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Carol Corp. responds to CMS RFI on ACO
On December 3, 2010, Carol Corp. CEO Tony Miller responded to CMS' RFI on the ACO regulations. Miller wrote to Administrator Berwick highlighting the need for provider leadership for the transformation from volume to value-based care to be successful. Another key message focused on the lessons learned from early pay-for-performance initiatives, particularly that rewards for value-based care must be high enough to provide a strong business case for transformation and to overcome the inertia of the traditional fee-for-service volume model.
December 3, 2010
Donald M. Berwick
Administrator, Centers for Medicare & Medicaid Services
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, MD 21244-1850
Re: Medicare Program; Request for Information Regarding Accountable Care Organizations and the Medicare Shared Saving Program (CMS-1345-NC)
Dear Dr. Berwick:
Carol Corp. ("Carol") is pleased to have this opportunity to submit our response to the Medicare Program; Request for Information Regarding Accountable Care Organizations and the Medicare Shared Saving Program ("Request for Information") issued by the Centers for Medicare & Medicaid Services (CMS).1 Carol was founded in 2006 with the mission of transforming the delivery and financing of health care by ensuring that quality providers realize the financial benefit of delivering market-leading clinical performance. Through a comprehensive suite of offerings, Carol works in partnership with leading health systems to help them successfully transition from volume- to value-driven health care. The Carol team is a multi-disciplinary group of health care professionals with extensive provider and payer experience, and we work with health care providers to develop and execute the clinical integration vision and financial restructuring necessary to deliver high-value accountable care.
Carol believes that the new Medicare Shared Savings Program enacted by section 3022 of the Affordable Care Act (ACA) presents an extraordinary opportunity to transform and improve health care by simultaneously improving beneficiary quality of care while reducing health care costs. ACOs promise to move the Medicare program, and potentially other payers, from traditional, volume-driven, inherently inefficient, and counter-productive fee-for-service financing to a value-driven, patient-centric approach to payment and care delivery. Private sector projects led by Carol and other innovators have already demonstrated that, when designed and executed properly, accountable care produces positive results for patients, physicians, and payers. Carol has worked with health systems to produce higher quality of care, increased patient safety, improved patient satisfaction, strong care management and coordination, and lower costs. From this experience, we have learned there are five elements key to any successful care redesign and sustainable ACO implementation:
- Leadership for Change: Strong physician and health provider leadership and an organizational commitment to change.
- New Care Model: A team-based, patient-centric care delivery model.
- Fully Functioning Team: All team members function to the full extent of their licensure.
- Evidence-Based Care: Clinical care practices and procedures are redesigned based on best practices and evidenced-based medicine.
- Continuous Improvement: Organization-wide commitment to continuous quality improvement based on ongoing internal evaluation of outcomes, review of literature, and adoption of best practices.
In this letter, we make recommendations in response to your Request for Information on a) financial incentives; b) flexibility and testing additional payment models; c) quality measures and; d) collaboration.
Recommendations for Successful Accountable Care Organizations
The ACO model requires a restructuring of the traditional health care model. This involves structural changes, new collaborations between various types of health care providers, and openness to different care delivery and payment methodologies. Providers will be required to look at clinical performance differently, and, by extension, Medicare's ACO policies must explicitly support these fundamental changes in the delivery of care. From the perspectives of both clinical care improvement and population health management, this requires incorporation of new data sources, comprehensive decision support, and solid clinical analytics – all in a framework of continuous, data-driven, evidenced-based quality improvement.
The high level of investment and change required by health care providers to become successful ACOs makes it critical for CMS to promulgate regulations that enable unique and innovative models across the country to succeed. To that end, we have set forth below the recommendations CMS should consider as it develops the ACO regulation.
Financial Incentives
The success of the ACO program depends heavily on establishing sufficient financial incentives. The establishment of savings thresholds, benchmarks, and shared savings percentages must be set in such a way as to not provide a disincentive to providers who want to become ACOs. Because there is a substantial infrastructure investment required to become an ACO, it will be critical for incentives to be significant enough to ensure participation. Put simply, in order for this investment to be worthwhile, there must be a realistic possibility that a successful ACO's medical operating income can exceed levels that would have existed under traditional fee-for-service Medicare. The lessons from early pay-for-performance initiatives have demonstrated that rewards must be high enough to provide a strong business case for transformation and to overcome the inertia of the traditional fee-for-volume model.
As CMS considers the possibility of withholding a certain percentage of savings from ACOs to account for random variation, it is worth considering alternative options so as not to create significant disincentives for providers to participate. One such possible alternative model would be a withhold of an initial percentage of savings that could be set aside in a reserve fund for the ACO site that can only be accessed after a three-year period. By reserving some portion of the savings, CMS allows for additional time to evaluate the causality of what is affecting the savings without penalizing those providers that step forward to act as an ACO. Additionally it starts to reinforce the financing disciplines necessary for delivery systems to take on population health management.
Flexibility and Testing Additional Payment Models
While the promise of ACOs is substantial, the ACO program will only successfully transform health care if CMS permits a substantial amount of flexibility and innovation from participating organizations. First, CMS should allow the testing of various payment and delivery models to accommodate providers' unique needs and capabilities, so long as these models accomplish the primary objectives of improving the quality of care for patients and lowering health care costs. What works for one ACO may not work for another, and providers need flexibility to develop a roadmap that will work for their practice, patients, and within their unique health care market. Importantly, allowing greater flexibility will give CMS the opportunity to determine what models are working and discontinue those that are working less effectively going forward.
Second, CMS should enable entities that are advanced and willing to take on risk to do so and should provide a higher level of shared savings when successful. ACOs should enable the alignment of actuarial value and allow those providers who are in charge of managing care intensity to take on the risk for that care. Effectively managing care will result in cost savings that can be used to reset benchmarks and rebase payments. The ACO regulation should move the health care system away from incentives that focus on health care inputs, to a system that focuses on, supports, and provides incentives for outcomes and effective patient management. Moreover, CMS should be transparent with respect to the actuarial assumptions and development of benchmarks against which ACOs will be measured, which will enable ACOs to be more efficient, targeted, and successful in the long run.
Lastly, CMS should also facilitate the creation of multi-payer ACOs. While Medicare is the largest buyer of hospital and physician services, it is essential for Medicaid, private health plans, and self-insured employers to be partners in the ACO effort in order to be truly transformative. The larger proportion of a provider's patient base covered under the ACO model, the stronger and faster the clinical and financial benefits will be realized for patients, providers, and payers.
Quality Performance Standards
Carol strongly supports the need to develop quality performance standards that ensure high quality outcomes, and, particularly, quality standards that specifically measure those outcomes that ACOs are designed to achieve. Specifically, ACOs should be held accountable for improved patient outcomes, population health, coordination of care to reduce unnecessary spending, patient management, and patient experience.
Collaboration
In addition, we encourage CMS to support regular collaboration and information-sharing among innovative providers and early adopters, including the many private sector accountable care initiatives Carol and others are assisting throughout the nation, in order to ensure that other providers realize the benefits of lessons learned.
Conclusion
We appreciate the opportunity to respond to this Request for Information, and we look forward to working with CMS as it continues to develop and implement the Medicare Shared Savings Program. If you have any questions or need any further information in connection with the agency's forthcoming proposed rulemaking, please do not hesitate to contact us.
Sincerely,
Tony Miller
175 Fed. Reg. 70165 (Nov. 17, 2010).
