Accountable Care Organization, Term Paper Example

How is this ACO organized?

(It can be one of the five models listed on the Module Home page)

Accountable Care Organization is a network of health care providers, with a common goal/agreement of transparency in practice and payment procedures ensuring responsible quality care is offered to their patients/clients. As such, the organization has three models through which they function. First it is headed by providers who must have a solid primary care base through which interventions are executed. Together they are to ensure that quality care per total capita costs is provided according to health care protocol (McClellan et.al, 2010).

Secondly, payment must be associated with quality improvements aimed at reducing overall operational and individual costs. Thirdly, they are organized to apply more intense and modern performance measurements supportive of efficient methods creating financial relief within the health care system for both citizens and government. However, a great challenge facing the organization is devising the most appropriate approaches towards achieving established goals (McClellan et.al, 2010).

How do payers pay this ACO?

Payers pay through Medicare; Medicaid and private insurance benefits primarily. When a person receiving these benefits arrive for any appointment they have to show either pieces of this document to verify that they are indeed recipients. This information is validated through electronic records. Each service is coded and the provider’s code is also entered into the system. At the end of each treatment depending on the type of payment system used by the Accountable Care Organization to which the provider is attached the reimbursement is made to the provider. Before an actual payment is executed however, a claims form must be submitted. They can be submitted electronically by purchasing the Durable Medical Equipment Medicare Administrative Contractor (DMEMAC) or a fiscal intermediary (FI) from a vendor (Centers for Medicaid and Medicare, 2013).

How are payments distributed among the providers within this ACO?

There are two payment models one-sided and two-sided where sharing of profit, losses/risks incurred within a three year period are distributed equally among participating providers. Besides, in terms of receiving payments they must adapt a model of payment from the several options available. It must either be fee-for service; capitation or global payment model. Each of these models has their specific methods of distributing payments among providers. Fee for service is a physician incentive based system whereby for every service the physician prescribes the payer pays (Saucier & Fralich 2002).

In capitation there is an incentive for using less expensive care to the detriment of the patient. At the beginning of the year providers are awarded a certain amount from Medicare/Medicaid. If they reduce cost that surplus is distributed among them as an incentive. In the case of global payments when the package of care within the episode of illness for each patient is coded and calculated Medicare/Medicaid/Private Insurances distributes payments among providers based on the codes for treatment tendered (Saucier & Fralich 2002).

What quality measures are used to evaluate the performance of this ACO?

Originally, there were five domains to which quality measurements were applied. These were care coordination; patient/caregiver experience; patient safety; at-risk population/frail elderly health and preventative health. A 2011 update identified four critical key areas namely, patient/caregiver experience (7 measures); care coordination/patient safety (6 measures); preventive health (8 measures) and at-risk population. Care coordination and patient safety were merged into one domain (RTI International, 2011).

A numerical score was ascribed for each category. At risk populations contain the highest score with measurements for each critical at risk group. They include Diabetes (6 measures); hypertension (1 measure); ischemic vascular disease (2 measures); heart failure (1 measure) and coronary artery disease (2 measures). A total of 33 quality measures must be reported at the end of each data collection period (RTI International, 2011).

What are the rewards and penalties for performance quality?

The rewards for performance is allocated as ‘Pay for performance’ being phased over a three year period beginning in the first year when the ACO’s first agreement is signed. In the year first Accountable Care Organization (ACO) will receive pay for merely reporting as it applies to all 33 measures. For the second year the organization receives pay for performance for reporting 25 measures and pay for reporting applies to eight measures. In the final year three

pay for performance is given for 32 measures (RTI International, 2011).

In addition Centers for Medicare and Medicaid (CMS) Services will pay for reporting applying a survey measure of functional status. CMS keeps this measure for future application as a payment incentive during the reporting agreement period once the Accountable Care Organization complies with protocol requirements. It gives new Accountable Care Organizations time to learn the measure system and apply them to their organization’s protocol of reporting techniques. Consistent failure to comply with reporting and performance can cause the organization to lose participation in all Centers for Medicaid and Medicare programs (RTI International, 2011).

References

Centers for Medicaid and Medicare (2013). Electronic Health Care Claims. Retrieved on 9th May 2013 from http://www.cms.gov/Medicare/Billing/ElectronicBillingEDITrans/HealthCareClaims.html

McClellan, M. McKethan, A. Lewis, J. Roski, J., & Fisher, E. (2010). A National Strategy to Put Accountable Care Into Practice. Health Aff (Millwood). 29 (5), 982-990

RTI International (2012). Accountable Care Organization 2012 Program Analysis. Quality Performance Standards Narrative Measure Specifications. Quality Measurement &Health Assessment Group

Saucier, P., & Fralich, J. (2002). Financing and Payment Issues in Rural Long Term Care Integration. Maine Rural Health Research Center Edmund S. Muskie School of Public Service University of Southern Maine