Monday, April 11, 2011

If you think accountable care organizations, or ACOs, will only affect hospitals and physicians, says health care attorney Jeff Baird, think again. These new entities will be charged with treating patients across care settings to better coordinate and improve care for Medicare patients that will keep them out of the system. That presents HME providers with both opportunities as these new referral sources emerge—and the challenges of providing the services the ACOs want. Here’s Baird’s explanation of ACO basics.

Question: Where do ACOs come from?

Answer: The Patient Protection and Affordable Care Act (Section 3022) created the Medicare Shared Savings Program, which allows CMS to contract with ACOs beginning Jan. 1, 2012.

Question: What is an ACO?

Answer: An ACO is a group of health care providers that agree to be accountable for the quality, cost and overall care of beneficiaries who are assigned to the ACO.

Question: What requirements must be met in order for an ACO to be set up?

Answer: An ACO must: have a formal legal structure (e.g., corporation or LLC); have a sufficient number of primary care professionals for the number of assigned beneficiaries (there will be at least 5,000 beneficiaries assigned to each ACO); enter into an agreement to participate in the program for at least three years; and meet certain quality standards. There are additional requirements as well.

Question: Who can form an ACO?

Answer: At this point, the only providers that can form ACOs are hospitals, physicians and similar professionals, such as nurse practitioners and physician assistants. The Department of Health and Human Services has the authority to add to this list.

Question: How can an ACO make money?

Answer: The ACO will bill and receive the traditional fee-for-service amount from Medicare. However, to encourage savings, CMS will set a benchmark amount for the ACO, and the ACO will be entitled to share in any savings if the actual expenditures of the ACO come in under the benchmark.

Question: What steps can an HME provider take to be involved?

Answer: An HME provider should introduce itself to ACOs that are in the formative stages. The ACO will be a large referral source, and the HME provider will continue to be paid on the traditional fee-for-service basis. It is also likely that the physicians in an ACO will refer patients to other providers, such as to an HME provider. Although such referrals may cut down on the amount that the physicians in the ACO bill Medicare, this reduction will be offset by the increase in the amount of shared savings that the organization will be eligible to distribute to its members.

For example, as a value-added service to the ACO, an HME company could provide a patient compliance program that should save the ACO money because patients would need fewer physician services. This, in turn, should increase the amount of shared savings that the ACO would be eligible to distribute.

Question: So when will CMS publish regulations on ACOs?

Answer: On March 31, CMS published over 120 pages of proposed regulations on ACOs. The text of the proposed rule can be found at www.cms.gov/sharedsavingsprogram/. Comments will be accepted until June 6, 2011.

For additional information, see a fact sheet on ACOs at http://www.HealthCare.gov/news/factsheets/accountablecare03312011a.html.

Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at 806/345-6320 or jbaird@bf-law.com.