WIXLIB

Which Entities are Eligible to be an ACO?(E i i IInvolving(Entitiesl i HHospitals)i l)MSSPEligible EntitiesPioneer ProgramEligible EntitiesKey Differences inDefinition of HospitalMSSPPartnerships or joint Same as SSP, exceptventures betweenthat definition ofhospitals and ACO“hospital” is broaderprofessionalsp“Hospital” definedto mean an acutecare hospital subjectto inpatientpprospectiveHospitals employing Same as SSP, except payment systemACO professionalsthat definition of(IPPS) (consistent“hospital” is broader with PPACArequirements) 2011 Rivkin Radler LLP. Privileged & ConfidentialPioneer Program“Hospital” definedto include not onlyacute care hospitalssubjectj to IPPS butalso certain non‐IPPS hospitals,including cancerhospitals,p, children’shospitals, and CAHs23

Which Entities are Eligible to be an ACO?(C i i l A(CriticalAccess HHospitalsi l (CAHs))(CAH )) Medicare provides two payment methods for outpatient CAHs:– Standard Method (Soc. Sec. Act 1834(g)(1)): CAH bills afacility fee and claims for professional services areseparatelysepaa e y billedb ed by anda d paidpa d too thee renderinge de g physicianp ys c a– Method II (Soc. Sec. Act 1834(g)(2)): CAH bills for both thefacility fee and the professional services fee CAHCAH’ss that bill under the Standard Method are ineligible toparticipate in the MSSP because CMS concluded that they lackthe requisite data elements necessary for patient assignment CAHCAH’ss that bill under Method II are eligible to participate in theMSSP (and form their own ACO) because CMS concluded thatthey have the requisite data elements necessary for patientassignmentg 2011 Rivkin Radler LLP. Privileged & Confidential24

Which Entities are Eligible to be an ACO?(FQHC and(FQHCsd RHCs)RHC ) In MSSP pproposedprule,, CMS asserts that Federallyy QualifiedHealth Center (FQHC) and Rural Health Center (RHC) claims andpayment systems lack requisite data elements necessary forpatient assignment, so their patient population cannot beassigned to the ACO:– Patient population is assigned based on utilization of primarycare services furnished by a physician– Requisite data elements for assignment are (i) specificservice rendered (i.e. primary care HCPCS codes), (ii) type ofpractitioner (i.e. physician as opposed to PA or NP), and (iii)specialty of practitioner (i.e. primary care)– FQHC/ RHC claims systems distinguish general classes ofservices by revenue code, but do not have HCPCS codes thatidentify the specific service rendered and contain onlylimited information on the practitioner rendering the service 2011 Rivkin Radler LLP. Privileged & Confidential25

Eligibility of FQHCs/ RHCsto ParticipateP i iiin MSSP In MSSP,, FQHCs// RHCs cannot form their own,, independentpACO– Since CMS is unable to assign the FQHC/RHC patientpopulation to the ACO, an ACO formed by an FQHC/ RHCwould have no patient population assigned to it In MSSP, FQHCs/ RHCs may join an ACO formed by eligibleproviders– But even in this case, the FQHC/ RHC patient population willnot be assigned to the ACO– Nonetheless, the ACO has certain financial incentives toinclude FQHCs/ RHCs (to be discussed later on) In MSSP proposed rulerule, CMS indicated that it will seek to testways for collecting requisite data from FQHCs/ RHCs and atsome future date may allow FHQCs/ RHCs to fully participate inthe MSSP 2011 Rivkin Radler LLP. Privileged & Confidential26

Eligibility of FQHCsto ParticipateP i iiin PiPioneer ProgramP In Pioneer program,program CMS would negotiate with theFHQC methods for patient assignment, expenditurebaseline, and expenditure benchmark calculations In Pioneer program, FQHCs may form own ACOs orjoin ACO formed by others 2011 Rivkin Radler LLP. Privileged & Confidential27

Which Entities are Eligible to be an ACO?(O h providers(Otherid andd suppliers)li ) Other Medicare providers and supplies (includingambulatory surgery centers, skilled nursing facilities,long term care hospitals, etc.) are not eligible to forman ACO on their own Nonetheless, these other providers/ suppliers mayjoin an ACO formed by eligible providers and serve asan “ACOACO ParticipantParticipant” in such ACO– Their patients will not be assigned to the ACObased on their claims data– But they may be otherwise equivalent to otherACO participants, including with respect togovernance, distribution of shared savings, etc. 2011 Rivkin Radler LLP. Privileged & Confidential28

Pioneer ACO Selection Criteria Pioneer ACO applicationto be reviewed by a panelof experts fromDepartment of Healthand Human Services andother organizations Reviewed applicationswill be scored, based oncriteria set forth in thePioneer Program Requestf ApplicationforVulnerablepPopulations(5 points)Potential forproducing three‐part aim(20 points)Leadership andManagement Capabilities(20 points)Performance Capabilities/HIT infrastructure(20 points)PatientCenterednessCapabilities(10 points)Experience with Financial Risk‐Sharing(25 points)Summary of Selection Criteria and Scoring 2011 Rivkin Radler LLP. Privileged & Confidential29

Must Providers be Exclusive to an ACO?In both the MSSP and the Pioneer Program: An ACO Participant upon which patient assignment is dependentmust be exclusive to the ACO– Primary care physicians must be exclusives since,since asdiscussed later, assignment is dependent upon them– Primary care physician means Internal medicine General practice Family practice Geriatric medicine An ACO Participant upon which patient assignment is notdependent need not be exclusive to the ACO 2011 Rivkin Radler LLP. Privileged & Confidential30

Legal Structure Requirements In both the Pioneer Program and the MSSP: ACO must be a legal entity with its own taxidentification number (TIN) ACO may be structured as any type of entitypermitted under state law (i.e. corporation, limitedliability companycompany, partnership,partnership etc.)etc ) A pre‐existing legal entity need not form a new entityif it otherwise meets all ACO eligibility requirements ACO need not be Medicare‐enrolled (although eachACO participant must be Medicare‐enrolled) 2011 Rivkin Radler LLP. Privileged & Confidential31

Governance Requirements – ACO MustHHaveMMechanismh i ffor ShShareddGGovernanceMSSP Governance RequirementsPioneer Governance RequirementsGOVERNING BOARD(i.e. Board of Directors) 75% controlled by ACO participantsEach ACO participant Eachto have proportionate control Must include a patient representative CMS stated that PioneerACO governancerequirements are “similar”to those under MSSP,although it did not set forthspecific requirements Exception:– Governing Board mustalso include a consumeradvocate (in addition tothe patientrepresentative)QUALITY ASSURANCE/PROCESS IMPROVE‐MENT IVEDIRECTOROFFICER(B d C tifi earrangements may be vkinRadlerLLP.PrivilegedConfidentialacceptable, provided they have requisite capabilities32

Additional Requirements Internal Processes Requirements – Use and promotion of evidence‐basedmedicine– Patient engagement– Reportingpg on qualityqy and costmeasures– Promoting coordination of carePatient‐Centeredness Requirements– Patient experience of care surveyprocess– Patient involvement in governance– Process for evaluation of populationhealth needs and consideration ofdiversity– Process and systems for identificationof high risk individuals, individualizedcare plans for target populations, andintegration of community resources 2011 Rivkin Radler LLP. Privileged & ConfidentialPatient Centeredness (Cont.)– Processes for coordinationof care, including healthinformation exchange– Processes forcommunicating clinicalknowledge/ evidence‐based medicine withpatients– WrittenW itt standardst d d forfpatient access andcommunication, includingaccess to patient records– Processes for measuringclinical performance andusing the results to improvecare and service over time33

EHR Meaningful Use Requirements In both MSSP and Pioneer Program: As a condition to continued participation in theprogram, at least 50% of ACO’s primary carephysicians must be meaningful EHR users (as definedin the HITECH Act) by start of second year, in MSSP,and byy end of 2012,, in the Pioneer pprogramg In addition, the percentage of primary care physicianswho are meaningful EHR users will be reflected in theACO’ qualityACO’sli score (to( bbe didiscussedd laterlon)) 2011 Rivkin Radler LLP. Privileged & Confidential34

Focusing OnTheh Patient PopulationlAccountableCareOrganizationPrimary ts forOutcome‐Basedd PaymentsHealthPlanAncillaryHealth CareProvidersProvide Coordinated CareDefinedPatient Population 2011 Rivkin Radler LLP. Privileged & Confidential35

Patients’ Freedom of Choice of Provideri RisRetainedi d iin BBothhPPrograms An ACO is “assigned”assigned a patient population “Assignment” refers only to an operational processundertaken by CMS to attribute patients to an ACO;patient does not enroll in an ACO There are no restrictions on a patient’s freedom tochoose providers outside of ACO With respect to the above items, there are nodifferences between the Shared Savings and thePioneer programs 2011 Rivkin Radler LLP. Privileged & Confidential36

Composition and Numberoff AAssignedid PatientP iPPopulationl iMSSPPioneer ProgramType of PatientMedicare FFS beneficiariesMinimum Numberof PatientsAt least 5,000 Medicare FFSAt least 15,000 Medicare FFSbeneficiaries must be assigned beneficiaries must be assignedto the ACOto the ACOException: For rural ACO(whose majority of cliniciansare locatedl t d iin rurall areas),) ththeminimum is 5,000Consequences ofassigned patientpopulation fallingbelow the minimumnumber during theparticipation term(i) ACO given a warning andSameplaced on a correction plan; (ii)If the number of assignedpatients does not return to theminimum floor, thenparticipation will beterminated 2011 Rivkin Radler LLP. Privileged & ConfidentialSame37

Patient Assignment:Th BTheBasici CConcepts Under both programs,programs patient population is assignedon annual basis for each performance year – i.e.assigned patient population is redefined annually andmay differdiff fromfyear tto year. Under both programs, patients are to be assigned toan ACO based on their utilization of pprimaryy careservices provided by the ACO, although the specificmethodology differs 2011 Rivkin Radler LLP. Privileged & Confidential38

Patient Assignment:Th BTheBasici CConcepts Timing of the assignment:– Prospective assignment: Patients assigned at the beginningof each performance period, based on utilization datademonstratingdeo s a gpprovisiono so oof primaryp a y careca e servicesse ces too patientspa e sprior to the performance period– Retrospective assignment: Patients assigned at the end ofeach pperformance pperiod,, based on utilization datademonstrating provision of primary care services to patientsduring the performance period There are differences amongg the programsp gwith respectp totiming of assignment 2011 Rivkin Radler LLP. Privileged & Confidential39

Patient AssignmentU d theUnderh MSSP At the end of each performanceyear, the ACO is assigned on aretrospective basis those MedicareFFS beneficiaries who received– the plurality of their primarycare services (as determined bythe charges for the services,not their frequency or otherfactor)– from primary care physicianswho are ACO Participants ofthat ACO– during that performance year 2011 Rivkin Radler LLP. Privileged & Confidential Primary care PhysiciansInternal medicineGeneral practiceFamily practiceGeriatric medicinePrimary care Services(Identified by HCPC Code)99201 to 9921599304 to 9934099341 to 99350G0402 (Welcome toMedicare visits)G0438, G0439 (annualwellness visits)40

The “Expected” Assigned PopulationU d theUnderh MSSP At the beginning of each performance year andcontinuing periodically thereafter, CMS will provide tothe ACO certain data on the “expected” assignedpopulationl ti off theth ACO “Expected” assigned population is intended as a proxyfor that which could ppotentiallyy be assignedgto theACO at the end of the performance period Expected assigned population is comprised ofhihistoricallyi ll assignedi dbbeneficiariesfi i i andd may differdiff ffromthe patient population that is actually assigned at theend of the performance period 2011 Rivkin Radler LLP. Privileged & Confidential41

Patient AssignmentU d theUnderh PiPioneer ProgramP Pioneer ACO may elect either– Retrospective assignment (which would be nearlyidentical to the MSSP assignment process); or– Prospective assignment Patient assignment for FQHCs/ RHCs 2011 Rivkin Radler LLP. Privileged & Confidential42

Prospective AssignmentU d theUnderh PiPioneer ProgramPPioneer ACO Start %weighting CMS will analyze claims data of ACO participants for the threeprior years (with the most recent year weighted most (as shownabove) to identify patients who received the plurality of theirprimary care services (as determined by the charges) during thatthree year period (as weighted) from providers who are ACOParticipants of that ACO CMS will engage in a two‐step process, as discussed in thefollowing slide 2011 Rivkin Radler LLP. Privileged & Confidential43

The Two‐Step Process for ProspectiveA iAssignmentUnderU d theh PioneerPiProgramP Step 1: CMS will first identifythose patients who received theplurality of their primary careservices from primary careproviders who are ACOparticipants of that ACO Step 2: For patients who had10% or less of their evaluationand management allowedcharges billed by PCPs, CMS willidentifyf the group off eligiblespecialist physicians who billedthe plurality of E&M allowedcharges for that patient.patient 2011 Rivkin Radler LLP. Privileged & ConfidentialUnder Step 1, “Primary CareProvider” has same meaning as“primary care physician” in MSSP,except that it includes nursepractitioners and physician assistants)Under Step 2, “eligible specialists” are: Nephrology Neurology Oncology Pulmonology Rheumatologygy Cardiologygy Endocrinology44

Assignment by Certification Available forPiPioneerACOACOs withi hPProspectivei AssignmentA i Pioneer ACOs who have selected prospective assignment mayhave patients assigned to it by certification (i.e. an affirmativeattestation by the patient rather than claims‐based algorithms)– Intente iss too allowa o patientspa e s anda d providersp o de s too aligna g based onomutually acknowledged care relationships Patients who newly enroll in Medicare or disenroll from aMedicare Advantageg pplan,, althoughg these will not be included inthe financial calculations of the ACO until after having accrued12 months of FFS experience Patients who alreadyy have 12 months of FFS experiencepmayyattest at anytime, but will not be included in the ACO’s financialcalculations until the subsequent performance period 2011 Rivkin Radler LLP. Privileged & Confidential45

End‐of‐Period Modifications to thePProspectivelyi l AAssignedidPPopulationl i Pioneer ACOs that select prospective assignment will beaccountable for all their prospectively assigned patients at theend of the performance year, with certain exceptions: Exceptions:cep o s– Patients who have any months of Medicare Advantageenrollment or enrollment in only Part A or only Part B at anypoint duringg the ppperformance yyear– Patients who transfer their Medicare address to a CoreBased Statistical Area or rural county that is not adjacent tothat the of ACO’s location– Patients who receive more than 50% of their evaluation andmanagement allowed charges in non‐adjacent CBSAs or ruralcounties duringg the performanceppperiod 2011 Rivkin Radler LLP. Privileged & Confidential46

Focusing In On AccountabilityAccountableCareOrganizationPrimary ts forOutcome‐Basedd PaymentsHealthPlanAncillaryHealth CareProvidersProvide Coordinated CareDefinedPatient Population 2011 Rivkin Radler LLP. Privileged & Confidential47

Participation Agreementandd itsi TermTMSSPPiPioneerPProgramAgreement ACO must enter into a participation SameRequirement agreement with CMSCommence‐Cment ofTermJJanuary 1 followingf ll i approvall offapplication, with first start date tobe January 1, 2012 (possibly asecond start date of July 1, 2012)3 d off 4th3rd4 h quarter off 2011Length ofTerm 3 years ACO performance periods areannual, for a total of 3 annualperformance periods in the term Minimum of 3 performance periods(slightly longer than 3 years due toearly start date), with two one‐yearoptional extensions (for a total ofapproximately five years) 2011 Rivkin Radler LLP. Privileged & Confidential48

How Are an ACO and its ParticipantsPaid?id? Theh ThreehBasici Modelsd lVolume-Based/Less RiskOne‐Sided Shared Savings ACO participantscontinue to receivepayments under theMedicare FFS programunder Part A and PartB in the same manneras otherwise be made In addition, ACO isentitled to a portion ofsavingsiachievedhi d ifspending is less thanbudget targets,provided certainquality standards aremet 2011 Rivkin Radler LLP. Privileged & ConfidentialOutcome-Based/More RiskTwo‐Sided Shared Savings Same as oneone‐sidedsidedshared savings model,except that:i.ACO also is accountablefor losses to the extentactual spendingexceeds budget targetsii.Percentage of sharedsavings payable to theACO is greater thanunder the one‐sidedmodel Partial CapitationACO participantscontinue to receive FFS,but at lower ratesACO also receives aprospective, capitatedpayment equal to theremainder of the ACO’sFFS projected revenue.Some models alsocontain bonuses/penalties based onachievement of budgettargets and qualitymeasuresmeasures.49

The Full Continuum ofOOutcome‐BasedB d PaymentsPVol

the pioneer aco program is the first aco pilot program developed by the innovation center it is intended to support "vanguard" organizations in the traaso aonsformation of their busbus essiness model to the aco model by entering into aco arrangements with medicare and other purchasers (including medicaid and commercial payors) so as to