume-based reimbursement
→ Accountable care
TOMORROW: Value-based reimbursement
Accountable Care Economics

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• Begin shifting risk from payer to provider
• ACO is risk management vehicle
• ACO risk = total FFS payments – benchmark
– Held accountable for quality of care by performance standards
• HMO risk = provider cost – capitated payment
Accountable Care Economics

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• Actual total FFS payments
– Payer’s actual total payments for specified services
provided to identified patient population during defined
time period
– All providers, not just ACO participants
• Benchmark
– Predetermined target spend for exact same services,
population, and time period
– Typically based on historical data
Accountable Care Economics

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• Performance standards
– Predetermined broad-ranging quality measures
– Overall patient care – not limited to ACO participants
– Payment and continued participation tied to overall ACO
performance
Accountable Care Economics

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One-Sided vs. Two-Sided
• One-Sided - If actual costs exceed
benchmark, ACO not liable for difference
• Two Sided - If actual costs exceed
benchmark, ACO liable for difference
– Eligible for greater share of savings
• Window of opportunity on One-Sided model is
closing rapidly

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Shared Savings Programs
Key Contract Terms
• Identify parties to contract
• Define population/attribution
• Calculate total-cost-of-care benchmark
• List quality metrics
• Set out minimum performance standards
• Specify savings percentage

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Shared Savings Program
Performance
• Providers continue to bill fee-for-service
• Track performance on quality metrics
• Calculate payer’s actual total cost of care
• Actual – benchmark = savings
• Payer pays ACO percentage of savings
• ACO distributes pool to participants
• Adjust benchmark, start over

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• 250 participating ACOs
• Three-year contracts
– Each year = performance year
– One-sided available first contract term only
• Next start date is January 1, 2014
– NOI due May 31
– Application due July 31
Medicare Shared Savings Program

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MSSP ACO Formation
• Legal entity
• Governing body
– 75 percent ACO participants
– 1 independent Medicare beneficiary
– Fiduciary duty (not responsible for governing
activities of individuals or entities outside the ACO)
• Management
– Board-appointed manager
– CMO, QA-QI professional, compliance officer
– Audit and record retention requirements

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MSSP Attribution
Primary Care Services
• E&M Services
– 99201-15; 99304-99318;
99324-99340; 99341-
99350
• Wellness Visits
– G0402, G0438, G0439
• RHC/FQHC Services
– 0521, 0522, 0524, 0525
Primary Care Physicians
• Family Practice
• General Practice
• Internal Medicine
• Geriatric Medicine

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MSSP Attribution – Step 1
• Identify beneficiaries who received a PC service from
ACO’s PCPs in last 12 months
• Attribute beneficiary to the ACO only if:
Total allowed charges
for PC services billed by
ACO’s PCPs in last 12
months
>
Total allowed charges
for PC services billed by
PCPs in any other ACO
or non-ACO TIN in last
12 months

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MSSP Attribution – Step 2
• Identify non-Step 1 beneficiaries who received a PC service from
an ACO specialist physician within last 12 months
• Attribute beneficiary to ACO only if:
Total allowed charges for
PC services billed by all
ACO physicians and mid-
levels in last 12 months
>
Total allowed charges for
PC services billed by PCPs
in any other ACO or non-
ACO TIN in last 12 months

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Beneficiary Eligibility
During the last 12 months, beneficiary has:
• At least one month of Part A and Part B enrollment
• No months of:
– Part A enrollment only
– Part B enrollment only
– Medicare Advantage enrollment
– Group health plan enrollment
– Non-US residence
• Received at least one PC service billed by ACO physician
• Not been included in other shared savings initiatives

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– Shared savings in a cost-reimbursed/fixed cost
financial model
– Complexity of attribution model
– Upfront investment, impossible to calculate ROI
– Technical assistance
Does the Model Work for Rural?

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• What do we really want to achieve?
• Criteria
– Support rural physicians in adopting evidence-based medicine
– Provide outpatient care coordination
– Seamless transfers between levels of care
– Right size services (volume vs. fixed costs)
• Option: Rural clinically integrated network, or RCIN
What Model Would Work?

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Rural Clinically Integrated
Network - RCIN
•Providers accountable to
each other and to the
community to deliver high-
quality care in efficient
manner
-Collectively define and
enforce standards of care
-Coordinate patient care

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• Per se illegal for independent market participants
to negotiate jointly on price-related terms
• Three options
– Messenger model
– Economic integration
– Clinical integration
Antitrust Basics

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• Independent provider organization cannot
exercise market power in anti-competitive
manner
– Market power = immune from competition
– Presume market power from market share
– Overcome presumption by demonstrating pro-
competitive effects
Antitrust Basics

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• FTC guidance
– Statements of Health Care Antitrust Enforcement
Policy - Physician Network Joint Venture
– Advisory opinions (Norman, OK)
– MSSP safe harbors
• Bottom line: Does organization maintain high
degree of interdependence and cooperation to
control costs and ensure quality?
Clinical Integration

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Clinical Integration
• Providers accountable to each other and to
community to deliver high-quality care in
efficient manner
– Collectively define and enforce standards of care
– Coordinate patient care

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Clinically Integrated Network
• Lean infrastructure to support provider
accountability
• Vehicle for independent providers to
centralize certain functions and operations
– Access to patients
– Access to payment
– Access to actionable information

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Participation Agreement
• Individual providers join a CIN by signing a
participation agreement
• Terms of agreement established by CIN
governing body
– Parties’ respective rights and responsibilities
– Demonstrates CIN legitimacy to payers
• Breach = remedial action, termination

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CIN Functions
• Core functions
– Promote evidence-based medicine
– Facilitate care coordination
– Negotiate and manage payer contracts
• Additional support services

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Promote Evidence-Based Medicine
• EBM = integrating individual clinical expertise
with the best available external clinical evidence
from systematic research
• Clinical protocols
– Identify (prioritize)
– Implement (education, technology solutions)
– Monitor (reporting on quality measures)
– Remediation, punitive measures

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Facilitate Care Coordination
• Identify high-risk, high-cost patients
– Disease registries
– Data analytics (claims data)
• Aggressive interventions
– Patient navigator
– Remote monitoring
– Transitional care management
– Health information exchange

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• “Regionalization” of programs
• Tertiary care
Facilitate Care Coordination

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Manage Payer Contracting
• Standard fee schedule
• Narrow networks and tiered benefits plans
• Pay for performance (FFS enhancements)
• Shared savings programs
• Bundled payments
• Centers of Excellence
• Global budgets

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35. Competitive Collaboration
Maintain access through
appropriate resource
allocation
Maintain local decision-
making to fullest extent
possible

36. Traditional Rural Health Network
Purpose
• Administrative simplification
• Economies of scale
Examples
• Joint purchasing of products and
services
• Shared information technology
• Joint recruitment/shared
personnel
• Staff education
• Peer support for governance and
management
• Credentialing, peer
review, utilization review
• Quality/performance
improvement activities
• Access to grant funding

37. Organizational Commitment
Governance structure
- All participants have a voice
- Clear decision-making process
Sustainability
- Operating account, financial
commitment, and contributions;
financial reports
Practical matters
- Personnel; real and personal
property; limitation of liability;
indemnification; dispute resolution;
termination
Commitment

38. Operational Commitment
Quality
improvement
plan
Strategic plan Operational
plan
Education
plan
- Payment
and delivery
system
reform
- Needs and
assets
assessment
-Measures for
success
- Identify
specific
activities to be
“regionalized”
- Identify
participants (&
respective
roles)
- Task list to
achieve each
“regionalized”
activity
- Necessary and
available
resources
- Timelines

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• Educate board, management team, physicians
• Conduct brutally honest community health needs
assessment
• Identify and evaluate potential affiliations
Immediate To-Do List

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Martie Ross
mross@pyapc.com
9900 W. 109th Street, Suite 130
Overland Park, KS 66210
(913) 232-5145
Learn more about PYA at www.pyapc.com