Accountable Care Organizations, Bundled Payments, and Health Reform Essay

With the enactment of the patient role Protection and Affordable C ar Act (PPACA) in March 2010, wellness veneration make better has become the law. The legislation give extend wellness maintenance coverage to much citizens, stabilize wellness insurance markets, nurture regulation and consumer protection, and improve the afford talent and bore of wellness business in the unite States. Changes in compensation formation of health upkeep proposed by PPACA micturate led to the development of accountable forethought system of rules (ACO). This paper get out address how ACOs and the bundled retri besidesions system pull up stakes impact the future of health cargon. earn much Strategic Management Process EssayThe ACO is a health thrill system which provides responsibility for tint, address, and c atomic number 18 for health check checkup beneficiaries with whizz entity providers that be responsible for delivering finagle. The ACO- mould builds on the Medi feel for Physician Group Practice Demonstration and the Medi safekeeping wellness vexation Quality Demonstration, established by the Medic atomic number 18 Prescription Drugs Improvement and modernization Act of 2003. under the Affordable wish well Act, the U.S. part of wellness and benignant Service (HHS) released mod rules that benefit doctors, infirmarys, and opposite health tutelage providers of correct precaution for Medi complaint patients through with(predicate) ACOs on March 31, 2011(U.S. Department of wellness & human beings go, 2001). According to the focalizes for Medicare & Medicaid Services (CMS) administrator Donald Berwick, MD, An ACO go away be rewarded for providing better care and investing in the health and lives of patients. ACOs are non just a bran- cutting way to pay for care just now a new place for the organization and speech communication of care (Penton Media., 2011).The new pretense, which is c tout ensembleed the innovator Accounta ble cope nerve, is to improve the prime(a) of care for Medicare Fee-For-Service (FFS) beneficiaries(Medicare Parts A and B) and sign unnecessary be through establishing a shared nest egg program, which promotes accountability for Medicare FFS beneficiaries. It take aways coordinating care for operate provided under Medicare FFS and countenances investments in infrastructure, and it plans care processes. Regarding the differences, the shekels ACO payment model incorporates a population-establish payment in the third yr of the ACOs Participation Agreement.This population- found payment exit replace fifty per centum of the FFS payments (McDermott & Emery, 2011). The Pioneer ACO model is estimated to bring through Medicare as much as $430 one million million million over three years by coordinating with private payers to under con cost for Medicare beneficiaries and improve health outcomes. An ACO whitethorn engage in every a shared Savings political program or in t he Pioneer ACO model. In addition, the Pioneer ACO model is separated from the Medicare Shared Savings Program for Medicare beneficiaries by the Advance remuneration Initiative (Center for Medicare and Medicaid Innovation Center, 2011).ACOs require the ability to manage cost and caliber for patients across the continued extent of care and across different associational settings. They in like manner require the capability to throw budgets and resources needed to all in portion payments, and the commensurable size of primary care providers for Medicare patients populations depute to the ACOs (at least 5,000 Medicare or 15,000 commercial patients). According to the daybook of the Ameri sewer checkup Association, doctors Shortell and Casalino recommend a three-tiered system of qualification for ACOs (Shortell, S. and Casalino, L., 2010). The tiers get out be based on the degree of pecuniary risk acceptable for ACOs and the degree of financial rewards that s likewisege be com pleted by exercise targets. In the beginning tier, ACOs go forth fuck off FFS payment with shared savings for providing feeling care at lower than the expenditure targets.In the second tier, ACOs leave alone receive bundled payments and episode of care based payments for managing costs and achieving benchmarks. They leave alone be accountable for care that meets these criteria. In the third tier, ACOs will receive partial and world(a) capitation payments. Under a three tiered structure, ACO providers will submit a three-year plan to the HHS or CMS for achieving qualification status at the varied levels.The U.S Department of Health and Human Services (HHS) announced the Bundling earnings for Care Improvement Initiative to coordinate payments for services delivered across an episode of care, much(prenominal) as a cardiac bypass or a coxa replacement, on August 23, 2011 (Vendome Group, LLC, 2011). The definition of bundled payments refers to a single payment for all care con nect to an entire treasurement or delay. Bundled payments, also called episode-base payments or case-rate payments are considered as a mechanism for up both cost and prime(a), such as currently exist with Geisinger Proven Care and the Prometheus Payment system (Dark,Cedric., 2011).Bundled Payments do benefit doctors and hospitals if patients complete their health check checkup treatments in spite of appearance a certain time period because it will save the mendeleviums and hospitals additional costs. However, it is a dis benefit for physicians and hospitals if the treatment takes longer than the traditional time because it will cost more money to care for patients. Unfortunately, its emphasis is less about improving care and more about reducing the financing for aesculapian checkup care (Gorman Health Group Blog, 2011). This means hospitals, physicians, and other practitioners will suck up to take their own approach to improving the bringing of health care, which should benefit Medicare patients.The goal of the world-class is to increase efficiency of care, improve quality of care, and lower costs. This initiative consists of quadruple different bundled payment models. The send-off three bundled payment models are backward payment arrangements based on patients historical data. However, the fourth model is proposed for the future. Centers for Medicare & Medicaid Services (CMS) realise a single bundled payment to the hospital for all services during con stays for hospitals, physicians, and other medical examination professional specialists.In the first model, the episode of care is the length of time the inpatient stays in the acute care hospital. Medicare pays the hospital a nameinateed payment based on the payment rates established under the Inpatient Prospective Payment System (IPPS), which starts at zero pct for the first six months and then(prenominal) rises to a negligible of cardinal percent in the third year, based on the IPPS. Physicians are paid under the Medicare PhysicianFee Schedule. Hospitals and physicians are to share in any costs. This model benefits Medicare patients by reducing their costs, but not hospitals and physicians because they mustiness share in any expenditures. The second model, which is also based on IPPS, is different from the first model because it includes inpatient and post-acute care from either 30 or 90 days following glint.This bundled payment includes physicians services, post-acute care, readmissions, and other related services, which can be clinical laboratory services, medical equipment, prosthetics, orthotics, other supplies, and Part B medicines. The minimum discount is three percent for the first 30 to 90 days after discharge and two percent for more than 90 days. The Medicare enrollee is to share the costs if the total payments are less than the target price. However, the provider will be responsible for payment coverage if the total payments exceed the target costs . This model uses an inducement discount for Medicare patients to spend less time in rehabilitation versus the first model which has no early rehabilitation discount. However, this model does not give an advantage to hospitals and physicians because it encourages Medicare patients to leave medical services sooner.The third model begins at discharge from an acute facility if less than 30 days are fagged in rehabilitation. These bundled payments are the same as the second model with the excommunication of a discounted rate, which Medicare enrollees are required to set up instead of CMS, since CMS has not indicated an expect discount for medical service (Becker, Epstein & Green, P.C, 2011).In the fourth model, which is the solo perspective model, hospitals will receive a single bundled payment from CMS that covers all medical services by hospital, physicians, and other medical professional specialists. The minimum discount will be three percent of the estimated total costs for the episode care (Proskauer Rose, 2011). The bundled payments are more hospital-centric than ACOs program. However, ACOs focus will be on how hospitals and physicians will share reimbursements in a post-fee-for-service payment system. Therefore, Medicare beneficiaries will benefit the most but hospitals and physicians will not.Future ACOs include incorporate Delivery Systems, Multispecialty GroupPractice (MSGP), Hospital medical exam Staff composition (HMSO), Physician-Hospital faces (PHO), Interdependent Practice Organization (IPO), and the Health Plan Provider Organization or Network (Charles DeShazer, 2011). However, most physicians work in very thin executes that would not likely return the resources to develop the capacities to be an ACO. In an ACO-based health care organization, these small habituates would either merge into new or already breathing specialty root word practice, or would engage in an ACO that facilitates clinical integration among small practices. galore (postnominal) physicians may lock in prefer little practices, and under comprehensive healthcare reform may continue to exist. In ACOs completely based on the quality and cost of care, the market may decide whether virtually incorporate systems can succeed in aspiration with systems where physicians are merged into large group practices. Moreover, specialist physicians are creating sensitive sized or even larger single specialized groups. However, a single specialty group cannot serve as an ACO for full patients care but can be an essential element of an ACO or can be a crucial source of medical care through referrals.In Integrated delivery systems (IDS), medical care is coordinated and reimbursed within the system to make patient care more efficient sequence improving access to and the quality of the care received. Some examples are Cleveland Clinic, heat content Ford Health System, Mayo Clinic, Scott & White Clinic, and so on. However, a late report indicates that challeng es may still remain. IDS face lack of compensation from health insurance providers for care coordination services as well as difficulties in finding specialty care, such as mental health care and changes in management and physician cultures in adopting the new organization (United States governing body Accountability Office, 2011).The promising advantages of the multispecialty group practice (MSGP) model were recognized in 1932. As stated in the Physicians Advocate(2008), These advantages include having the resources to redesign care processes, take advantage of economies of scale to implement electronic medical scans, form health care teams, obtain database feedback on accomplishance gaps, and make the changes needed to improve care (Physicians Advocate, 2008). Someevidence indicates that multispecialty group practices do make the most of recommended care management processes like electronic schooling technology, as well as manduction in quality improvement medical services. T herefore, MSGPs provide better quality care for check measures involving screening tests and diabetes management than smaller forms of practices. Moreover, studies also indicate lower Medicare outlay on patients related to multispecialty or hospital associated groups than other patients. However, it is unlikely that MSGPs will become the major organization form in the United States health care system since it is so expensive to implement.HMSO, more than 800,000 physicians that currently practice in the United States are members of hospital medical staffs (Carroll, 2011). The hospital medical staff organization can serve as ACOs for either inpatient or outpatient care. Studies indicate that most physicians have primary relationships with a single hospital to form a stronger partnership entity between physicians and their primary hospital (Fisher and et al., 2006). Hospitals have resources to support adopting electronic medical records (EMR), provide operation and accountability da ta, and assist quality improvement support for physicians. Bundled payments for specific medical conditions or episodes of sickness, such as a coronary artery bypass bribery (CABG), hip or knee replacement (Massachusetts Medical Society, 2008) will provide incentives for hospitals and physicians to work together to reduce Medicare costs (Welch, WP and ME Miller, 1994). This model will have future advantages for chronic illness treatment as well as episodes of care since physicians and hospitals work together closely to monitor patients long term care. However, the HMSOs encounter challenges including leadership of the diverse cultures of hospitals and physicians and legal restrictions to obtain sharing (Primary Care Associates., 2008).An alternative of the MSGP model is the PHO. Hospitals and physicians work together to ensure cost-effective and cool off system delivery of medical services and the provisions of the health care services to the patients. There are approximately one thousand PHOs in the United States and most are managed organizations with the goals of achieving and managing the qualityand cost of care (Nixon Peabody LLP., 2010). Under the Affordable Care Act, the contracting PHO model can emerge into an entity that will manage the quality and cost of care. Without meeting the needs of all physicians, this model has the advantage and the incentive of improving performance. With the HMSOs, the hospital will provide resources for EMR, performance reporting, quality improvement, and process management support. However, PHOs must be clinically integrated to avoid anti-trust laws (Casalino, Lawrence P., 2006).A fifth model is the Interdependent Practice Organization (IPO), which is an advancement for those physicians who practice in small organizations or who do not wish to be part of larger organizations for delivering care. The interdependent practice organization is based on an association of physicians in numerous independent practices. IPOs ar e capable of providing high quality, better care, although most of these organizations are loosely organised (Rittenhouse and et al., 2004). The future IPO model requires strong leadership, administration, and enough patients across individualistic practices to support financing of technology infrastructure and management systems. IPO models office be attractive to physicians practicing in rural areas. With given sufficient incentives, existing IPOs can became independent organizations by strengthening their management structure and maturation a solid shared culture of performance improvement. These requirements are challenges since IPOs are composed of many small practices.The last model, the Health Plan-Provider Organization or Network (HPPO/HPPN) is similar to the IPO. It is based on an association of independent physician practices. The health plan will be the major financial assets to encourage a more cost-effective health care delivery system. Many have capabilities in dis ease management, electronic instruction technology murder, and quality improvement entities that can be used effectively in collaborationism with physicians. Some physician practices may participate with health plans rather than local anesthetic hospitals. Health plans can be part of a smaller physicians practice and become the unit of accountability of performance. However, the success of this model will depend on an individual physicians leadership (Shortell and et al., 2008).The Centers for Medicare & Medicaid Services (CMS) released final rules and new opportunities for financial support for doctors, hospitals, and health care providers to work together to improve the care of Medicare patients by adopting ACOs on October 20, 2011. The new rules provide for a new voluntary Medicare Shared Savings Program. Providers will be able to participate in an ACO and share in the savings with Medicare. ACOs will reward providers for reducing the costs and meeting quality measures, such a s reducing hospital readmissions or emergency room visits. Providers will begin to share in savings based on how they perform in thirty-three quality measurements in the second and third performance years. Medicare beneficiaries will be a part of the ACO system when they form. Moreover, community health centers and Rural Health Clinics (RHCs) will be reserveed to participate in the ACO programs (Galewitz, Phil and jenny Gold., 2011).To appeal to providers, CMS will provide physician-owned and rural providers early access to the expected saving of up to $170 million dollars, so providers can start ACOs right away. At the same time, the Antitrust Division of the Department of umpire issued the entire final rules that will accept providers to participate in the Medicare Shared Savings Program. In addition, the final rules will no longer require a mandatory antitrust review for collaborations as a condition of entry into Shared Saving Program (Department of Justice, 2011). electroni c health record (EHR) usage is no longer a condition of participation to do more RHCs and other programs to join (Center for Medicare and Medicaid Innovation Center, 2011). Moreover, CMS will assist agencies in monitoring the care and quality of performance of ACOs. The program will save up to $940 million dollars over four years (U.S. Department of Health & Human Services, 2001).Patients or Medicare beneficiaries are encouraged to select an ACO as their medical center. ACOs can be used for go out-based payments, public report purposes, and claim-based payments which retrospectively throw overboard patients to join who have not adopted ACOs. This advances patients choices and encourages ACOs to coordinate their patients care to treat patients equally. Because physicians are not required to be part of ACOs, physicianscan still be paid with the Shared Saving Programs used by Medicare, Medicaid, and other commercial health plans. They also can be eligible to happen upon quality-bas ed rewards. In addition, physicians and hospitals that are part of ACOs can have both procurable rewards for improving quality and controlling costs however, there is more fatal risk. Furthermore, bundled payments for certain services and procedures, using a combination of capitation, result-based payments, and readmissions, gain sharing between physicians and hospitals that can be adopted within ACOs.Physicians also can benefit from the assistance that ACOs can provide with electronic health records and with implementation of established processes to improve quality and efficiency. Health reform will be needed in laws and regulations for the Stark law, anti-kickback statuses, fraud and abuse, anti-trusts, scope of practices, and the corporate practice of medicine. However, the final rules were relaxed and established waivers for the physicians self-referral law, the federal anti-kickback status, and certain penalties to encourage the participation in the Medicare Shared Saving Pr ogram and the Advance Payment Initiative (Fiercehealth care, 2011). Therefore, more medical providers will be regulated by the programs.In the past, healthcare leadership has relied on organizational structure to deliver higher quality at lower costs, which has not succeeded in improving neither efficiency nor performance. In fact, they have increased the problems that they intended to address. Neither diagnostic related groups (DRG) nor Health Managed Organizations created a shared achievement for all parties. Provider bread motivation lacked the pressure of medical beneficiaries to protect quality while minimizing costs. plot each DRG and resource based relative-value unit encouraged providers to focus on provision without interventions, HMOs and other managed providers encouraged providers to minimize intervention, regardless of whether managing could delay the quality or completeness of patient care (Numberof, 2011). Ignoring the minimal role that patient conduct plays in dri ving market completion among providers, the current and past medical health care system has decreased accountability for quality of medical care.ACOs were established to fix the inadequate accountability for wastefulspending and quality of patient care. The PPACA provisions are consumer based solutions however, they do not allow patients to have fully informed choices about their coverage and medical care (Numberof, 2011). Employers, who contract with insurers, apply with providers therefore, accomplishment is limited. However, many physicians are reluctant to carry accountability for patient outcomes, since they admit that outcome is directly under the behavioural control of the patient. Furthermore, it seems that provider contracts could be integrated to a successful ACO in a shared savings program providers continue to receive supporting for each service they perform.Even with the possibility of a bonus from shared-savings, maintaining the FFS system boosts providers into conti nuing delivering an excess of services. In addition, ACOs, which are a single unseasoned model, are largely hospital based. Eligibility requirements are larger and more tough for ACO organizations. Larger organizations are able to consolidate their markets however, this consolidation may result in less competition. Therefore, large delivery organizations may become too big to fail but will increase advantages for patients. Without competition, the organizations might have little incentive to reduce the costs or improve quality of medical care.Enduring health reform has to cover the uninsured without expulsion or conditions. As Victor Fuchs, professor at Stanford University mentions It Enduring health reform must improve efficiency in medical practice by providing physicians with the information, infrastructure, and incentive they need to deliver cost effective care (Fuchs, 2010). Information will come from the electronic health records, a process that will be amped up by the HITE CH Act, which is part of the American Recovery and Reinvestment Act of 2009 (Leyva, Carlos and Deborah Leyva, 2009). Electronic health records will benefit providers with more accurate real-time data on patients as well as provide analyses on drug responses and provide support to improve the quality of medical care. Health information Exchange (HIE) can enhance information from a wide databases and allow that information to be shared through various technology by providers. This allows related patient information to be shared within EMR with the provider who needs that information (Southern New Hampshire Health System, 2011).Furthermore, thePatients Centered Outcomes Research implant (PCORI) will offer physicians and patients new information of varied medical technology. Atul Grover, psyche advocacy officer for the Association of American Medical Colleges, notes It will be an evidence synthesis that really considers different populations and different diseases and tries to get mor e information to clinicians as they go about doing their daily work (Marathon Medical Communications, Inc, 2010). The integration of the PCORI will enhance information so that physicians and patients can acquire the appropriate test and treatment based on the patients condition. Moreover, infrastructure reform will enhance horizontal collocation within providers and monitor patients consistently.Health care reform strengthens greater integration through the redesign of delivery systems such as medical homes and ACOs for physicians. Recent studies suggest that better coordination of care can reduce readmission rates for major chronic sicknesses (Hernandez, AF, 2011). In addition, the PPACA will give incentives for hospitals to support proven practices that essentially reduce their rates (Foster, 2010). Likewise, the PPACAs pilot program involving bundling payments will bring physicians and hospitals an incentive to allocate care for patients with chronic illnesses.Most essentially, PPACA admits that health reform that brings ACOs as the delivery system is an ongoing process requiring continuous adjustment. The PCORI will develop new medical tests, drugs, and other treatment that will provide continuously updated information for physicians and patients. Over the next decade, similarly, the Innovation Center in the Centers for Medicare and Medicaid will be establishing and evaluating new policies and programs that will enhance the quality of care for Medicare beneficiaries and reduce costs.PPACA not only will expand health care coverage to millions of Americans but also will enact many policies to reduce the amount of costs for health care by bringing ACOs as the delivery system, which will reduce the costs of health care over time. By enacting ACOs as a Primary Care Provider (PCP), PPACA provides the most effective medical care support possible. Moreover, by adopting the bundled payment approach, physicians, hospitals, and other providers will be able to reduce the costs for Medicare beneficiaries.Therefore, the public should embrace the new health care proposal to reduce their costs and improve the quality of their medical care.ReferencesBecker, Epstein & Green, P.C (2011) HEALTH REFORM CMS Innovation Center Announces Four Models in Bundled Payments for Care Improvement Initiative, Retrieved from http//www.ebglaw.com/showclientalert.aspx?Show=14876 Carroll, Aaron. (2011, June 3). Meme-busting Doctors are all leaving Canada to practice in the U.S., Retrieved from http//www.washingtonpost.com/blogs/ezra-klein/post/meme-busting-doctors-are-all-leaving-canada-to-practice-in-the-us/2011/06/03/AGVdAuHH_blog.html Casalino, Lawrence P. 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