After the recent election, there is a certain buzz around Accountable Care Organizations (ACOs) and their projected impact upon Healthcare Reform.  The establishment of ACOs is part of the Affordable Care Act’s long and varied history.  The ideas behind the development of ACOS are drawn from the need to significantly reduce Healthcare costs, increase quality of outcomes and offset rising prices.  The proposed means of attaining these goals include incentive programs and meaningful technological integration.  These provider organizations, which are community-centric and operate heavily within the depleting government Healthcare programs, are seen as the most viable candidates to become ACOs.   ACOs are becoming defined as any one large organization, existing system or cluster of smaller organizations partnering as a networked, technology-driven care system with competitive and incentivized markets.  ACOs will be created around quality, cost control and tracking care outcomes.  These outcomes will be monitored and maintained by EHRs.

The slow formation of these organizations is currently driven by a combination of the act itself and many market interactions that are creating large, private health institutions and their hospital chains.  The result may be the formation of even larger networks, connected by Meaningful Use interoperability, reducing costs for these physicians through technological integration among these existing systems.  Or as to say in the words of our founder Dr. Eric Fishman “this time the technology will be the glue that sticks this business model together.”  This statement is of course referencing some reform failures of decades past.

The markets for both large health systems and insurance companies, respectively, are likely to consolidate heavily due to these legislative changes intended to incentivize better care and increased efficiency of claims from new technology.  As we speak the HHS is attempting to do some analysis of how these major changes will unsettle the economy from a financial markets standpoint.  With costs continuing to rise and HITECH stimulus well underway, it is highly unlikely that the path already devised for ACOs will meander too far from the current mark, even if the act is overturned in congress.

At the same time, market and legislation interactions are culminating to form other unprecedented circumstances.  More specifically, there is a trend of larger healthcare systems and their hospitals not only attracting new talent, but also integrating younger physicians, of whom are requiring workflows based in the most current Health Information Technology.  Other data is showing that recent graduates, residents and physicians would rather work for an institutional hospital or independent healthcare system than operate their own practice.  Legal costs, technological integration costs, reporting and other newly required standardization in the Healthcare world will definitely incentivize this integration model further.

We had this information further confirmed by Justin Barnes Chairmen Emeritus of the EHR Association and a government affairs executive of Greenway Medical Technology, Inc., the vendor of PrimeSuite EHR.  Justin regularly testifies to Congress about the development of these industries and other technologically involved issues, pertaining to Healthcare Reform.  You can see our interview coverage here.

The AMA on ACOs

The American Medical Association (AMA) has directed the subject matter of these reform issues as well.  They are extending their influence by releasing some discussion points, guidelines and opinion regarding how Congress should be or is attempting to define reasonable characteristics of ACOs.  The documents also outline certain operations as qualifying an organization for classification as an ACO.  They have even gone so far as to establish an informational repository for those inquiring further about the nature of these issues. In the talking points two major mentions affecting EHR implementation gained our attention.

In setting up the quality measurement standards for ACOs, CMS should consider that the Physician Quality Reporting Initiative (PQRI) program includes only a small number of “intermediate” outcomes measures…These types of measures focus on short-term outcomes, whereas true “outcome” measures are longitudinal and population-based.  Additional resources and time are necessary to gather evidence base, assess methodologies for-risk adjustment, and test outcome measures for feasibility and reliability prior to broad based implementation.

This exemplifies the need to apply and improve existing measures when evolving the outcomes nucleus of the entire Affordable Care Act (or any future reform act) and subsequent organizations in this regard.  In addition to the above, it is mentioned that the risk measures and resulting efficiency measures have to be improved upon significantly before any true outcomes enrichment can be established.  The discussion points then move to risk and quality metrics for efficiency and then to discuss EHRs directly.

ACOs will need to report quality measures using health information technology (HIT), but specifying quality measures for use in electronic health records (EHRs) is a detailed process that requires the development of new specification sets.  The AMA PCPI is working on these specifications but they will need to be tested to ensure physicians can consistently use their EHR to report quality measures.

Again the emphasis on EHR and HIT cannot be understated. When attempting to make these issues truly function in a harmonic fashion, the quality of technology is paramount.  As is clearly established through HITECH Act ONC Meaningful Use rules, usability and interoperability are the foundational elements to any of these improved systems of care delivery and cost management.

But these are not the only issues affecting implementation.  There are existing layers of Anti Trust law, specifically the Ethics in Patient Referrals or “Stark laws,” which were established to specifically prevent caregivers from networking outside of organizations to create an anticompetitive market scenario.  The AMA has provided the opinion that Safe-Harbors should be created to shelter operations within these ACO networks.  These networks and incentives payments to them would be otherwise operate in activities that are otherwise classified as prohibited under Anti-Trust and Anti-Kickback laws.  With these Safe-Harbors in place, incentives for ACO practitioners are able to be established as a reward for maintaining patient outcomes across the referrals spectrum.

It can also be derived from this Safe-Harbor opinion that the AMA is suggesting the current Healthcare situation’s status is not due to the actions of physicians.  Most will agree that the incentive structures currently skew to the favor of insurance companies.  This taking place while all parties are operating within the law and in their own fiduciary duties.  Therefore the nature of the current interaction between payer and practitioner will have to be incentivized in a way to allow for all parties to have an equitable scenario.  Easier said than done, of course.

HHS on ACOs: Center for Medicare and Medicaid Innovation

The HHS is also taking cues from industry thought leadership.  The CMS is moving to take an additional and different approach to solving some of the quandaries currently extant in Healthcare by their own methods. The most recent step in ACO formation is the establishment of The Center for Medicare and Medicaid Innovations (CMMI).  This specific organization will be undertaking research and workgroups focused on “patient outcomes” and “community care models.” They are even taking public comments at the moment.  This center will perpetuate new efforts toward the development of ACOs in addition to finding ways to approach Medicaid and Medicare from new directions and analysis.  There is an expressed interest in the speed and pace of the solutions development as an underlying layer of the CMMI strategy. Hopefully the CMS are putting a full effort forward.

The Crystal Ball

While there are no final decisions on ACOs yet, how these rules will develop over the next few years in the 112th congress is indeterminate.  The road to the mortgage crisis was paved with the intention for affordable and equitable housing for all.  We have to make certain that this time the legislation based around cost-reasonable and quality healthcare is not providing parallel incentives that can result in unfavorable outcomes.

At any range or rate, EHR Scope will be keeping a close eye on the future funding for implementation activities and reform under the 112th Congress.