2014 December Affiliate Practice

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DECEMBER 2014

Compensation Changes Loom for Primary Care Physicians Choosing the Right Path for Your Practice New ACO Rules Would Delay Penalties An Extra Three Years


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C O N T E N T S

Compensation Changes Loom for Primary Care Physicians

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CONTENTS

6

CMS Finalizes Changes to Medicare Enrollment Rules

8

Choosing the Right Path for Your Practice, Considering the Risks, Rewards and Benefits of Your Practice’s Business Model

10

New ACO Rules Would Delay Penalties An Extra Three Years

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CMS Releases New Proposal to Improve Accountable Care Organizations

12

The Human Touch of Telemedicine: A Primer on Secure, Reliable, Patient-Centric Telemedicine Solutions

15

89 ACOs will join Medicare Shared Savings Program in January

16

United Healthcare, MD Anderson Deal May Spur More Bundled Payments in Cancer

17

HHS Will Push Broader Reach for Information Technology

18

McKesson Appoints Harris as Executive Director of ACO Services

4 Affiliated Practice


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Cover Story

Compensation Changes Loom for Primary Care Physicians By Ari Burd Giordano, Halleran and Ciesla

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eginning January 1, 2015, a significant cut in physician fees for primary care services will go into effect. Estimates suggest that fee reductions will average approximately 40%, but could be even greater in New Jersey where Medicaid has expanded under the Affordable Care Act. The Affordable Care Act had temporarily increased federal Medicaid funding to physicians to match Medicare payment levels back in 2013. That temporary increase was limited to two years and is set to end in 2015. It was put in place to encourage physicians to see more Medicaid patients at a time when Medicaid patient rolls were vastly expanding. Presently, there is no sign that the increase will be extended before the cut goes into effect. The most recent fix which prevented a major cut to Medicare payments is scheduled to expire on March 31, 2015. It is assumed that Congress will review the cut in physician fees at that time as well. This could provide an opportunity for Congress to extend the temporary increase in Medicaid funding at that time. At the same time physician fess will be potentially cut, physicians will have the opportunity to make up some of that lost revenue by receiving monthly fees for providing care coordination of patients with two or more chronic conditions like diabetes and heart disease. Care coordination typically involves assessing a patient’s care coordination needs, exchanging information amongst care givers, monitoring and adjusting care and evaluating outcomes. While doctors traditionally performed these services, previously they were not paid for them. According to the Department of Health and Senior Services, twothirds of Medicare beneficiaries have at least two chronic conditions. As a result, payments for coordinating the needs of these patients have the potential to be a significant new income stream for physicians. Presently, it is expected physicians will receive about $42 a month for managing the care of a Medicare patients. Practices would be required to use a certified electronic health record (EHR), provide 24-hour access to staff, appoint a designated clinician for each patient, and coordinate care among hospitals, specialists, er providers. The new payments are for non-face-to-face services. These services can be provided by doctors, nurse practitioners, physician assistances and other health professionals. Medicare indicates that it expects doctors will focus on the sickest patients, generally those with four or more chronic conditions. 6 Affiliated Practice

CMS Finalizes Changes to Medicare Enrollment Rules By Beth Christian Giordano, Halleran & Ciesla

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n December 3, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule concerning provider enrollment or re-enrollment in Medicare.The final rule will give CMS the ability to deny or revoke the enrollment of entities and individuals that pose a program integrity risk to Medicare, including those that have a managing employee that has been convicted of certain crimes. In addition, CMS will have the ability to deny Medicare enrollment of providers, suppliers, and owners affiliated with an entity that has unpaid Medicare debt. Providers and suppliers may have their Medicare enrollment revoked if (i) the provider or supplier demonstrates a “pattern and practice” of submitting claims that fail to meet Medicare requirements or (ii) the provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service. CMS is also making the effective date of Medicare enrollment uniform for all provider and supplier types. Providers and suppliers will only be able to submit claims for services rendered as of the filing date of their enrollment application or the date of first furnishing services at a new practice location, whichever is later.


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Choosing the Right Path for Your Practice; Considering the Risks, Rewards and Benefits of Your Practice’s Business Model By Ruth Harris Executive Director, ACO Services-McKesson Business Performance Services

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ith healthcare is in the throes of change. I am continually having conversations with physicians who are faced with making a decision about the future of their practice. Unlike any time before in our healthcare system, physicians have the opportunity to engage in innovative care delivery models -models that offer fair compensation to our providers, reduction of costs to our healthcare system, and efficiency and quality of care to our patients. The success of organized groups hinges on the ability to keep the patient out of highcost settings while maintaining a high quality of care. These models create new incentives, pushing a degree of financial responsibility onto the physician with the intention to reduce costs for both the payers and system alike.

Barraged with offers and conversations, physicians are being targeted by hospitals and medical groups, who are seeking to increase participation within their organizations. Physicians are now faced with the difficult and burdensome task of choosing a model of transformation that allows their practice to continue offering quality of care, while simultaneously maintaining financial stability in an ever-changing marketplace. These new care models, which demonstrate quality and care efficiencies, represent new forms of healthcare delivery and are referred to as Integrated Care Delivery Systems. The Integrated Care Delivery model’s primary focus is on preventable care. These systems come in a variety of structures, creating difficulty in choosing the most appropriate solution.

What are my choices? “So many options, so little time for me to explore the answers” seems to be a common statement from independent practice leaders. To start, consideration should be given to determine the value of remaining an autonomous practice versus the benefits and support of an organization, which can bring knowledge of delivery systems and established practices to your group. It is important to remember, disruption in your system creates innovation, which in turn creates new models of care that should be explored by all physicians and providers.

Accountable tions

Care

Organiza-

ACOs continue to garner increasing attention. The Centers for Medicare and Medicaid Services established the ACO initiative, which tasks physicians with improving the quality of care for patients, while lowering the absolute cost. Payers and providers share responsibility in providing quality, decreasing costs, and consequently sharing in the financial savings. ACOs are clinically integrated networks, which share savings with the payer through improved quality of care and reduction of cost. ACOs come in many sizes and shapes. If you have determined that an ACO is a care delivery model that you want to participate in, be sure to explore different ACO models. Do you want to join a hospital-run ACO, which could involve the merging or acquisition of your practice with the hospital; or a physicianlead ACO, which allows you to remain

independent, and shares savings through new negotiated contracts? The latter stated models are merely examples of a plethora of options, which all have debatable pros and cons. Joining any ACO model will also require the transformation of your practice. The reporting requirements and care delivery model must be considered. If you already are a PCMH and have achieved success in Meaningful Use of an EMR, the transformation should come easier for you. However, you must be aware that in any model, the change will take willingness and dedication in managing your practice in order to meet the expectations defined by ACO leadership. Donald M. Berwick, former administrator for CMS, stated, “(An) ACO will work because it is set up to reward the right combination of goals for our time: transparency, coordination, consumer power, and intolerance of waste.” Berwick also noted that failure of ACOs was most often attributed to lack of capital and the shortage of staff to support the infrastructure of the ACO. An underfunded ACO will continually struggle to solvency. ACO’s without the alignment of a supporting management team have had difficulty in meeting both quality benchmarks and generating shared savings, both essential to the sustainability of a model. In short, capital, solid infrastructure and dedication are required to make the model successful for patients, providers and payers.

IPA, MSO, PHO Independent Physician Associations (IPA), Managed Service Organizations — cont’d

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(MSO), and Physician Hospital Organizations (PHO) are alternative options that often provide support through contracts, technology, products and staff, to relieve physicians of many of the burdens associated with running a practice. These organizations can provide health delivery systems, contract negotiations, education and joint risksharing, while promoting collaboration among physicians. Organizations such as these may be less restrictive than the ACO model for physicians, but often are fragmented and lack the momentum to offer significant benefits to each practice. But like ACOs, infrastructure and financial support are critical to the success of these alternative organizations. These organizations are often attractive to payers, and therefore can create lucrative value-based contracts, while also allowing a degree of autonomy within the individual practices. Independent physicians are able to develop a collaborative position with payers, which leads to innovative agreements, creating success for the practice, and reduced costs for the payers.

Super groups Single or multi-specialty groups have also begun to emerge. These groups range from 15 plus providers, with varying geographic ranges. These practices, which in the past may have competed against each other, are now forming homogenous groups, sharing operating structures, and creating significant market presence that competes with larger organized institutions. These super groups have financial benefits due to both their size and leverage with payers, hospitals and vendors; additionally, many super groups have been successful in developing new revenue streams through the inclusion of ancillary services. Super Groups and other Physician Associations offer providers the ability to remain autonomous while receiving the benefits of a larger group. Joining one of the latter stated groups brings unique advantages as well as risks to a practice. For example, participation in these groups may require re-credentialing to a common tax identification number for billing purposes. Credentialing can be an arduous and laborious task, creat-

ing the possibility of larger issues if the group disassembles, requiring the unwinding and identification of provider numbers to regain billing and financial independence. This process can have significant impact on revenue if not done in a proper and timely manner. Lastly, organizational structure must be considered. Questions such as, will physicians be compensated less, will there be higher overhead costs created by new technology and initiatives, or will there be transparency in reporting, are all valid points to consider during the decision-making process. Additional questions should be asked contingent upon whether the Super Group is a complete merger or a division model. (This model allows a group to keep control over some parts of a practice, such as staffing or billing.) And in all cases, professional advice should accompany any decision to participate.

Triple Aim The Triple Aim is an approach designed by The Institute for Healthcare Improvement. The Triple AIM has three critical objectives: • Improve the patient experience of care • Improve the health of populations • Reduce the per capita cost of health care The Triple Aim design should be considered when evaluating the mission and strategic plan for any group. The Institute for Healthcare Improvement states, “Organizations that attain the Triple Aim will have healthier populations, in part because of new designs that better identify problems and solutions further upstream and outside of acute health care.” Strategic alignment with the Triple Aim ultimately will provide healthcare solutions that will support collaborative efforts with other providers, provide measurable results for contract negotiations and support better health for the communities involved.

Evaluate Whichever path a provider may choose, it’s important that the outcome should be to improve care while reducing costs. High quality healthcare

outcomes while reducing healthcare costs will inevitably produce financial benefits for any group; sustainability will hinge upon proper infrastructure and excellent leadership. Evaluation of exit strategies, your ability to achieve success in the group’s reimbursement models, and financial and managerial support, is imperative before entering into any group. • With any group a physician may choose the following should be considered: • Does the group have strong leaders who will motivate the participants, or are the participants weak, leaving some providers to carry the burden of others? (Highly motivated physician leaders will create success.) • How long will it take to realize a financial benefit? • Is this model sustainable? Due diligence of all aspects is required, including the costs associated with both the transformation of your practice and integration of care. • Do you have an exit strategy with a termination clause included in your contract, ideally affording you flexibility and choice? • Did you explore existing payer contracts that the group may have? Will you be successful in these arrangements? (i.e., compare the cost per member/patient to the practice, with the monthly payment per member/ patient.) In conclusion, integrated care management focusing on preventive care will be the primary goal for future contracts. Practices should be prepared to shift from volume-based reimbursements to value-based reimbursements and to — cont’d

December 2014 9


embrace new tools and technology for clinical integration of care, population health management, and quality benchmarking, which in turn will support evidence-based clinical care design. Lastly, remember that data and the ability to evaluate improvements are critical to success in this new healthcare marketplace. As our healthcare system continues to evolve and develop new models of care, so will the options for physicians. Providers will always be unsure of what the future holds, but the need for change is certain. The only question left to ask is which option is best for you? Ruth Harris is the executive director, ACO Services, at McKesson Business Performance Services. She may be reached at Ruth.Harris@McKesson.com.

New ACO Rules Would Delay Penalties An Extra Three Years By Jordan Rau

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ealth care systems experimenting with a new way of being paid by Medicare would have three extra years before they could be punished for poor performance, the federal government proposed Monday.

The proposal is one of dozens of changes that the Centers for Medicare & Medicaid Services wants to make to rules governing accountable care organizations. ACOs are affiliations of doctors, hospitals and other providers that jointly care for Medicare patients with the goal of pocketing a portion of what they save the government. Those that spend above Medicare estimates stand to lose money. There are more than 330 such networks around the country caring for about 5 million people through the Medicare Shared Savings Program, which includes most of the ACOs. The revisions to the program are intended to entice providers to form new ACOs and to keep existing ones in the program, which is voluntary. In the first year of the program, 118 ACOs saved Medicare $705 million with about half earning bonuses, government records show. Another 102 ACOs spent more than Medicare’s benchmark, but only one had to repay Medicare because most ACOs have a three-year grace period when they can earn bonuses but are excused from penalties. The new rule would give ACOs, both new and existing ones, an extra three years before they faced penalties, for a total of six years. Sean Cavanaugh, Medicare’s director, said the change was one of many prompted by concerns raised by ACOs. “The notion that 36 months later you’re going to be at downside financial risk is pretty intimidating,” he said in an interview. 10 Affiliated Practice

However, the extra time would come at a price: ACOs that after their first three years decide to avoid penalties for the next three could keep no more than 40 percent of the money they save Medicare, rather than the 50 percent maximum they can keep during their first three years. This KHN story can be republished for free (details). The government also proposed creating a new type of ACO for providers that want a chance to earn the biggest savings while also being at risk for repaying the most money if they fell short. Many of those ACOs are now in the so-called Pioneer ACO Model, which ends after 2016. Medicare proposed that those ACOs could move over to the new program, which has similar rules. The new model, known as “Track Three,” would allow ACOs to keep up to 75 percent of the money they save Medicare. If they cost Medicare extra, those ACOs would be held responsible for up to 15 percent of the excess spending. Currently ACOs cannot be held responsible for more than 10 percent. The government is also soliciting views on alternative ways of deciding whether an ACO has saved Medicare money. Currently, Medicare estimates what the participants of the ACO spent in the past and uses that as a benchmark. Some ACOs have complained that providers that are already practicing efficiently are having a harder time producing savings than less efficient ones. Under one option, ACO spending would be compared to the average spent by other doctors and hospitals in the region that are not part of an ACO. The public has until Feb. 6 to comment on the proposed rule.


CMS releases new proposal to improve Accountable Care Organizations Shared Savings Program Proposed Rule reflects focus on primary care and improved incentives for participation, quality, and efficiency

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he Centers for Medicare & Medicaid Services (CMS) today released a proposal to strengthen the Shared Savings Program for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and promoting transitions to performance-based risk arrangements. The proposed rule reflects input from program participants, experts, consumer groups, and the stakeholder community at large. CMS is seeking to continue this important dialogue to ensure that the Medicare Shared Savings Program ACOs are successful in providing seniors and people with disabilities with better care at lower costs. CMS Administrator Marilyn Tavenner said, “This proposed rule is part of our continued commitment to rewarding value and care coordination – rather than volume and care duplication. We look forward to partnering with providers and stakeholders to continuously refine and improve the Medicare Shared Savings program.” Through the Affordable Care Act, ACOs encourage doctors, hospitals and other health care providers to work together to better coordinate care when people are sick and keep people healthy, which helps to reduce growth in health care costs and improve outcomes. ACOs become eligible to share savings with Medicare when they deliver that care more efficiently while meeting or exceeding performance benchmarks for quality of care. The Shared Savings Program now includes more than 330 ACOs in 47 states, providing care to more than 4.9 million beneficiaries in Medicare fee for service. Recently, CMS announced first year Shared Savings Program (SSP) results: • 58 SSP ACOs held spending below their benchmarks by a total of $705 million and earned shared savings payments of more than $315 million. • Another 60 ACOs had expenditures below their benchmark, but not by a sufficient amount to earn shared savings. Other Affordable Care Act initiatives to improve care and reduce costs have helped reduce hospital readmissions in Medicare by nearly 10 percent between 2007 and 2013 –

translating into 150,000 fewer readmissions – and quality improvements have resulted in saving 15,000 lives and $4 billion in health spending during 2011 and 2012. CMS is seeking comment on a number of adjustments to improve the Medicare Shared Savings Program, including: • Providing more flexibility for ACOs seeking to renew their participation in the Program. Many ACOs elect to enter the Program under a one-sided risk model, where the organization participates in shared savings with the Medicare program, but does not take on additional performancebased risk. More experienced ACOs that are ready to share in financial losses in return for the opportunity for a higher share of savings may elect to enter a two-sided model. CMS is proposing to give ACOs the option of a longer lead time to transition to a two-sided performance risk model after their first agreement period. ACOs would have the opportunity to renew under the one-sided model for one additional agreement period. ACOs that enter the Shared Savings Program under the two-sided performance risk model would see no change. • Encouraging ACOs to take on greater performancebased risk and reward. CMS is proposing to create a new two-sided risk model, called “track 3,” which integrates some elements from the Pioneer ACO model, such as higher rates of shared savings and prospective attribution of beneficiaries - a list of assigned beneficiaries provided at the start of the performance year, and no further beneficiaries will be added to the list during the performance year. We are seeking comments on a number of care coordination tools that would make two-sided performance risk models more attractive to ACOs such as expanded use of telehealth, beneficiary attestation, and more flexibility around postacute care referrals to help ACOs better coordinate care for beneficiaries using these services. These tools could all help encourage participating providers to improve quality and care coordination for Medicare beneficiaries, which in turn would result in better patient experiences and greater shared savings for both the ACO and the Medicare program. — cont’d

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• Emphasis on primary care. CMS proposes to refine the way Medicare beneficiaries are assigned to an ACO to place greater emphasis on primary care services delivered by nurse practitioners, physician assistants and clinical nurse specialists and to allow certain specialists not associated with primary care to participate in multiple ACOs. • Alternative methodologies for benchmarks. CMS seeks comment on alternative methodologies that would make ACO benchmarks for determining shared savings and losses gradually more independent of the ACO’s past performance and more dependent on the ACO’s success in being more cost efficient relative to its local market. For example, we are considering whether shared savings received by an ACO should be added back to the benchmark in future performance periods. • Streamlining data sharing and reducing administrative burden. CMS proposes to streamline the process for ACOs to access beneficiary claims data necessary for health care operations such as quality improvement activities and care coordination while retaining the opportunity for beneficiaries to decline to have their claims data shared with the ACO.

The human touch of telemedicine: A primer on secure, reliable, patientcentric telemedicine solutions By Guy Henggeler, and Bobby Park, MD

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he global telemedicine field is growing dramatically every year, with an increasing array of solutions to meet the needs of providers and patients alike. A study entitled “Global Telemedicine Market Outlook to 2018” noted that the telemedicine industry, which stood at $ 14.2 billion in 2012, is expected to grow at a compound annual growth rate of 18.5 percent from 2012-2018. From a regulatory standpoint, this expansion will intensify as telemedicine initiatives align with the goals of the federal government and Accountable Care Organizations (ACOs) to reduce healthcare expenses and improve quality of care to patients. All this is further impacted as millions of potential new patients access the exchange system legislated by the Affordable Care Act (ACA).

Finding the right solution for your healthcare organization can be daunting, given the unique needs of your practice and patients and the complexity of the technology, not to mention licensing, regulatory and reimbursement issues. How then do caregivers find a reliable, secure telemedicine platform that can be flexible and utilized in a variety of healthcare settings? And, given 12 Affiliated Practice

that the cornerstone of care is human connectivity, is it possible to maintain a personal touch with patients while utilizing what is perceived as impersonal technology? As the global telemedicine field grows, how can we create an experience that incorporates flexible, secure technology that also offers good bedside manners?

Telemedicine Evolves Telemedicine provides patients with immediate access to cost-effective, efficient and speedy care. Whether used to manage chronic illnesses, monitor patient conditions in areas where specialty care is not available, or triage victims in an emergency situation, telemedicine applications provide significant advantages for patients and providers alike. Research shows that the field is poised for impressive expansion, and at the same time consumer trust in telemedicine is gaining traction too. According to new research by Deloitte, 75 million – or one in six– “virtual” doctor visits will occur this year alone. Cisco’s 2013 Customer Care Experience Report for Healthcare noted that 76 percent of patients select virtual access over human interaction with their care provider because it saves

them time – both traveling to and from an appointment, and missing work. In addition, virtual access also allows for diagnosis and treatment when face-toface care is geographically challenging in rural areas. Given the anticipated growth, and the proliferation of telemedicine platforms from which to choose, there are a number of factors that healthcare organizations must consider carefully when reviewing these solutions.

Security in a Mobile World When physicians’ forward medical records from their tablets or patient insurance data is accessed from a smartphone, this confidential information can be intercepted and compromised. A telemedicine system that incorporates security measures such as unique user passwords, encrypted data and secure patient records storage is key to preventing a data breach. he rise of Bring Your Own Device (BYOD) has increased these risks significantly, since physicians are using their own mobile devices for both work and personal purposes. In fact, Cisco’s study cites that 9 in 10 Americans em— cont’d


ployed in the healthcare industry use their personal smartphones for work, and 40 percent of those mobile devices are not password protected. In a 2012 Comscore Study, 60 percent of physicians reported using mobile phones on a daily basis, with 62 percent of those users indicating they need their device to stay in contact with their job. Tablet use, too, is on the rise, with 44 percent of surveyed physicians reporting that they used tablets every day. Mobile communication proliferates in the medical field, yet realistically there is a large segment of healthcare providers that are not prepared to manage it properly for patient care. As physicians, it is incumbent upon us to be fully aware of these issues and focus on selecting technology that ensures protection of patient health information and patient privacy. In short, patient privacy requires security.

Military Grade Security = Patient Privacy To ensure patient privacy, some developers of telehealth platforms are leveraging military-grade mobile security solutions. Overcoming the challenges posed by smartphones and tablets requires a comprehensive security strategy and knowhow, as well as a clear understanding of the security tools within the telemedicine platform. Essentially this means digging deep into the technology underpinnings, an undertaking that most physicians and hospital administrators do not have the desire, time or skill set to do. A key component to a secure telehealth platform is ensuring that security extends past the device itself into encryption of the information being transmitted over unsecured networks. Security is vital to maintaining patient confidentiality and required by the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. When considering a mobile solution to support telemedicine initiatives, an offering should: - Utilize HIPAA-compliant messaging, voice and file transfer, and information storage, which enable physicians to consult securely with patients. Patient

information must be stored in secure data centers that regularly conduct risk assessments and have policies in place for reviewing controls. - Integrate with existing communication systems, such as email, SMS, applications and pagers, as well as mobile phones and tablets. - Securely distribute and access sensitive information from a mobile device; transmit media over industry-standard 256-bit Secure Socket Layer (SSL) encrypted connections; and prevent access by unauthorized users or noncompliant devices. - Leverage unique user identities, including user names and passwords; and authenticated and role-based access at both the physical and IT level. Uncovering the Human Touch of Telemedicine Another major challenge that telemedicine offerings must address is the perceived lack of personal connection with mobile interactions. Many offerings, perhaps, miss key ingredients that physicians require to provide effective care. How do health practitioners work within the virtual environment to ensure that their bedside manners remain warm and personal? Step one is recognizing that in the online environment, personal interaction must take on a new meaning within the medium. Telemedicine applications take advantage of innovation by facilitating faster, more efficient connections between patients and medical providers. Practitioners and caregivers must focus on the notion that telemedicine applications can actually help them achieve a more personalized patient experience with a tailor-made solution. Step two is seeking a vendor that truly understands physician needs. This is deceptively simple advice but decidedly difficult to find. Telemedicine vendors are IT folks, not medical providers. To ensure that physicians can provide the same personal touch whether in person or via telemedicine solutions, medical practices need to consider a technology partner that can work synergistically and truly understand requirements. Collaborating with a vendor initially is an excellent way to ensure a high qual-

ity, reliable telemedicine platform that delivers personalized and compassionate care. From a physician’s perspective, a patient-centric system that promotes the “human touch” through technology should include: - Mobile and web access to medical services anytime, anywhere and on any network-connected device. - A simple user interface that does not intimidate patients or physicians alike. - A robust yet flexible platform that can be configured for either home monitoring, direct patient-provider interaction, or a hub and spoke model. - An inclusive platform, in this age of population health, that allows various physician groups to pool provider resources and toolsets so that clinicians can view various on-call rosters and manage patient volume. - Picture upload capabilities to allow patients to securely share high-definition images of their medical issues, such as a bite or rash, using a mobile device or web app. - A simple electronic medical record (EMR) system to allow doctors to see patients’ records, and enables patients to produce an invoice for insurance claims. - Multilingual patient care agents to assist patients with the consultation queue and provide additional support.

Conclusion With the growth of the telemedicine industry, the opportunity is ripe for caregivers and providers to offer patients highly personalized quality care within a secure, reliable platform. The key is to find a solution that marries secure and scalable solutions; government-grade, locked-down security; innovative functionality that can scale and grow; and a patient-centric approach that delivers on the promise of technology without losing the human touch. In our increasingly connected world, it is imperative that the medical community remains at the forefront of change in order to continue to offer the highest quality care to new and existing patients.

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14 Affiliated Practice


89 ACOs will join Medicare Shared Savings Program in January By Melanie Evans

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ne of Medicare’s largest attempts to overhaul how hospitals and doctors are paid will expand in January even as federal officials acknowledge the need to modify the program to sustain the interest.

The Medicare Shared Savings Program—a broad test of accountable care launched in 2012 under the health reform law— will add another 89 organizations in January. The additions will bring the total number of organizations in the program to 405 and help boost the number of Medicare enrollees who get care from doctors in ACOs to 7.2 million from 4.9 million. Sean Cavanaugh, director of the CMS’ Center for Medicare, said in an interview that he viewed the growth as a sign of healthcare providers’ interest in new incentives for quality and efficiency. ACOs already in the program have also added more doctors. “We’re very excited,” he said. But the program has met with some criticism from hospitals and doctors who say its rules have limited their efforts to manage the cost and quality of care, the two measures used to determine financial incentives. The Shared Savings Program ties the financial incentives to the organization’s performance on quality targets. ACOs that succeed keep a share of their savings. After the first three years, they must also pay penalties if they fail to save money. Under an optional track, participants assume the risk of penalties in the first three years in exchange for a larger potential bonus. Only five of the current participants chose that option, and none of the 89 starting in January did so. More than 200 organizations will decide soon whether to continue in the Shared Savings Program as their initial contracts expire at the end of 2015. In an effort to prevent organizations from making an exit, the CMS and its Innovation Center recently introduced and proposed changes to Medicare’s accountable care initiatives with the hope of maintaining its rapid early expansion. Earlier this month, the CMS proposed new rules that would allow ACOs to avoid the risk of penalties for up to six years instead of three years. The CMS also asked ACOs how best to change the formula used to calculate how much ACOs save Medicare and what amount they may keep. And in October, the CMS proposed a new vehicle to help ACOs with capital investments to begin in 2016. Cavanaugh said he hopes proposed changes will help “solidify growth” of the program, which officials would like to see as a permanent feature under Medicare. “We’re in this for the long haul,” he said. “This is not a quick hit to get some savings and run.” Early ACOs have reported quality improvement, which benefits Medicare enrollees, Cavanaugh said. And greater savings will come in time as new ACOs gain experience with quality improvement and cost-control initiatives that will deliver results. The first Medicare ACOs have produced uneven results so far. ACOs that began in 2012 and 2013 outscored other providers on 17 of 22 measures of quality. Of those 220 ACOs, however, just 1 out of 4 slowed the cost of care enough to earn bonuses. Medicare saved $417 million and the ACOs shared another $300 million. Quality performance among ACOs that earned incentive payouts was mixed. But the sustained growth may come at the expense of the program’s goals: greater accountability. The longer period under one-sided risk could allow some participants to take advantage of the program to consolidate markets without delivering savings, experts warn. December 2014 15


UnitedHealthcare, MD Anderson deal may spur more bundled payments in cancer By Bob Herman

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wo major players in the private sector have launched a fixedpayment structure for cancer care that could serve as a harbinger of more such arrangements as the appetite for such payment reforms continues to grow across the industry. UnitedHealthcare, a subsidiary of UnitedHealth Group, and the University of Texas MD Anderson Cancer Center in Houston agreed to a three-year deal in which the insurer will pay MD Anderson a fixed rate for the care of up to 150 patients with certain types of head and neck cancer. “There’s so much interest in this,” said Kimberly Crow Hartsfield, a senior manager at consulting firm the Camden Group. “There’s so much spend in oncology and so much variation in the care delivery that takes place.” The pilot program is part of UnitedHealthcare’s concerted push toward more value-based payment mechanisms. The insurer has about $36 billion in annual provider payments tied to some kind of risk-based arrangement. “Our partnership with MD Anderson Cancer Center marks an important step toward expanded bundled-care payment models and away from the traditional fee-for-service payments for oncology care,” said Dr. Lee Newcomer, UnitedHealthcare’s vice president of oncology services, in a statement. Bundled payments have been an important financing reform under the Patient Protection and Affordable Care Act. Medicare’s Bundled Payments for Care Improvement program has shown widespread interest among providers. Private insurers like Aetna and Blue Cross and Blue Shield plans also have created bundled-payment arrangements with hospitals. Even large self-insured employers like General Electric Co. have direct bundled-payment contracts with providers. However, Medicare does not yet have any bundled payments for cancer care. And most arrangements with private insurers involve only orthopedic or cardiovascular proce16 Affiliated Practice

dures, since those service lines tend to have higher volumes and more fixed costs. But Humana and 21st Century Oncology have a bundledpayment agreement for radiation therapy services. Horizon Blue Cross Blue Shield of New Jersey also has a fixed, episodic payment deal with a regional cancer practice for breast cancer patients, which started this past October. “We’re going to see more and more of what we see as condition-based bundles as opposed to the procedure-based ones,” said Francois de Brantes, executive director of the Health Care Incentives Improvement Institute who has studied the issue. “You look at where payers spend their money, and it’s in far longer timeframe episodes,” like those involving chronic conditions. UnitedHealthcare officials said they want more bundled payments for cancer care because that field and its related drug costs represent 11% of its commercial health-plan spending. Only patients with employer-sponsored health plans will be enrolled in the MD Anderson program. Officials think large savings can be attained with more standardized cancer care. The insurer released a study this summer that showed fixed payments for 810 patients with breast, lung and colon cancers saved more than $33 million over three years. “This was a pretty dramatic change,” Newcomer said at the time. With 1.6 million people diagnosed with cancer in the United States every year, half of whom are Medicare patients, the industry also sees potential in bundled payments if it leads to better quality. Medicare is developing an oncology-care model (PDF) that would pay providers for episodes of cancer care. “You’re going to see continued expansion,” said Hartsfield, who previously led the informatics and analytics division at Arkansas Blue Cross and Blue Shield. “I think that all payers in general are interested in progressive physician and hospital groups that are looking to eliminate the variation and provide very patient-centric care.”


HHS will push broader reach for information technology By Joseph Conn

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he Office of the National Coordinator for Health Information Technology has adopted a new strategic plan that seeks to keep up the momentum of health IT adoption while taking steps to improve the penetration of information technology beyond hospitals and physician practices. Under the American Recovery and Reinvestment Act’s electronic healthrecord incentive payment program, which has paid out nearly $25.8 billion since 2011, 94% of eligible hospitals and 79% of eligible physicians have received payment for either purchasing or meaningfully using a tested and certified EHR. But the program left gaps by not extending payments to behavioral health, long-term care and other providers, said Dr. Karen DeSalvo, head of the ONC. The ONC and other federal agencies are looking at ways to help these excluded providers cover the cost of buying EHRs. The new plan calls for “emphasizing assistance for healthcare providers serving long-term and post-acute care, behavioral health, community-based, and other populations ineligible to participate in the Medicare and Medicaid EHR incentives.” “Where I’d like the country to be is where Vermont is,” DeSalvo said, where almost all behavioral health providers in the state are connected to health information exchanges used by general-care hospitals and physicians.

Protecting the privacy and security of health information was one of the plan’s objectives under the goal of secure interoperability. Behavioral health information presents a particularly

gnarly problem for general-care providers because much of it is covered under a separate federal privacy law more stringent than the Health Insurance Portability and Accountability Act privacy rules.

the capabilities for health information involving substance abuse or mental health treatment, DeSalvo said. “We’ve heard a lot for questions from consumers and privacy (advocates)” about that, she said.

The latest federal strategic plan calls for “the development of policy, standards and technology to facilitate patients’ ability to control the disclosure of specific information that is considered by many to be sensitive in nature (such as information related to substance abuse treatment, reproductive health, mental health or HIV.)”

The 28-page Federal Health IT Strategic Plan (PDF) covers the years 2015 to 2020 and is an update of an earlier five-year plan released by the ONC in 2011.

A strategy to achieve that goal would be “to require and test that certified health IT products incorporate privacy and security standards,” it said. Currently, software systems to record patient consent and control the flow of their medical records to others are available, but those functions are not required under the testing and certification criteria of the federal EHR incentive payment program. In June, a privacy and security workgroup that makes recommendations to an ONC advisory panel suggested the ONC should only take “baby steps” and embrace voluntary testing and certification requirements for such privacy protecting technologies—known as data segmentation for privacy, or DS4P. The ONC has worked with private sector EHR developers, the standards development organization Health Level Seven, and the Substance Abuse and Mental Health Services Administration at HHS on developing and pilot testing the data segmentation technologies. ONC is looking at ways it could support

The ONC is mandated to provide periodic, long-range national health IT plans by the American Recovery and Reinvestment Act of 2009, which created the federal incentive payment program for the adoption of EHRs. DeSalvo said more than 35 federal agencies, including the federal government’s own healthcare delivery giants, the Defense Department’s Military Health System and the Veterans Affairs Department’s Veterans Health Administration, participated in drafting the plan, which for many of the federal agencies, includes three-year and sixyear outcomes milestones. The strategic plan includes 14 objectives under five broad goals: expanding the adoption of health IT, advancing secure and interoperable health information, strengthening healthcare delivery, advancing the health and wellbeing of individuals and communities, and advancing research, scientific knowledge and innovation. Promoting health information exchange is the subject of its own detailed federal interoperability plan expected to be released by the ONC early next year. The ONC’s strategic plan is open for public comment through Feb. 6. December 2014 17


McKesson Appoints Harris as Executive Director of ACO Services R

uth Harris has recently joined McKesson Business Performance Services, a division of McKesson Corporation, as Executive Director, ACO Services. In her role, Harris is the principal liaison between the Accountable Care Organization (ACO), physician groups and payers. Through her leadership she is responsible for providing administrative leadership and management of the ACO.

Harris is an accomplished healthcare professional with a bachelor degree in criminal law and is a medical billing and coding member of the American Academy of Professional Coders. She also holds certifications with Health Care Compliance Association, and Fraud and Abuse Compliance.

Harris brings extensive experience in medical practice management with expertise in revenue cycle and operations management, regulatory compliance, human resource management, managed care contracting, electronic health record management and practice start-ups.

McKesson Corporation, currently ranked 15th on the FORTUNE 500, is a healthcare services and information technology company dedicated to making the business of healthcare run better. We partner with payers, hospitals, physician offices, pharmacies, pharmaceutical companies and others across the spectrum of care to build healthier organizations that deliver better care to patients in every setting.

Previously she held the position of President/Managing Partner of Source One Medical Management where she successfully led the overall business development and management of the company. She also developed and directed the healthcare division for Source One Services specializing in medical practice management billing and collections for physician groups. 18 Affiliated Practice

About McKesson Corporation

McKesson Business Performance Services helps its customers improve their business and clinical performance with revenue cycle, practice management, ACO services and healthcare information technology solutions designed to achieve better business health. For more information, visit www.mckesson.com/bps.





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