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Impact of the Supreme Court Decision
Now that the Supreme Court has upheld the constitutionality of most of the Affordable Care Act, it behooves us to take a closer look at that law’s potential impact on physicians.
Last year I wrote that most physicians would see few changes in the near term, largely because the essential changes sought by physicians – tort reform, and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.
That said, many of the law’s provisions did favor physicians in the short term. As of last year, insurers could no longer cancel policies already issued, nor could they exclude applicants who were previously uninsurable because of chronic ailments. This provision indirectly triggered the Supreme Court’s involvement, since insurers cannot afford to cover patients with existing conditions without a mandate that all individuals purchase coverage. (Without that, healthy people would have no reason to buy insurance until they got sick, the equivalent of waiting to buy fire insurance until your house was aflame.) The case before the court centered on the constitutionality of the individual mandate, which was upheld.
Other highlights of the Affordable Care Act include prohibition of lifetime coverage limits and guaranteed coverage of dependents on their parents’ policies until they are 26 years old. Early retirees do not have to risk going uninsured until they qualify for Medicare, and Medicare’s infamous "doughnut hole" is gradually closing. Small businesses now receive tax-credit incentives to insure their workers.
All of this adds up to more paying patients, with better insurance. However, as additional provisions come online this year, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.
"Physician payment reforms" will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of "accountable care organizations" to "improve quality and efficiency of care." The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.
In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to "better coordinate patient care," but arguments over how to divide the pie could, once again, have the opposite effect.
And it won’t take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. So look for more private offices to be absorbed by hospitals, which already employ almost a third of all physicians.
By 2014, states will have to set up "SHOP Exchanges" (Small Business Health Options Programs), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don’t. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.
The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless compensation increases. That is unlikely to happen without substantial reductions in the states’ woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.
If this sounds like a potential problem for private practice as we know it, it is. Then again, it’s too early for reliable predictions: The recent Supreme Court decision notwithstanding, there is a lot of potential leeway in the new law’s future specifications; and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.
Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. To respond to this column, email him at our editorial offices at sknews@elsevier.com.
Now that the Supreme Court has upheld the constitutionality of most of the Affordable Care Act, it behooves us to take a closer look at that law’s potential impact on physicians.
Last year I wrote that most physicians would see few changes in the near term, largely because the essential changes sought by physicians – tort reform, and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.
That said, many of the law’s provisions did favor physicians in the short term. As of last year, insurers could no longer cancel policies already issued, nor could they exclude applicants who were previously uninsurable because of chronic ailments. This provision indirectly triggered the Supreme Court’s involvement, since insurers cannot afford to cover patients with existing conditions without a mandate that all individuals purchase coverage. (Without that, healthy people would have no reason to buy insurance until they got sick, the equivalent of waiting to buy fire insurance until your house was aflame.) The case before the court centered on the constitutionality of the individual mandate, which was upheld.
Other highlights of the Affordable Care Act include prohibition of lifetime coverage limits and guaranteed coverage of dependents on their parents’ policies until they are 26 years old. Early retirees do not have to risk going uninsured until they qualify for Medicare, and Medicare’s infamous "doughnut hole" is gradually closing. Small businesses now receive tax-credit incentives to insure their workers.
All of this adds up to more paying patients, with better insurance. However, as additional provisions come online this year, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.
"Physician payment reforms" will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of "accountable care organizations" to "improve quality and efficiency of care." The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.
In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to "better coordinate patient care," but arguments over how to divide the pie could, once again, have the opposite effect.
And it won’t take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. So look for more private offices to be absorbed by hospitals, which already employ almost a third of all physicians.
By 2014, states will have to set up "SHOP Exchanges" (Small Business Health Options Programs), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don’t. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.
The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless compensation increases. That is unlikely to happen without substantial reductions in the states’ woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.
If this sounds like a potential problem for private practice as we know it, it is. Then again, it’s too early for reliable predictions: The recent Supreme Court decision notwithstanding, there is a lot of potential leeway in the new law’s future specifications; and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.
Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. To respond to this column, email him at our editorial offices at sknews@elsevier.com.
Now that the Supreme Court has upheld the constitutionality of most of the Affordable Care Act, it behooves us to take a closer look at that law’s potential impact on physicians.
Last year I wrote that most physicians would see few changes in the near term, largely because the essential changes sought by physicians – tort reform, and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.
That said, many of the law’s provisions did favor physicians in the short term. As of last year, insurers could no longer cancel policies already issued, nor could they exclude applicants who were previously uninsurable because of chronic ailments. This provision indirectly triggered the Supreme Court’s involvement, since insurers cannot afford to cover patients with existing conditions without a mandate that all individuals purchase coverage. (Without that, healthy people would have no reason to buy insurance until they got sick, the equivalent of waiting to buy fire insurance until your house was aflame.) The case before the court centered on the constitutionality of the individual mandate, which was upheld.
Other highlights of the Affordable Care Act include prohibition of lifetime coverage limits and guaranteed coverage of dependents on their parents’ policies until they are 26 years old. Early retirees do not have to risk going uninsured until they qualify for Medicare, and Medicare’s infamous "doughnut hole" is gradually closing. Small businesses now receive tax-credit incentives to insure their workers.
All of this adds up to more paying patients, with better insurance. However, as additional provisions come online this year, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.
"Physician payment reforms" will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of "accountable care organizations" to "improve quality and efficiency of care." The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.
In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to "better coordinate patient care," but arguments over how to divide the pie could, once again, have the opposite effect.
And it won’t take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. So look for more private offices to be absorbed by hospitals, which already employ almost a third of all physicians.
By 2014, states will have to set up "SHOP Exchanges" (Small Business Health Options Programs), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don’t. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.
The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless compensation increases. That is unlikely to happen without substantial reductions in the states’ woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.
If this sounds like a potential problem for private practice as we know it, it is. Then again, it’s too early for reliable predictions: The recent Supreme Court decision notwithstanding, there is a lot of potential leeway in the new law’s future specifications; and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.
Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. To respond to this column, email him at our editorial offices at sknews@elsevier.com.
Top Five Targets for Primary Care
Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.
Why is that the case?
ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.
Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."
• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.
• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.
• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.
• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.
• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.
These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.
Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.
Why is that the case?
ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.
Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."
• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.
• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.
• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.
• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.
• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.
These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.
Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.
Why is that the case?
ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.
Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."
• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.
• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.
• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.
• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.
• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.
These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.
Feds: 89 New ACOs Up and Running as of July 1
Another 89 accountable care organizations had opened their doors for business as of July 1, the Health and Human Services department announced July 9.
That brings the total to 154 groups that have agreed to be held accountable for improving the quality of care they provide while simultaneously reducing costs, including 32 participating in the pioneer ACO model announced in December, as well as six physician group practice transition demonstration organizations that began in early 2011.
Some 2.4 million Medicare beneficiaries in 40 states and Washington, D.C., now are cared for by an ACO, the department announced.
At least 400 more organizations have said they will apply to become an ACO when the Centers for Medicare and Medicaid Services (CMS) begins in August accepting applications for 2013, according to Jonathan Blum, principal deputy administrator for CMS and director of its Center for Medicare.
In a briefing with reporters, Mr. Blum did not directly address whether the program could be hurt by expected attempts to defund the Affordable Care Act. Instead, he said, "This is a program that is going to grow substantially over time."
ACOs are meant to be led by physicians, working in conjunction with hospitals and other providers to deliver more efficient and better-quality care. "We really see this being led by the physician community to improve patient care," Mr. Blum said.
Of the 89 new ACOs, "almost half are physician-driven organizations serving fewer than 10,000 beneficiaries, demonstrating that smaller organizations are interested in operating as ACOs," according to a CMS statement.
However, the requirement that an ACO serve at least 5,000 Medicare beneficiaries continues to be a difficult hurdle for physician groups that would otherwise like to participate, said Mr. Blum.
The ACO effort is also known as the Medicare Shared Savings Program. The organizations that agree to participate are given the opportunity to share in whatever savings are generated. CMS estimates that the government’s savings from the program could be up to $940 million over 4 years.
One of the newest ACOs is the Westmed Medical Group, a Westchester County, New York–based physician-owned and managed multispecialty group practice that was founded in 1996, and includes 225 physicians and 1,000 employees.
Dr. Simeon Schwartz, president and CEO, said that each of group’s nine sites generally offers primary care; surgical, specialty, radiology, and lab services; and urgent care.
Westmed expects to generate savings of 5%-10% over the course of the group’s 3-year contract, mostly by shifting care from the inpatient to the outpatient setting through better coordination, he said at the press briefing. He added that providing urgent care – keeping patients out of the emergency department – is another way to save money.
In a statement, HHS Secretary Kathleen Sebelius said that having better care coordination will be one of the keys to generating savings.
"We applaud every one of these doctors, hospitals, health centers, and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care," she said.
Another 89 accountable care organizations had opened their doors for business as of July 1, the Health and Human Services department announced July 9.
That brings the total to 154 groups that have agreed to be held accountable for improving the quality of care they provide while simultaneously reducing costs, including 32 participating in the pioneer ACO model announced in December, as well as six physician group practice transition demonstration organizations that began in early 2011.
Some 2.4 million Medicare beneficiaries in 40 states and Washington, D.C., now are cared for by an ACO, the department announced.
At least 400 more organizations have said they will apply to become an ACO when the Centers for Medicare and Medicaid Services (CMS) begins in August accepting applications for 2013, according to Jonathan Blum, principal deputy administrator for CMS and director of its Center for Medicare.
In a briefing with reporters, Mr. Blum did not directly address whether the program could be hurt by expected attempts to defund the Affordable Care Act. Instead, he said, "This is a program that is going to grow substantially over time."
ACOs are meant to be led by physicians, working in conjunction with hospitals and other providers to deliver more efficient and better-quality care. "We really see this being led by the physician community to improve patient care," Mr. Blum said.
Of the 89 new ACOs, "almost half are physician-driven organizations serving fewer than 10,000 beneficiaries, demonstrating that smaller organizations are interested in operating as ACOs," according to a CMS statement.
However, the requirement that an ACO serve at least 5,000 Medicare beneficiaries continues to be a difficult hurdle for physician groups that would otherwise like to participate, said Mr. Blum.
The ACO effort is also known as the Medicare Shared Savings Program. The organizations that agree to participate are given the opportunity to share in whatever savings are generated. CMS estimates that the government’s savings from the program could be up to $940 million over 4 years.
One of the newest ACOs is the Westmed Medical Group, a Westchester County, New York–based physician-owned and managed multispecialty group practice that was founded in 1996, and includes 225 physicians and 1,000 employees.
Dr. Simeon Schwartz, president and CEO, said that each of group’s nine sites generally offers primary care; surgical, specialty, radiology, and lab services; and urgent care.
Westmed expects to generate savings of 5%-10% over the course of the group’s 3-year contract, mostly by shifting care from the inpatient to the outpatient setting through better coordination, he said at the press briefing. He added that providing urgent care – keeping patients out of the emergency department – is another way to save money.
In a statement, HHS Secretary Kathleen Sebelius said that having better care coordination will be one of the keys to generating savings.
"We applaud every one of these doctors, hospitals, health centers, and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care," she said.
Another 89 accountable care organizations had opened their doors for business as of July 1, the Health and Human Services department announced July 9.
That brings the total to 154 groups that have agreed to be held accountable for improving the quality of care they provide while simultaneously reducing costs, including 32 participating in the pioneer ACO model announced in December, as well as six physician group practice transition demonstration organizations that began in early 2011.
Some 2.4 million Medicare beneficiaries in 40 states and Washington, D.C., now are cared for by an ACO, the department announced.
At least 400 more organizations have said they will apply to become an ACO when the Centers for Medicare and Medicaid Services (CMS) begins in August accepting applications for 2013, according to Jonathan Blum, principal deputy administrator for CMS and director of its Center for Medicare.
In a briefing with reporters, Mr. Blum did not directly address whether the program could be hurt by expected attempts to defund the Affordable Care Act. Instead, he said, "This is a program that is going to grow substantially over time."
ACOs are meant to be led by physicians, working in conjunction with hospitals and other providers to deliver more efficient and better-quality care. "We really see this being led by the physician community to improve patient care," Mr. Blum said.
Of the 89 new ACOs, "almost half are physician-driven organizations serving fewer than 10,000 beneficiaries, demonstrating that smaller organizations are interested in operating as ACOs," according to a CMS statement.
However, the requirement that an ACO serve at least 5,000 Medicare beneficiaries continues to be a difficult hurdle for physician groups that would otherwise like to participate, said Mr. Blum.
The ACO effort is also known as the Medicare Shared Savings Program. The organizations that agree to participate are given the opportunity to share in whatever savings are generated. CMS estimates that the government’s savings from the program could be up to $940 million over 4 years.
One of the newest ACOs is the Westmed Medical Group, a Westchester County, New York–based physician-owned and managed multispecialty group practice that was founded in 1996, and includes 225 physicians and 1,000 employees.
Dr. Simeon Schwartz, president and CEO, said that each of group’s nine sites generally offers primary care; surgical, specialty, radiology, and lab services; and urgent care.
Westmed expects to generate savings of 5%-10% over the course of the group’s 3-year contract, mostly by shifting care from the inpatient to the outpatient setting through better coordination, he said at the press briefing. He added that providing urgent care – keeping patients out of the emergency department – is another way to save money.
In a statement, HHS Secretary Kathleen Sebelius said that having better care coordination will be one of the keys to generating savings.
"We applaud every one of these doctors, hospitals, health centers, and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care," she said.
Medicare Seeks to Pay for Postdischarge Coordination
Doctors providing primary care services could earn some additional money next year under a new Medicare proposal that would pay them for coordinating the care of their patients who have been discharged from a hospital or nursing home.
Medicare proposes to create a new G code that would allow physicians to bill for postdischarge transitional care services such as obtaining and reviewing the patient’s discharge summary; reviewing diagnostic tests and treatments; updating the medical record within 14 business days post discharge; establishing a new care plan; educating the patient or caregiver within 2 business days post discharge; and communicating with other health care providers.
The G code would apply when a Medicare beneficiary is discharged from an inpatient stay, a skilled nursing facility, an outpatient hospital observation unit, partial hospitalization services, or a community mental health center.
Officials at the Centers for Medicare and Medicaid Services (CMS) estimate that the use of the new G code could increase payments to family physicians by 7%; other doctors who provide primary care services could see a bump of 3%-5% starting in January 2013.
"Helping primary care doctors will help improve patient care and lower health care costs long term," CMS Acting Administrator Marilyn B. Tavenner said in a statement.
The addition of the new G codes is a "good step," said Dr. Glen Stream, president of the American Academy of Family Physicians. The AAFP has been working on this issue for awhile and earlier this year issued recommendations on better ways to pay for primary care services. Dr. Stream said they would next like to see the CMS develop evaluation and management codes that are specific to primary care, rather than simply increase payments for the 99213 and 99214 codes that are used by many specialties.
The postdischarge transitional care services plan was part of the 2013 Medicare Physician Fee Schedule proposed rule, which was released July 6.
But the fee schedule proposal is not all good news. The proposed rule also details the 27% across-the-board cut to physician fees scheduled to take effect on Jan. 1. The reduction is required by law, based in part on spending targets set under the Sustainable Growth Rate (SGR) formula, which links fees to changes in the gross domestic product.
That formula has been criticized by physicians and lawmakers for years. While no long-term solution to the SGR problem has ever been formulated, lawmakers have taken short-term measures to keep the physician fee cuts from going into effect over the last several years.
The proposed rule would also mean cuts to payments for many cardiology diagnostic tests. Under the proposal, CMS is seeking to expand its multiple-procedure payment reduction policy to diagnostic tests in both cardiology and ophthalmology.
Starting in January 2013, there would be an across-the-board reduction of 25% to the technical component for second and subsequent procedures performed by the same physician or physicians in the same group practice for the same patient on the same day. The cut will not apply to the professional component of the fee. The proposed rule lists 131 diagnostic cardiovascular services that would be subject to the multiple-procedure payment reduction policy.
Dr. William Zoghbi, president of the American College of Cardiology, said the planned reductions in cardiology diagnostic test fees would be bad for both physicians and patients.
"This policy disadvantages physicians who aim for efficiency, and reduces payments based on a misguided understanding of how different services, such as echocardiology and SPECT imaging, are from one another," Dr. Zoghbi said in a statement. "Furthermore, it would lead to a major inconvenience to patients."
The 2013 fee schedule proposal also outlines the implementation of the physician value-based payment modifier, which adjusts physician payments based on the quality and cost of the care they provide. The program, which was mandated under the Affordable Care Act, will be phased in over 3 years starting in 2015.
The proposed rule also would implement the physician value-based payment modifier for all medical groups with 25 or more eligible providers starting in 2015.
Groups that do not participate in the Physician Quality Reporting System would see a 1% cut in Medicare payments. Groups that do participate would be paid in part based on their performance. Groups with higher quality and lower costs would be paid more, and those with lower quality and higher costs would be paid less, according to CMS. The payment adjustments made in 2015 will be based on 2013 performance in the PQRS.
CMS will publish the proposed rule in the Federal Register on July 30, and will accept public comments until Sept. 4. The agency plans to finalize the physician payment rule by Nov. 1.
Doctors providing primary care services could earn some additional money next year under a new Medicare proposal that would pay them for coordinating the care of their patients who have been discharged from a hospital or nursing home.
Medicare proposes to create a new G code that would allow physicians to bill for postdischarge transitional care services such as obtaining and reviewing the patient’s discharge summary; reviewing diagnostic tests and treatments; updating the medical record within 14 business days post discharge; establishing a new care plan; educating the patient or caregiver within 2 business days post discharge; and communicating with other health care providers.
The G code would apply when a Medicare beneficiary is discharged from an inpatient stay, a skilled nursing facility, an outpatient hospital observation unit, partial hospitalization services, or a community mental health center.
Officials at the Centers for Medicare and Medicaid Services (CMS) estimate that the use of the new G code could increase payments to family physicians by 7%; other doctors who provide primary care services could see a bump of 3%-5% starting in January 2013.
"Helping primary care doctors will help improve patient care and lower health care costs long term," CMS Acting Administrator Marilyn B. Tavenner said in a statement.
The addition of the new G codes is a "good step," said Dr. Glen Stream, president of the American Academy of Family Physicians. The AAFP has been working on this issue for awhile and earlier this year issued recommendations on better ways to pay for primary care services. Dr. Stream said they would next like to see the CMS develop evaluation and management codes that are specific to primary care, rather than simply increase payments for the 99213 and 99214 codes that are used by many specialties.
The postdischarge transitional care services plan was part of the 2013 Medicare Physician Fee Schedule proposed rule, which was released July 6.
But the fee schedule proposal is not all good news. The proposed rule also details the 27% across-the-board cut to physician fees scheduled to take effect on Jan. 1. The reduction is required by law, based in part on spending targets set under the Sustainable Growth Rate (SGR) formula, which links fees to changes in the gross domestic product.
That formula has been criticized by physicians and lawmakers for years. While no long-term solution to the SGR problem has ever been formulated, lawmakers have taken short-term measures to keep the physician fee cuts from going into effect over the last several years.
The proposed rule would also mean cuts to payments for many cardiology diagnostic tests. Under the proposal, CMS is seeking to expand its multiple-procedure payment reduction policy to diagnostic tests in both cardiology and ophthalmology.
Starting in January 2013, there would be an across-the-board reduction of 25% to the technical component for second and subsequent procedures performed by the same physician or physicians in the same group practice for the same patient on the same day. The cut will not apply to the professional component of the fee. The proposed rule lists 131 diagnostic cardiovascular services that would be subject to the multiple-procedure payment reduction policy.
Dr. William Zoghbi, president of the American College of Cardiology, said the planned reductions in cardiology diagnostic test fees would be bad for both physicians and patients.
"This policy disadvantages physicians who aim for efficiency, and reduces payments based on a misguided understanding of how different services, such as echocardiology and SPECT imaging, are from one another," Dr. Zoghbi said in a statement. "Furthermore, it would lead to a major inconvenience to patients."
The 2013 fee schedule proposal also outlines the implementation of the physician value-based payment modifier, which adjusts physician payments based on the quality and cost of the care they provide. The program, which was mandated under the Affordable Care Act, will be phased in over 3 years starting in 2015.
The proposed rule also would implement the physician value-based payment modifier for all medical groups with 25 or more eligible providers starting in 2015.
Groups that do not participate in the Physician Quality Reporting System would see a 1% cut in Medicare payments. Groups that do participate would be paid in part based on their performance. Groups with higher quality and lower costs would be paid more, and those with lower quality and higher costs would be paid less, according to CMS. The payment adjustments made in 2015 will be based on 2013 performance in the PQRS.
CMS will publish the proposed rule in the Federal Register on July 30, and will accept public comments until Sept. 4. The agency plans to finalize the physician payment rule by Nov. 1.
Doctors providing primary care services could earn some additional money next year under a new Medicare proposal that would pay them for coordinating the care of their patients who have been discharged from a hospital or nursing home.
Medicare proposes to create a new G code that would allow physicians to bill for postdischarge transitional care services such as obtaining and reviewing the patient’s discharge summary; reviewing diagnostic tests and treatments; updating the medical record within 14 business days post discharge; establishing a new care plan; educating the patient or caregiver within 2 business days post discharge; and communicating with other health care providers.
The G code would apply when a Medicare beneficiary is discharged from an inpatient stay, a skilled nursing facility, an outpatient hospital observation unit, partial hospitalization services, or a community mental health center.
Officials at the Centers for Medicare and Medicaid Services (CMS) estimate that the use of the new G code could increase payments to family physicians by 7%; other doctors who provide primary care services could see a bump of 3%-5% starting in January 2013.
"Helping primary care doctors will help improve patient care and lower health care costs long term," CMS Acting Administrator Marilyn B. Tavenner said in a statement.
The addition of the new G codes is a "good step," said Dr. Glen Stream, president of the American Academy of Family Physicians. The AAFP has been working on this issue for awhile and earlier this year issued recommendations on better ways to pay for primary care services. Dr. Stream said they would next like to see the CMS develop evaluation and management codes that are specific to primary care, rather than simply increase payments for the 99213 and 99214 codes that are used by many specialties.
The postdischarge transitional care services plan was part of the 2013 Medicare Physician Fee Schedule proposed rule, which was released July 6.
But the fee schedule proposal is not all good news. The proposed rule also details the 27% across-the-board cut to physician fees scheduled to take effect on Jan. 1. The reduction is required by law, based in part on spending targets set under the Sustainable Growth Rate (SGR) formula, which links fees to changes in the gross domestic product.
That formula has been criticized by physicians and lawmakers for years. While no long-term solution to the SGR problem has ever been formulated, lawmakers have taken short-term measures to keep the physician fee cuts from going into effect over the last several years.
The proposed rule would also mean cuts to payments for many cardiology diagnostic tests. Under the proposal, CMS is seeking to expand its multiple-procedure payment reduction policy to diagnostic tests in both cardiology and ophthalmology.
Starting in January 2013, there would be an across-the-board reduction of 25% to the technical component for second and subsequent procedures performed by the same physician or physicians in the same group practice for the same patient on the same day. The cut will not apply to the professional component of the fee. The proposed rule lists 131 diagnostic cardiovascular services that would be subject to the multiple-procedure payment reduction policy.
Dr. William Zoghbi, president of the American College of Cardiology, said the planned reductions in cardiology diagnostic test fees would be bad for both physicians and patients.
"This policy disadvantages physicians who aim for efficiency, and reduces payments based on a misguided understanding of how different services, such as echocardiology and SPECT imaging, are from one another," Dr. Zoghbi said in a statement. "Furthermore, it would lead to a major inconvenience to patients."
The 2013 fee schedule proposal also outlines the implementation of the physician value-based payment modifier, which adjusts physician payments based on the quality and cost of the care they provide. The program, which was mandated under the Affordable Care Act, will be phased in over 3 years starting in 2015.
The proposed rule also would implement the physician value-based payment modifier for all medical groups with 25 or more eligible providers starting in 2015.
Groups that do not participate in the Physician Quality Reporting System would see a 1% cut in Medicare payments. Groups that do participate would be paid in part based on their performance. Groups with higher quality and lower costs would be paid more, and those with lower quality and higher costs would be paid less, according to CMS. The payment adjustments made in 2015 will be based on 2013 performance in the PQRS.
CMS will publish the proposed rule in the Federal Register on July 30, and will accept public comments until Sept. 4. The agency plans to finalize the physician payment rule by Nov. 1.