28 January 2011

Assessing an ACO Prototype

This New England Journal of Medicine article is about an accountable care organization (ACOs) that is physician managed. While this has been underway for some time, it is not fully operational under the new laws which seems to be hindering its operation. This has been a demonstration project sponsored by the Centers for Medicare and Medical Services (CMS).

But understand this was directed by Congress of the Department of Health and Human Services (DHHS). The aim was to improve the quality of care to Medicare beneficiaries and reduce its cost while using the incentive-based payment. Instead they used the fee-for-service payment system. This fee-for-services payment system is faulty to begin with so this is not a good example for what the future may hold for ACOs.

In 2000, Congress gave the DHHS the task of testing incentive-based payment methods for physicians. They directed Medicare to encourage care coordination and investment in processes for more efficient service delivery and to reward physicians for improving health care results. The demonstration actually began in April 2005 and apparently still continues.

On December 9, 2010, DHHS reported results from the project's fourth year ending March 31. 2009 and announced the payout incentives. Most of the quality goals were process measures related to coronary artery disease, diabetes, heart failure, hypertension, and preventive care.

CMS is now working to transition these physician groups into the ACO program established under the reform law The CMS is drafting regulations that will guide implementation of the Accountable Care Organization (ACO) program scheduled to begin January 1, 2012.

Many questions remain because the project used the fee-for-services payment and not the incentive-based payment as directed. Will this be corrected under the ACOs or will this be a legal issue for the courts to resolve. There are many other organizational questions to be answered, but this is for future blogs.

Read the details about this here.

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