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AUGUST 2015
Special Feature: Sovereign Health Vein and Vascular Institute New Jersey Health Insurance Exchange/Marketplace Insurer, N.J. Medical Associations Seek Solution to Surprise Out-Of-Network Medical Bills
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A fully integrated multi-specialty community healthcare system providing clinical excellence and convenient care to
NORTH JERSEY & NEW YORK RESIDENTS Built from the ground up right here in the Garden State, Sovereign Health System has called New Jersey home for more than 20 years. After two decades of steady growth, Sovereign Health System continues to expand its physician ranks, cutting-edge services, and conveniently located facilities to better serve the people of New Jersey and New York. Sovereign knows it’s important to have that one-on-one connection with your nurse and doctor. That’s why at Sovereign you are treated like family -- and why our latest patient-satisfaction rating is 95%. Sovereign provides you with multi-specialty care, ongoing support, and comprehensive services in one fully integrated community healthcare system. In short, we offer peace of mind . . . close to home.
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C O N T E N T S
Special Feature
Sovereign Health Vein and Vascular Institute
8 Emphasis on ‘patient-centered’ health care is paying off,
4
Horizon study finds 9 Accountable Care, ACA Bring Medicare Stability until 2030 10 Half Of Nation’s Hospitals Fail Again To Escape Medicare’s Readmission Penalties 11 Medicare Readmission Penalties By State, Year 4 14 Statement from AMGA on the Quality and Financial Performance Results from Pioneer ACOs and Medicare Shared Savings Program 15 Affordable Care Act payment model saves more than $384 million in two years, meets criteria for first-ever expansion 17 Pioneer ACO lessons shaping future accountable care programs
Affiliated Practice
Special Feature
Sovereign Health
Vein and Vascular Institute
One of the Spectacular Jewels in Sovereign Health System’s Multi-Faceted Crown By Iris Goldberg For more than two decades Sovereign Health System has been steadily growing and continues to evolve. Its beginnings date back to 1992 when urologist John H. Hajjar, MD, FACS, MBA, who today serves as CEO and Chairman of Sovereign, opened an ambulatory surgery center (ASC) in Fair Lawn, New Jersey, one of the first of its kind in Bergen County. There, Dr. Hajjar could use emerging laser technology to treat patients with enlarged prostates on an outpatient basis. Charging considerably less than what a hospital would be paid for the same procedure - Dr. Hajjar’s surgery center was at the forefront of cost-effective ambulatory care, now preferred by physicians and patients alike whenever possible. Fast forward to 2005 and by then the Sovereign organization had grown to include three full same day surgery centers performing minimally invasive urologic and orthopedic procedures, including hip and knee replacements, accomplished with small incisions. Sovereign Health was on its way to becoming a leader in providing patient care at a lower cost while maintaining the highest quality of standards. Today, Sovereign is a fully integrated community healthcare system, managing 13 ASCs throughout New Jersey, New York and Florida, with others in Manhattan and Connecticut on the not too distant horizon. Additionally, Sovereign Health now includes cancer centers, urgent care centers and a multidisciplinary physician group, attracting and recruiting specialists from every field. These are all supported by ancillary services such as anesthesia and laboratory, as well as state-of-the-art medical information technology. Dr. Hajjar recently discussed Sovereign Health’s history, mission and organization with New Jersey TV personality, Steve Adubato. Click here to view. This past June, in keeping with Dr. Hajjar’s mission to create and grow a physician-owned and physician-led, vertically integrated Dr. Steve Elias health system with centers of excellence to deliver high-quality, cost-effective patient care, Sovereign Health welcomed renowned vascular surgeon Steve Elias, MD, who specializes in the minimally invasive management of vein disease. Dr. Elias utilizes innovative technology to successfully treat patients with symptomatic venous disorders and associated cosmetic issues. As Director of Sovereign Health’s Vein and Vascular Institute, Dr. Elias will train vascular surgeons, interventional radiologists and interventional cardiologists in the cutting edge techniques he has perfected. As this proceeds, it is the hope that many of these physicians will join Sovereign to grow the team of vein and vascular specialists. Dr. Elias shares that a great number of patients are treated for bulging varicose veins. Besides their unattractive appearance, most varicose veins cause symptoms such as: heaviness, aching, swelling or throbbing that can interfere with the quality of one’s life. Some other patients with small spider veins are usually concerned primarily with the cosmetic component. At the other end of the spectrum, as Dr. Elias points out, are those who suffer from complications of vein disease such as blood clots known as superficial (vein) phlebitis or deep vein thrombosis (DVT). Some have significant skin changes or ulcers at their ankles because of veins that are not functioning properly. “The misconception about vein disease, I think, on the part of other physicians, is that it is purely a cosmetic issue and that treatment is
4 AFFILIATED PRACTICE
not covered by insurance. In fact, most procedures and care are covered by insurance because of the significant impact vein disease has on quality of life,” Dr. Elias offers. He goes on to explain that the vast majority of vein patients are, in fact, symptomatic. For patients with blood clots, as well, Dr. Elias relates that often primary care physicians tend to under-treat by merely prescribing anti-coagulants without referring to a vein specialist. “Unfortunately, what happens is we see these patients three to five years down the line and now their legs are swollen or they’re developing ulcers because their veins cannot carry the blood back up the leg due to chronic scarring and narrowing of the veins from previous DVT. This is called post phlebitic syndrome,” Dr. Elias reports. “Yes, initially, blood thinners are okay but now we have minimally invasive techniques that can dissolve the acute clot and preserve the function of the veins so that patients don’t wind up with these complications,” he emphasizes. Dr. Elias is passionate about changing the mindset of patients and referring physicians alike, who may still think of vein treatment as it was years ago. “Ninety-five percent of what we offer to manage vein disease involves a few needle sticks, local anesthesia, perhaps mild sedation and takes no more than half an hour to complete,” informs Dr. Elias. “This is not your grandmother’s stripping,” he adds. “You can drive yourself there and drive yourself home and the next day play tennis, golf, exercise – whatever you normally do.” Click here to view Dr. Elias performing a MOCA procedure of the great saphenous vein using the ClariVein device. While it is true that patients with vein disease do not, for the most part face possible loss of life or limb, Dr. Elias knows how devastating it is for patients to lose the good quality of their lives. “To be able to offer the technology we now have and restore a patient’s quality of life – that’s really gratifying to me,” Dr. Elias shares. “And that’s why a big part of my job, as I see it, is to get the word out to primary care physicians, emergency room physicians and others. These patients need, at the very least, to have a consultation with a vein specialist,” he strongly states. In terms of interacting with other physicians, Dr. Elias is also extremely involved with educating specialists who currently treat vein disease and want to take things to the next level, as well as those who have just completed their fellowship training in vascular surgery and are starting out. Recognized for his considerable expertise by the companies that develop new, minimally invasive technologies for treating vein disease, Dr. Elias is called upon to help pioneer their implementation. Paul Angresano, VP, New Business Development at Sovereign Health Medical Group was instrumental in bringing Dr. Elias to Sovereign. “He’s one of the fathers of treating vein disease in the world. So, people come from all over to interact with him and be proctored by him,” Mr. Angresano says, explaining why Dr. Elias and the Vein and Vascular Institute under his direction, are a most valuable addition to the Sovereign organization. In fact, going forward it is the hope that many of the vein specialists who receive enhanced training there will ultimately join the Sovereign Health System. As Dr. Hajjar envisioned, the creation of centers of excellence for many medical specialties such as orthopedics, urology, urgent care, cancer treatment and management of vein disease is the foundation upon which Sovereign Health is built. “To achieve that goal we sought out Dr. Elias to be a part of that,” shares Mr. Angresano. “From my perspective that was one of the things that attracted me to come here, “ Dr. Elias confides. “To be able to develop a vein and vascular center was very appealing to me because I come in contact with multiple people who are treating vein disease or want to treat vein disease. Now we can get the right people who are knowledgeable and have the good skill sets to come and join us,” Dr. Elias elaborates. “The goal at Sovereign is to be able to offer good health care, not necessarily in a hospital setting but within the community. Sovereign has many places to offer this care but we need to get the right people in place to provide it.” Dr. Elias feels that he has arrived at Sovereign at a very appropriate time in his career because his goals right now are very much in line with the principles upon which Sovereign Health is based. Offering topnotch health care must be partnered with providing the academic environment that allows physicians to expand their horizons. He wants other specialists who have an interest in developing their expertise to the highest level to eventually join the Sovereign team. “The challenge for us who are where we want to be professionally is to teach others how to get there and to even exceed us, “ Dr. Elias strongly believes. For Dr. Hajjar and the others who are involved in furthering the mission to provide high quality, costeffective health care through an integrated physiciandriven health care system, prioritizing education is the cornerstone. As the Sovereign Health System continues to evolve, it’s all about passing the torch.
Dr. Elias concentrates on the images shown on the monitor to guide the catheter.
Dr. Elias uses dye to more clearly view any blockages in the vein.
AUGUST 2015
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If you are a physician and are interested in joining the Sovereign Health Medical Group, please contact : Paul Angresano, VP, New Business Development at 201-855-8376 / pangresano@sovms.com
Sovereign Health
Sovereign Health
SurgiCare
Development & management company for ambulatory surgery centers (ASC). Same-day procedures performed in a convenient, caring setting. SURGEM, LLC., has new facilities in select markets in New Jersey, New York and Florida with additional facilities coming soon. Our 13 centers are conveniently located, staffed with highy skilled, caring physicians and nurses, equipped with the latest technology, and designed to provide an optional patient experience in a spotless facility and comfortable setting. We treat you the way we would want ourselves or our family members to be treated, and that approach is reflected in everything we do - and in our consistently high patient-satisfaction ratings. Carlstadt 630 Broad St 201-355-1700
Mahwah 400 Franklin Turnpike 201-766-1550
Englewood Cliffs 630 East Palisade Ave 201-503-1522
Oradell 555 Kinderkamack Rd 201-265-8173
Fair Lawn 15-01 Broadway 201-703-8487
Ridgewood 1124 East Ridgewood Ave 201-493-2310
Freehold* 901 West Main St., Suite 302 732-303-1616
SJCH Pediatric (Fair Lawn) 14-01 Broadway 201-791-0100
Jersey City 631 Grand St 201-830-2280
Wayne 246 Hamburg Turnpike 973-790-0954
University Center for Ambulatory Surgery (Somerset) 2 Worlds Fair Dr 732-748-1117 Manhattan, NY** 800 2nd Ave (7th Floor) 212-419-1016
Cancer Care The Physicians of Sovereign Health Cancer Care are fellowship trained to treat malignancies of any site
Sovereign Health Cancer Care offers our patients state-of-the-art technology in a compassionate outpatient setting. With VMAT IRMT and cone beam IGRT, radiotherapy is delivered precisely and safely every day. Our oncology experts have published extensively in the nations’ leading peer reviewed journals and have vast experience treating cancers of all sites, including prostate, breast, lung, brain and cancers of the gastrointestinal and gynecologic systems. Hackensack 20 Woodridge Ave 201-880-7580
New Brunswick - Saint Peter’s 215 Easton Ave 732-745-8590
Jersey City 631 Grand St 201-942-3999
Wayne - Saint Joseph’s 234 Hamburg Turnpike 973-310-0300
Boca Raton, FL 1905 Clint Moore Rd 561-544-5501
Sovereign Health Medical Group
*Located in CentraState Medical Center **Administrative services agreement
Sovereign Health Medical Group was created by physicians with the needs of patients and other physicians foremost in mind
Sovereign Health Urgent Care
Get immediate medical care at Sovereign Health Urgent Care When an injury or illness occurs and you are in need of medical attention on an immediate basis, visiting an urgent care clinic is a smart move. Your time is important, and we are dedicated to seeing you as quickly as possible. Our priority is providing excellent patient care in an efficient manner. Fair Lawn 15-01 Broadway 201-794-3600
Glen Rock 85 Harristown Rd 201-479-5450
6 ANew F F Jersey I L I A TPhysician ED PRACTICE
Hewitt 1900 Union Valley Rd 973-728-5930
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Breast Surgery
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Orthopedic Surgery
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Cardiology
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Pathology
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Colon-Rectal Surgery
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Podiatry
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Gastroenterology
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Urgent Care Facilities
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Ears, Nose & Throat (ENT)
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Urogynecology
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Emergency Medicine
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Urology
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General Surgery
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Radiation Oncology
•
Hematology & Oncology
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Vein & Vascular Care
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Internal Medicine
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Other Specialties
•
Neurology
REMEMBER WHY YOU BECAME A DOCTOR?
SOVEREIGN HEALTH DOES. To take care of patients, not paperwork To deal with health conditions, not health plans To be a physician, not an administrator
Join our physician-owned, physician-led medical group, and practice medicine the way it’s meant to be practiced – with the patient always coming first and the physician truly sovereign.
JOHN HAJJAR, MD, FACS, MBA Founder, Chairman, and CEO
My reason for becoming a physician is simple: I wanted to help people. Sovereign truly is a physician-led, vertically integrated healthcare system that does just that. Our mission is to deliver high-quality, cost-effective care through our exceptionally skilled physicians and staff at our conveniently located state-of-the-art facilities.
GLENN A. GMYREK, MD Chief Medical Officer
My goal as a physician, first and foremost, is to help people feel better. In today’s healthcare environment we all know this can be very challenging. Fortunately, at Sovereign Health Medical Group, I have been able to practice medicine without any of the distractions that can make a physician’s job tougher than it already is.
PHYSICIAN-LED, MANAGEMENT DRIVEN To learn more about “The Sovereign Difference,” contact Paul Angresano, Vice President, at 201-855-8376 or pangresano@sovms.com, or visit www.sovereignhealthsystem.com CORPORATE OFFICE: SOVEREIGN MEDICAL SERVICES, INC., 85 HARRISTOWN RD., GLEN ROCK NJ, 07452, 201-834-1100
WWW.SOVEREIGNHEALTHSYSTEM.COM
Emphasis on ‘patient-centered’ health care is paying off, Horizon study finds By Joshua Burd The push toward “patient-centered” medical care is bearing fruit for Horizon Blue Cross Blue Shield of New Jersey, leading to both lower costs for members and higher scores on so-called quality care metrics. Those are the findings of a new study released this week by the Newark-based insurer. Along with higher marks in areas such as diabetes control and cancer screenings, the study found that members involved in patient-centered programs get their care at a cost that is 9 percent lower than those at traditional doctor practices. Patient-centered practices are those in which Horizon works closely with the doctors to better coordinate medical care, reduce unnecessary costs and improve the patient experience. Part of that approach includes rewarding doctors for meeting certain clinical quality, patient satisfaction and efficiency benchmarks, among other features. Horizon BCBSNJ, the state’s largest health insurer, said it has more than 750,000 members participating in such programs, with more than 6,000 network doctors participating. “The promise of patient-centered, or value-based, care to deliver better quality care at a lower cost is no longer theoretical, it’s a reality,” Robert A. Marino, chairman and CEO of Horizon BCBSNJ, said in a prepared statement. “The 2014 results further demonstrate how doctors, hospitals and Horizon are innovating and transforming health care to ensure patients receive more coordinated, better quality care at a lower cost.” For its 2014 results, the insurer reviewed claims data for members receiving care from a patient-centered practice and compared those findings with members receiving care from traditional primary care practices. In a news release, Horizon said the results found that patient-centered members, as compared with those members in traditional practices, had a: •
6 percent higher rate in improved diabetes control.
•
7 percent higher rate in cholesterol management for diabetic patients.
•
8 percent higher rate in colorectal cancer screenings.
•
3 percent higher rate in breast cancer screenings.
The findings also show that more coordinated care is being provided at a lower cost, as Horizon BCBSNJ members in patientcentered practices had a: •
8 percent lower rate in hospital admissions.
•
5 percent lower rate in emergency room visits.
•
9 percent lower total cost of care.
Unlike the traditional fee-for-service model, patient-centered practices are also financially rewarded to improve patient care based upon national clinical guidelines and also improve the patient experience with steps such as extended hours and more active communication. Patient-centered practices are intended to provide patients with benefits such as a care coordinator who provides additional patient support, information and outreach, along with extra wellness education and active patient monitoring and communication from the doctor and care coordinator.
8 AFFILIATED PRACTICE
Accountable Care, ACA Bring Medicare Stability until 2030 By Jennifer Bresnick Medicare has plenty to celebrate as it turns fifty, including a new lease on its financial life thanks to accountable care initiatives that have extended its solvency for another few decades. As spending growth slows with an industry-wide emphasis on preventative care, pay-for-performance reimbursements, and population health management, CMS and the Medicare Trustees have announced that the Medicare trust fund will remain solvent until the year 2030. Last year’s report also pinned 2030 as the date when Medicare’s hospital payment fund would run dry, but the deadline represents a thirteen-year extension of solvency over estimates from 2009. Per-beneficiary spending has been low over the past five years, averaging 1.3 percent over that timeframe. While the number of beneficiaries is projected to grow significantly as more of the Baby Boomer generation ages into retirement, officials are optimistic about the long-term future of the nation’s second largest payer. “Growth in per-Medicare enrollee costs continues to be historically low even as the economy continues to rebound. While this is good news, we cannot be complacent as the number of Medicare beneficiaries continues to grow,” said Andy Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), noting that Medicare provided coverage to 53.8 million beneficiaries in 2014, with $613 billion in expenditures and $599 billion in income.
“That’s why we must continue to transform our health care system into one that delivers better care and spends our dollars in a smarter way for beneficiaries so Medicare can continue to meet the needs of our beneficiaries for the next 50 years and beyond," he continued. “The news in this year’s trustees report gives us more to celebrate as Medicare marks its 50th year," added Joe Baker, President of the Medicare Rights Center. "Its findings confirm that Medicare is not in crisis.” CMS has been aggressively retooling the way Medicare pays the healthcare community, committing to an ambitious accountable care timeline and expanding opportunities for providers to form accountable care organizations and engage in value-based reimbursement structures. Medicare’s strategy for stretching its funding includes challenging providers to take on more financial risk for patients in need of coordinated chronic disease management. CMS has also been successfully encouraging providers to use health IT and population health management strategies to reduce preventable hospital readmissions, improve patient safety, and channel service utilization into less expensive venues. Next on the agenda is a thorough overhaul of Medicare’s quality reporting and EHR Incentive Programs, which help provide industry benchmarks for value-based care and patient outcomes. These efforts have quickly proved their worth, the report says, by narrowing the gap between spending and reimbursement. CMS officials believe that the Affordable Care Act has helped to nudge spending downward. At 4.2 percent, per-enrollee spending growth is expected to stay lower than the overall growth in health expenditures, which sits at 5.1 percent. Average per-beneficiary spending was $12,432, a 2 percent increase over last year, but Medicare Part A and Part D spending was lower than anticipated. AUGUST 2015
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Half Of Nation’s Hospitals Fail Again To Escape Medicare’s Readmission Penalties By Jordan Rau Once again, the majority of the nation’s hospitals are being penalized by Medicare for having patients frequently return within a month of discharge — this time losing a combined $420 million, government records show. In the fourth year of federal readmission penalties, 2,592 hospitals will receive lower payments for every Medicare patient that stays in the hospital — readmitted or not — starting in October. The Hospital Readmissions Reduction Program, created by the Affordable Care Act, was designed to make hospitals pay closer attention to what happens to their patients after they get discharged. Since the fines began, national readmission rates have dropped, but roughly one of every five Medicare patients sent to the hospital ends up returning within a month. Some hospitals view the punishments as unfair because they can lose money even if they had fewer readmissions than they did in previous years. All but 209 of the hospitals penalized in this round were also punished last year, a Kaiser Health News analysis of the records found. Medicare is penalizing hospitals that see patients return to the hospital too soon after being discharged. Medicare reduces what it pays each hospital per patient, per stay. The fines are based on readmissions between July 2011 and June 2014 and include Medicare patients who were originally hospitalized for one of five conditions: heart attack, heart failure, pneumonia, chronic lung problems or elective hip or knee replacements. For each hospital, Medicare determined what it thought the appropriate number of readmissions should be based on the mix of patients and how the hospital industry performed overall. If the number of readmissions was above that projection, Medicare fined the hospital. The fines will be applied to Medicare payments when the federal fiscal year begins in October. In this round, the average Medicare payment reduction is 0.61 percent per patient stay, but 38 hospitals will receive the maximum cut of 3 percent, the KHN analysis shows. A total of 506 hospitals, including those facing the maximum penalty, will lose 1 percent of their Medicare payments or more. Overall, Medicare’s punishments are slightly less severe than they were last year, both in the amount of the average fine and the number of hospitals penalized. Still, they will be assessed on hospitals in every state except Maryland, which is exempt from these penalties because it has a special payment arrangement with Medicare. These lower payments will affect three-quarters of hospitals or more in Alabama, Connecticut, Florida, Massachusetts, New Jersey, New York, Rhode Island, South Carolina, Virginia and the District of Columbia. KHN found that fewer than a quarter of hospitals face punishments in Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota and South Dakota. Most of the 2,232 hospitals spared penalties this year were excused not because Medicare found readmissions to be sufficiently infrequent, but because they were automatically exempted from being evaluated — either because they specialized in certain types of patients, such as veterans or children, because they were specially designated “critical access” hospitals, or because they had too few cases for Medicare to accurately assess. The readmission penalties are not the only fines hospitals face this year. As it did last year, Medicare is also giving out bonuses and penalties based on a variety of quality measures. The government has not yet announced those, but they also begin in October. Those financial incentives will total about $1.5 billon. Medicare will also punish hospitals with high rates of infections and other avoidable occurrences of patient harm. The KHN analysis found that four hospitals have received the maximum readmission penalty every year. Two are in Kentucky: Harlan ARH Hospital, which is in the heart of the Appalachian coalfields, and Monroe County Medical Center in Tompkinsville. The other hospitals are the Livingston, Tenn., Regional Hospital — also in Appalachia — and Franklin Medical Center in Winnsboro, La. None of the hospitals immediately returned phone calls Monday. Hospitals have been lobbying both Medicare and Congress to take into account the socio-economic background of patients when assessing readmission penalties. They argue that some factors for readmissions — such as whether patients can afford medications or healthy food — are beyond their control. The Medicare Payment Advisory Commission, which advises Congress, has recommended altering the readmission penalties. The National Quality Forum, a nonprofit that Medicare looks to when creating quality metrics, is examining whether socio-economic factors should be included when calculating readmission measurements as well as other barometers of hospital quality. But that experiment will take two years to complete.
10 A F F I L I A T E D P R A C T I C E
“Hospitals should not be penalized simply because of the demographic characteristics of their patients,” Sens. Joseph Manchin III (D-W.Va.) and Roger Wicker (R-Miss.) wrote last week in the Journal of the American Medical Association. The senators have introduced a bill to consider socio-economic factors when calculating the penalties. Their essay, co-written by Dr. Andrew Boozary, a health policy analyst, pointed to a study that found safety-net hospitals were nearly 60 percent more likely than other hospitals to have been penalized in all of the first three years of the penalties. Hospitals with the lowest profit margins were 36 percent more likely to be penalized than those in better financial shape, the essay said. In regulations released Friday, the Centers for Medicare & Medicaid Services reiterated that it would not unilaterally make such changes in the program, noting that some safety-net hospitals have been able to keep their readmission rates low. “While we appreciate these comments and the importance of the role that sociodemographic status plays in the care of patients,” the agency wrote in the rule, “we continue to have concerns about holding hospitals to different standards for the outcomes of their patients of low sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations.”
Medicare Readmission Penalties By State, Year 4 Medicare evaluated the readmission rates of the nation’s hospitals in determining the fourth year of penalties in the Hospital Readmissions Reduction Program. Medicare will apply the penalties to all its payments for patient stays between Oct. 1, 2015, and Sept. 30, 2016. In this chart, the first column after the state name shows the total number of hospitals penalized in each state. That is followed by the percent of each state’s hospitals that were penalized. That calculation includes hospitals exempted from the fines, such as those serving veterans and children. The final column shows the average penalty for penalized hospitals. *The penalties do not apply to Maryland hospitals, as that state has a unique reimbursement arrangement with Medicare, and thus Maryland is not included in this table.
AUGUST 2015
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CONT.
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12 A F F I L I A T E D P R A C T I C E
Statement from AMGA on the Quality and Financial Performance Results from Pioneer ACOs and Medicare Shared Savings Program
2014 Shared Savings and Pioneer ACO Results Demonstrate Improved Quality, Mixed Financial Results
The Centers for Medicare and Medicaid Services (CMS) released 2014 quality and financial performance results for Pioneer Accountable Care Organizations (ACOs) and participants in the Medicare Shared Savings Program. Results reveal that Pioneer ACOs showed improvements in 28 of the 33 quality metrics, while Shared Savings participants improved on 27 of 33 quality measures. • For program year 2014, savings of $341 million was shared with 92 Shared Savings ACOs, while 89 ACOs that reduced healthcare costs compared to their benchmark did not share in savings because they did not meet minimum savings requirements. •
In the Pioneer ACO Program, 15 ACOs generated savings, with 4 of them not able to share in savings.
Many American Medical Group Association (AMGA) members remain at the forefront of value-based care and have been eager to embark on the ACO journey. These medical groups continue to make significant investments to improve the quality of health care for the Medicare beneficiaries they serve, but concerns remain about the operational and financial framework of the programs that prevent many ACOs from earning shared savings. AMGA has long advocated for improvements to the features of the program that will help reward ACOs for the important work they are doing to improve quality and reduce healthcare expenditures. Donald W. Fisher, Ph.D., CAE, President and Chief Executive Officer of AMGA, stated today: “We appreciate the tremendous efforts our medical group members have made to improve the care for their Medicare patients through the Shared Savings Program and the Pioneer ACO Program. Some of them have been able to share in savings while improving patient care, while others, despite their significant investments in improved care processes and quality initiatives, have not realized any shared savings. These results point to the need for continued refinements to the ACO program framework, and AMGA is committed to working with CMS and Congress to pave the way for medical groups to succeed as ACOs.”
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Affordable Care Act payment model saves more than $384 million in two years, meets criteria for first-ever expansion Pioneer ACO Model advances quality and value in health care Today, an independent evaluation report released by the Department of Health and Human Services showed that an innovative payment model created as a pilot project by the Affordable Care Act generated substantial savings to Medicare in just two years. Additionally, the independent Office of the Actuary in the Centers for Medicare & Medicaid Services (CMS) has certified that this patient care model is the first to meet the stringent criteria for expansion to a larger population of Medicare beneficiaries. The independent evaluation report for CMS found that the Pioneer Accountable Care Organization (ACO) Model generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care. The Actuary’s certification that expansion of Pioneer ACOs would reduce net Medicare spending, coupled with Secretary Sylvia Mathews Burwell’s determination that expansion would maintain or improve patient care without limiting coverage or benefits, means that HHS will consider ways to scale the Pioneer ACO Model into other Medicare programs. “This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” said HHS Secretary Sylvia M. Burwell. “The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the health care system at large.” The Pioneer ACO Model, one of the first payment models launched by CMS, gives experienced health care organizations accountability for quality and cost outcomes for their Medicare patients. Doctors and hospitals who form Pioneer ACOs can share in savings generated for Medicare if they work to coordinate patient care, keep patients healthy and meet certain quality performance standards, or they may be required to pay a share of any losses generated.
Currently, the Pioneer ACO Model is serving more than 600,000 Medicare beneficiaries. According to today’s report, compared to their counterparts in regular fee-for-service or Medicare Advantage plans, Medicare beneficiaries who are in Pioneer ACOs, on average: •
Report more timely care and better communication with their providers.
•
Use inpatient hospital services less and have fewer tests and procedures.
•
Have more follow-up visits from their providers after hospital discharge.
Pioneer ACOs are part of the innovative framework established by the Affordable Care Act to move our health care system toward one that rewards doctors based on the quality, not quantity, of care they give patients. HHS earlier this year announced the ambitious goal of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016 and 50 percent of payments by 2018. More than 3,600 payers, providers, employers, patients, states, consumer groups, consumers and other partners have registered to participate in the Health Care Payment Learning and Action Network, which was launched to help the entire health care system reach these goals. Pioneer ACOs generated Medicare savings of $279.7 million in 2012 and $104.5 million in 2013. To date, actuarial analyses show that ACOs in the Pioneer ACO Model and the Medicare Shared Savings Program have generated over $417 million in total program savings for Medicare. The primary analyses in the evaluation are also reported in an article published in the Journal of the American Medical Association today. “This success demonstrates that CMS can design and test innovative payment and service delivery models that produce better outcomes for the Medicare program and beneficiaries,” added Patrick Conway, MD, the acting principal deputy administrator of CMS. “This gives CMS greater confidence in scaling elements of the model to benefit people across the nation, and we are working to determine the best strategies for embedding the lessons we have already learned from the Pioneer Model into permanent Medicare programs and our nation’s health system.” AUGUST 2015
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Pioneer ACO lessons shaping future accountable care programs ‘Real momentum’ supports new models of care in Medicare and Medicaid.
Jennifer Zaino
The Centers for Medicare and Medicaid Services’ Pioneer ACO program has experienced notable financial success, but the number of Pioneer ACOs also has dropped from 32 original providers to 19 as of last fall. In the second performance year, Pioneer ACO participants generated an estimated total model savings of over $96 million, and qualified for shared savings payments of $68 million. Given the program’s departures, it’s important to ask how the remaining providers have been able to realize the financial successes that eluded those participants that withdrew. “Population health management, whether you call it an ACO or an IPA, is a business strategy, not an experiment or demonstration,” said Stephen Rosenthal, vice president of network management at Montefiore Health System, a New York-based health system that includes eight hospitals, an extended care facility, and primary and specialty care providers at more than 150 locations across the Bronx and Westchester County region. “Those who will be most successful in any population strategy are those who made the decision that this is the way business will be handled in the future, and focused on how to best change the business model to accommodate the strategy of managing a population’s health.” Montefiore had a head start. The organization’s strategy of managing population health as a business model goes back almost 20 years, and now accounts for about 56 percent of its business. “Currently in our all value-based contracting we are approaching 400,000 lives that we are financially at risk for, either through global capitation or shared savings arrangements similar to the Pioneer ACO,” Rosenthal explained. Montefiore worked on Medicare fee-for-service demonstration projects with CMMI (Centers for Medicare and Medicaid Innovation) several years before the launch of the Pioneer ACO program. It was natural to work with CMS as one of the original group of 32 Pioneer ACO providers. Montefiore had already honed key core competencies, and was committed to ongoing investment in infrastructure, analytics and staffing to support its Pioneer ACO efforts. In 2012, Montefiore helped Medicare save over $23 million and realized $14 million in earned shared savings. In 2013, it earned roughly the same amount in shared savings – close to $13.5 million, based on helping Medicare save $24.5 million. The health system already had information about many of the 23,000 new Medicare patients in collective systems across its facilities. It also used business intelligence to discover that about nine percent of the new patients were generating 80 percent of the entire population’s medical expenses. The patients typically had significant chronic issues, such as uncontrolled diabetes. “If we could get to them and help them, we stood a chance of improving on those medical expenses,” said Rosenthal. Getting high-risk patients to the right healthcare provider at the right time – in the right setting – would be critical to ensuring that Montefiore met the Pioneer ACO program’s quality metrics and not jeopardize its ability to earn shared savings dollars. An intense focus on quality led to a 45 percent reduction in diabetes inpatient admissions in the first year, and a 35 percent reduction in all-cause readmissions. Other key success factors were Montefiore’s use of predictive analytics to identify individuals who, based on information about their past histories and current medical conditions, were most susceptible to potential readmission in the 30 days following hospital discharge. The health system made sure these patients received necessary care either at home, or at nursing facilities, to help avoid high-cost readmissions. Montefiore also helped patients with end-stage renal disease avoid hospital stays by placing primary care doctors in the dialysis centers that patients visited, allowing easy access to medical professionals who could address their other healthcare problems. Additionally, Montefiore created an emergency room navigator job in its hospitals. A nurse, nurse practitioner, or social worker checks in with patients after registration in the ER to help expedite the hospital triage process or provide options for more appropriate care settings that might be less expensive and more comfortable for the patient. A solid foundation Before joining the Pioneer ACO program, Beth Israel Deaconess Care Organization (BIDCO) – whose hospital and physician network includes more than 2,400 primary care physicians and specialists and seven hospital institutions in Massachusetts, as well as has a tertiary affiliation with Beth Israel Deaconess Medical Center – also had experience in population health management. BIDCO already had in place alternative payment model contracts with local health insurance carriers where it received a budget to care for members. In year one, the ACO’s Medicare savings added up to about $15.6 million, with BIDCO receiving about $7.8 million in earned shared savings. In year two, it saw those numbers rise to $17.3 million and $10.6 million, respectively. BIDCO president and CEO Christina Severin said that between years one and two the ACO grew “more sophisticated around what tools and expertise we were bringing to bear to drive program success.” BIDCO had programs and medical economics tools in year one, “but it didn’t become turnkey and fully automated until year two,” she said. For example, BIDCO improved stratification methodologies to identify patients not only at high risk for upcoming hospitalization in the next six months, but those who could benefit from interventions to avoid that outcome. To support the latter population, AUGUST 2015
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BIDCO has a House Calls Medicine program where nurse practitioners conduct regular home visits with patients who have multiple chronic morbidities. Not only does the program make meaningful improvements on total medical expenditures, but it “creates opportunities, since we now have engagement with these patients and their families for a number of other programs and services to prevent an adverse event or readmission,” Severin said. The obstacles All Pioneer ACO participants face their share of challenges. Engaging community physicians to implement electronic medical records and achieve meaningful use was one for Montefiore, Rosenthal noted. It was an important challenge to meet, as electronically documenting interactions with patients is required to meet Pioneer ACO quality metrics. Montefiore used some of its year one earned shared savings to help physicians get access to EMR technology, and to provide additional monetary incentives to help physicians make other changes that contribute to overall savings. “Many times the savings accrue because physicians or their staff see patients more frequently in their office or telephonically” and they need to be compensated for that, Rosenthal said. BIDCO needed to work with its provider community to improve Pioneer ACO quality scores in a targeted manner to help increase earned shared savings. It drew on its past experience of supporting doctors in trying to improve quality scores for previous budget-based contracts. The ACO reinvented the role of individuals who had done that work, creating electronic health record optimization specialists who educate doctors about ACO quality measures, speak with them about where they are underperforming, and ensure they are appropriately entering quality metric information into EHR systems. BIDCO physicians also needed to adjust the skill set they’d bring to bear on the Pioneer ACO Medicare population, which tends to skew older and have different morbidities than the commercial HMO populations for which they had experience managing risk. For instance, about a year ago it became an option for ACOs to apply for a skilled nursing facility (SNF) waiver that allows primary care providers to refer select Pioneer ACO patients – perhaps those who have experienced a fall or mild case of pneumonia – directly to a CMS-approved SNF and bypass the required three-day hospital stay if it is clinically unnecessary. “A nursing facility bed can be a safe, low-cost and more desirable alternative to an acute care setting to the beneficiary and their caregivers,” Severin said. But primary care providers must know that a patient is in the Pioneer ACO program and must be educated about that option. Providers work with BIDCO to get patients approved for a waiver. Banner year The first year of the Pioneer ACO program proceeded fairly smoothly at Arizona’s Banner Health Network, which is comprised of 13 acute-care hospitals and other services throughout the state. The organization saved Medicare about $19 million in 2012 and realized approximately $13 million in earned shared savings, said Greg Wojtal, BHN’s chief financial officer. Year two was a bit tougher, though the health network still saved Medicare about $15 million and earned approximately a $9 million share. Banner felt the impact of rising financial and quality targets, and was hurt by an increase in specialty drug costs. In one quarter in 2013, the cost curve for such drugs rose from 6 to 8 percent of Banner’s expenses to approximately 10 to 15 percent, Wojtal said. But thanks to its care management model, information technology and network development, Banner succeeded. Wojtal said BHN believes the healthcare industry cost curve is “not sustainable, and we wanted to be part of the solution.” To that end, it was able to consistently improve its utilization of business intelligence and analytics technology to keep certain patient populations out of the hospital. “We were able to offset some surprises,” such as the rise in specialty drug costs, Wojtal said, and to generally meet targets for reducing readmissions. While the contribution from each “attributed member” to Medicare savings was less in year two than in year one, BHN had more members overall. “We did fairly well in terms of overall performance,” said Wojtal. He said Banner found that engaging with physicians – especially primary care doctors – is critical. “You need to communicate with your network about what’s happening so that you get the right care at the right time in the right setting.” Future for the Pioneers All three organizations are committed to continue growing value-based care. There is real momentum behind value-based contracting in Medicare and Medicaid, Rosenthal said. “There will be less incentive to do things that aren’t necessary, for the purposes of revenue generation, and instead there will be incentives to do things that make sense for the best care of the patient.” The recently announced Next Generation ACO Model continues to move the Medicare program and the healthcare system toward paying providers based on quality rather than quantity of care. While the Pioneer program is still in year four of its five-year cycle, Banner has filed a non-binding letter of intent to participate in the Next Generation ACO effort, Wojtal said, as it evaluates the new model. Montefiore and BIDCO are exploring it as well. “The Next Generation focus is about is taking all the good qualities, and eliminating the bad qualities, that we’ve discovered through the Pioneer ACO learning experience,” said Rosenthal.
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