You are here

Payment & Delivery Systems Reform

Accountable Care Organizations (ACOs)

Accountable Care Organizations (ACOs), or the Medicare Shared Savings Program (MSSP), are the first of the new payment modalities that have been implemented under the new law.

As implemented by CMS, ACOs will have a primary care focus, with providers agreeing to be accountable for the quality, costs, and overall care of assigned Medicare beneficiaries. Eligible participating providers will include group practices, networks of physicians, acute care hospitals employing physicians, partnerships or joint ventures between hospitals and physicians, and federal health centers. ACOs will have spending targets that are compared to actual spending. If ACO spending in a year is below the target established for that period, and they meet quality standards, ACOs will be able to share in savings with the Medicare program.

AdvaMed has argued for additional patient care safeguards for the ACO program, including adjustments to spending targets, payment incentives, and quality scores to avoid penalizing early adopters of advances in medical technologies.

The MSSP is one of three ACO programs implemented by CMS in 2011-2012.  The other two were initiated by the Center for Medicare & Medicaid Innovation (CMMI) and include the Pioneer ACO Model, which is for organizations having experience with integrated care delivery, and the Advanced Payment Model, which is for rural and physician-based ACOs needing start-up resources for building care coordination infrastructure. 

Bundled Payments

The health care reform law includes a requirement for CMS to undertake by 2013 a Bundled Payment Pilot in which the program will make a single payment to cover all services provided during an episode of care. Prior to moving forward with that national pilot, CMS announced in August 2011 a Bundled Payment Initiative under which provider organizations will be able to apply to the Center for Medicare & Medicaid Innovation (CMMI) to participate in a demonstration testing four different bundled payment models covering varying categories of services. For example, one model will cover an episode of care covering an inpatient hospital stay only. Another will cover the acute hospital stay plus all post-acute care (including physician services, nursing home, and home health, etc.) provided during a defined period (minimum 30 days) following discharge from the hospital.

AdvaMed is monitoring implementation of the ACO program and seeking regulatory and legislative changes to the program, as determined necessary and appropriate. AdvaMed has also developed policy positions and strategies to respond to CMS’s Bundled Payment Initiative to ensure that Medicare beneficiaries have access to appropriate services and technologies, including innovative technologies. We continue to engage with CMS and CMMI officials to discuss our concerns with bundled payment and ACO initiatives emerging from CMS/CMMI. 

AdvaMed’s Efforts

AdvaMed believes that payment and delivery system reforms incorporate safeguards to ensure that patients receive the most appropriate care for their needs and that the process of medical technology innovation is not interrupted.  These changes have the potential to dramatically change the existing system. If constructed properly, they may improve quality and create efficiencies in the delivery of care. Additionally, quality measures and payment and delivery modalities for these reforms have the potential to better reward the true value of advanced medical technologies.

AdvaMed is committed to working with all stakeholders on implementing these reforms. We want to ensure, however, that incentives to reduce spending don’t inadvertently compromise patient access to the full array of treatment options or discourage the use of innovative treatments that may be more expensive than older treatments but may represent significant therapeutic improvements or lower total costs over the long run.