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Accountable Care Organization (ACO) Investment Model

Overview

Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to provide coordinated, high-quality care to their Medicare patients to help them deliver better care at lower cost.

The goal of coordinated care is to ensure that patients, especially people with chronic conditions, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.

ACOs represent one part of a comprehensive series of initiatives in the Affordable Care Act that are designed to lower costs and improve care. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.

Medicare currently offers or is planning to offer several ACO initiatives:

  • Medicare Shared Savings Program
  • Pioneer ACO Model
  • Next Generation ACO Model
  • Advance Payment ACO Model
  • Comprehensive End Stage Renal Disease (ESRD) Care Initiative

This fact sheet provides a general description of the ACO Investment Model, a new ACO model being offered to support the Medicare Shared Savings Program ACOs.

Summary of the ACO Investment Model

The ACO Investment Model is an initiative developed by the Center for Medicare & Medicaid Innovation (Innovation Center) for organizations participating as ACOs in the Medicare Shared Savings Program (Shared Savings Program). The ACO Investment Model is a new model of pre-paid shared savings that builds on experience with the Advance Payment Model to encourage new ACOs to form in rural and underserved areas and current Medicare Shared Savings Program ACOs to transition to arrangements with greater financial risk.

The ACO Investment Model will be available to:

1) New Shared Savings Program ACOs that joined in 2015 or are joining in 2016. The ACO Investment Model seeks to encourage uptake of coordinated, accountable care in rural geographies and areas where there has been little ACO activity, by offering pre-payment of shared savings in both upfront and ongoing per beneficiary per month payments. CMS believes that encouraging participation in areas of low ACO penetration may spur new markets to focus on improving care outcomes for Medicare beneficiaries.

2) ACOs that joined the Shared Savings Program starting in 2012, 2013 or 2014. Here, the ACO Investment Model will help ACOs succeed in the Shared Savings Program and encourage progression to higher levels of financial risk, ultimately improving care for beneficiaries and generating Medicare savings.

Background

CMS is encouraging providers to participate in ACOs through the Medicare Shared Savings Program, which creates financial incentives for ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting Medicare beneficiaries first.

The Innovation Center

The Innovation Center was created by the Affordable Care Act to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care. It is committed to transforming the Medicare, Medicaid and Children’s Health Insurance Programs and is expected to help deliver better care for individuals, better health for populations, and lower growth in expenditures for Medicare, Medicaid and CHIP beneficiaries.

Working in concert with the Shared Savings Program, the Innovation Center is testing the ACO Investment Model and the Pioneer ACO Model, and has sponsored learning activities that help providers form ACOs and improve their results.  More information on all of these initiatives is available on the Innovation Center website at http://innovation.cms.gov.

The ACO Investment Model was developed in response to concerns and available research suggesting that some providers lack adequate access to the capital needed to invest in infrastructure necessary to successfully implement population care management.

Structure of Payments

New ACOs

Under the ACO Investment Model, ACOs that will begin participating in the Medicare Shared Savings Program on January 1, 2015 or January 1, 2016 will receive three types of payments:

  • An upfront, fixed payment:  Each ACO receives a fixed payment.
  • An upfront, variable payment:  Each ACO receives a payment based on the number of its preliminarily prospectively-assigned beneficiaries.
  • A monthly payment of varying amount depending on the size of the ACO:  Each ACO receives a monthly payment based on the number of its preliminarily prospectively-assigned beneficiaries.

The structure of these payments addresses both the fixed and variable costs associated with forming an ACO.

Existing ACOs

Under the ACO Investment Model, ACOs that began participating in the Medicare Shared Savings Program on April 1, 2012, July 1, 2012, January 1, 2013, or January 1, 2014 will receive two types of payments:

  • An upfront, variable payment:  Each ACO receives a payment based on the number of its preliminarily prospectively-assigned beneficiaries.
  • A monthly payment of varying amount depending on the size of the ACO:  Each ACO receives a monthly payment based on the number of its preliminarily prospectively-assigned beneficiaries.

The structure of these payments addresses both the fixed and variable costs associated with making ongoing investments to improve care coordination for existing ACOs.

Recovery of ACO Investment Model Payments

For ACOs already participating in the Shared Savings Program, CMS will recover the ACO Investment Model payments through an offset of an ACO’s earned shared savings. ACOs selected to receive ACO Investment Model payments will enter into an agreement with CMS that details the obligation to repay ACO Investment Model payments.

If the ACO does not generate sufficient savings to repay the ACO Investment Model payments as of the first settlement for the Shared Savings Program, CMS will continue to offset shared savings in subsequent performance years and any future agreement periods, or pursue recovery where appropriate.

For ACOs new to the Shared Savings Program in 2015 and 2016, CMS will recover payments from earned shared savings for as long as the participant remains in the Shared Savings Program ACO. CMS will pursue full recovery of pre-paid shared savings from any ACO that does not complete its initial Shared Savings Program agreement period or the full term of the ACO Investment Model agreement.

Eligibility/Selection

The ACO Investment Model is expected to help provide support to organizations whose ability to invest in infrastructure and redesigned care processes would be improved with additional access to capital.

In order to be eligible for the ACO Investment Model, an ACO already participating in the Shared Savings Program must meet the following criteria:

1) The ACO must be accepted into and participate in the Shared Savings Program. The ACO’s first performance period in the Medicare Shared Savings Program must have started in 2012, 2013, 2014, or 2015 or will start in 2016.

2) If the ACO started in the Medicare Shared Savings Program in 2012, 2013 or 2014, it has completely and accurately reported quality measures to the Medicare Shared Savings Program in the most recent performance year, excluding ACOs that started in 2015 or that will start in 2016.

3) The ACO has a preliminary prospective beneficiary assignment of 10,000 or fewer beneficiaries for the most recent quarter, as determined in accordance with the Shared Savings Program regulations.  However, ACOs that started the Medicare Shared Savings Program in 2015 or will start in 2016, and are determined to be from a rural area using the application selection criteria, are permitted to exceed the 10,000 beneficiary assignment limit.

4) The ACO does not include a hospital as an ACO participant or an ACO provider/supplier (as defined by the Shared Savings Program regulations), unless the hospital is a critical access hospital (CAH) or inpatient prospective payment system (IPPS) hospital with 100 or fewer beds.

5) The ACO is not owned or operated in whole or in part by a health plan.

6) The ACO did not participate in the Advance Payment Model.

During the selection process, the ACO Investment Model will target new ACOs serving rural areas, areas of low ACO penetration, and existing ACOs committed to moving to higher risk tracks. CMS will also give preference to ACOs that provide high quality of care, achieved their financial benchmark, and demonstrate exceptional financial need.

Application Process

The application period for ACOs that started in 2014 and 2015 — or will start in 2016 — will open July 1st, 2015 and close July 31, 2015.

CMS staff will review applications for the applicant organization’s ability to meet criteria identified in the solicitation. All applicants are also required to be accepted into the Shared Savings Program, in accordance with program rules.

Participants

In the first round of applications for ACOs that started in the Medicare Shared Savings Program in 2012 and 2013, the ACO Investment Model has accepted six ACOs into the model.

Additional Resources

More information about the ACO Investment Model, including the Request for Application, is available on the Innovation Center website at http://innovation.cms.gov/initiatives/ACO-Investment-Model/.  Any questions about the program can be directed to AIM@cms.hhs.gov

For information about the Shared Savings Program, please see: www.cms.hhs.gov/sharedsavingsprogram/.

CMS Blog:   http://blog.cms.gov/2015/06/25/affordable-care-act-initiative-supports-care-coordination-in-rural-areas/

June 25, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Access All of CMS’ Sessions at HIMSS15

Visit the CMS eHealth Events page to access all of CMS’ HIMSS15 program sessions. An overview of each individual session can be found below.

Sunday, April 12

  • Opening Keynote: CMS on Federal Quality Reporting (Session QU1): Dr. Kate Goodrich, Director of the Quality Measurement and Health Assessment Group, outlines 2015 clinical quality measurement and reporting requirements and how they align with quality performance and public reporting through CMS quality programs.

Monday, April 13

  • CMS EHR Incentive Programs Overview (Session 10): CMS provides an update on EHR Incentive Programs participation and gives an overview of the Modifications to Meaningful Use in 2015-2017 proposed rule.
  • CMS Meaningful Use Stage 3 Requirements (Session 40): CMS presents an outline of the proposed Stage 3 requirements.

Tuesday, April 14

  • Keynote: The Intersection of Quality and Innovation at CMS (Session 67): Dr. Patrick Conway, Chief Medical Officer, outlines how CMS envisions health IT as a key component of health care transformation.
  • CMS Quality Strategy (Session 86): Dr. Kate Goodrich presents the overall quality strategy for CMS, and explains how it will be used to achieve the agency’s vision.
  • CMS Quality Reporting Update (Session 116): CMS discusses 2015 CQM reporting requirements and provides an overview of the PQRS, IQR, HVBP, and VBM quality reporting programs.

Wednesday, April 15

  • CMS Future Directions in Quality Measurement (Session 131):Panelists discuss current challenges and the future of quality measurement and quality measure development.
  • CMS Meaningful Use Stage 3 and ONC 2015 Edition Certification Criteria Changes (Session 160): CMS and ONC provide an overview of the Stage 3 and 2015 Edition Health IT Certification Criteria proposed rules.
  • Improving Health Care Delivery through Collaboration with Lean Tools (Session 176): Industry experts outline how Lean tools have led to cost savings, increased collaboration, and provide high quality products.
May 18, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Rule to Change MU Reporting Period to 90 Days is Issued

Today, CMS issued a new proposed rule for the Medicare and Medicaid EHR Incentive Programs to align Stage 1 and Stage 2 objectives and measures with the long-term proposals for Stage 3.

The modifications would allow providers to focus more closely on the advanced use of certified EHR technology to support health information exchange and quality improvement.

The new rule proposes a change in the reporting period for meaningful use from one year to 90 days in 2015.

Proposed Changes for EHR Incentive Programs
Together with the proposed Stage 3 notice of proposed rulemaking (NPRM) issued on March 20, 2015, the proposed rules align and merge the “stages” of meaningful use requirements.

The proposed rule changes the programs by:

  • Streamlining reporting by removing redundant, duplicative, and topped-out measures
  • Modifying patient action measures in Stage 2 objectives related to patient engagement
  • Aligning the EHR reporting period for eligible hospitals and CAHs with the full calendar year
  • Changing the EHR reporting period in 2015 to a 90-day period to accommodate modifications
April 10, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Hospitals Must Start Medicare EHR Participation in 2015 to Earn Incentives

Not participating in the Medicare EHR Incentive Program yet? 2015 is the last year for eligible hospitals to begin and still earn incentive payments.

To earn a 2015 incentive payment and avoid a 2016 payment adjustment, first-time participants should:

  • Begin their 90-day reporting period no later than April 1, 2015
  • Attest by July 1, 2015

Eligible hospitals that miss this deadline can still earn a 2015 incentive payment—and avoid the 2017 payment adjustment—if they begin their reporting period by July 1 and attest by November 30. However, they will be subject to the 2016 payment adjustment unless they apply and qualify for a hardship exception.

Hospitals that successfully attest in 2015 will also be eligible to earn a 2016 incentive if they continue to participate.

Eligible hospitals that begin participating after 2015 will not be able to earn incentive payments. They will also be subject to payment adjustments in 2016 and 2017.

Additional Resources
The EHR Incentive Programs website offers tools and resources to help eligible hospitals to successfully participate:

February 11, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

New EHR Attestation Deadline for Eligible Hospitals: December 31, 2014

I just got the following note from CMS about an extension to the EHR Attestation deadline for eligible hospitals. Here’s all the details:

CMS is extending the deadline for eligible hospitals and Critical Access Hospitals (CAHs) to attest to meaningful use for the Medicare Electronic Health Record (EHR) Incentive Program 2014 reporting year from 11:59 pm EST on November 30, 2014 to 11:59 pm EST on December 31, 2014.

This extension will allow more time for hospitals to submit their meaningful use data and receive an incentive payment for the 2014 program year, as well as avoid the 2016 Medicare payment adjustment.

CMS is also extending the deadline for eligible hospitals and CAHs that are electronically submitting clinical quality measures (CQMs) to meet that requirement of meaningful use and the Hospital Inpatient Quality Reporting (IQR) program. Hospitals now have until December 31, 2014 to submit their eCQM data via Quality Net.

Note: This extension does not impact the deadlines for the Medicaid EHR Incentive Program.

November 24, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

New Interactive Hardship Exception Tool for Eligible Professionals

Eligible professionals can now use CMS’ new interactive tool to help determine if they will avoid upcoming 2015 and 2016 Medicare EHR Incentive Program payment adjustments by demonstrating meaningful use, or if they should apply for a hardship exception.

If an eligible professional determines that they need to apply for a hardship exception, the application must be submitted by July 1, 2014CMS will review applications to determine whether or not a hardship exception will be granted. If approved, the exception is valid for one year.

Applying for Hardship Exception
When submitting hardship exception applications, entries must include supporting documentation that proves demonstrating meaningful use presented significant hardship.

CMS has posted hardship exception applications on the EHR website for:

Please read and follow the submission instructions on the application. Note that all required supporting documentation must be included at the time of submission. Completing your application online and submitting it electronically toEHRhardship@provider-resources.com, with all required supporting documentation, will reduce the application processing time. Please do not submit hand-written applications.

Hardship Exception Tipsheets
You can also avoid payment adjustments by successfully demonstrating meaningful use prior to the payment adjustment. Tipsheets are available on the CMS website that outline when eligible professionals must demonstrate meaningful use in order to avoid the payment adjustments.

June 18, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Eligible Professionals: Deadline to Submit Hardship Exception Applications Approaching

Here’s the latest email from CMS on the hardship exception deadline:

Are you a Medicare provider who was unable to successfully demonstrate meaningful use for 2013? CMS is accepting applications for hardship exceptions to avoid the upcoming Medicare payment adjustment for the 2015 reporting year.

Payment adjustments for the Medicare EHR Incentive Program will begin on January 1, 2015 for eligible professionals.

However, you can avoid the adjustment by completing a hardship exception application and providing supporting documentation that proves demonstrating meaningful use would be a significant hardship for you. CMS will review applications to determine whether or not you are granted a hardship exception.

CMS has posted hardship exception applications on the EHR website for:

Applications for the 2015 payment adjustments are due July 1, 2014 for eligible professionals.  If approved, the exception is valid for one year.

New Hardship Exception Tipsheets
You can also avoid payment adjustments by successfully demonstrating meaningful use prior to the payment adjustment. Tipsheets are available on the CMS website that outline when eligible professionals must demonstrate meaningful use in order to avoid the payment adjustments.

May 28, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Last Day for Medicare Eligible Professionals to Register for 2013 EHR Incentive

Today is the last day to register for the 2013 EHR incentive money. If you haven’t done so already, you’ll want to go and do that now. Unlike ICD-10, I don’t see this being delayed.

Here’s an email from CMS with details of the deadline:

If you are an eligible professional, today is the last day you can register and attest to demonstrating meaningful use for the 2013 Medicare EHR Incentive Program. You must successfully attest by 11:59 p.m. Eastern Daylight Time, to receive an incentive payment for your 2013 participation.

CMS extended the deadline for eligible professionals to attest to meaningful use for the Medicare EHR Incentive Program to allow more time for providers to submit their meaningful use data and receive an incentive payment for the 2013 program year.

Medicaid Eligible Professionals
Eligible professionals participating in the Medicaid EHR Incentive Program need to refer to their state deadlines for attestation information.

Payment Adjustments
Payment adjustments for eligible professionals will be applied beginning January 1, 2015, to Medicare participants that have not successfully demonstrated meaningful use. For more information, visit the payment adjustment tipsheet for eligible professionals.

You must attest to demonstrating meaningful use every year to receive an incentive and avoid a payment adjustment.

If you are only eligible to participate in the Medicaid EHR Incentive Program, you are not subject to payment adjustments.

Resources

Plan Ahead
Review important dates for the EHR Incentive Programs and all CMS eHealth programs using this Interactive Timeline.

March 31, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

New EHR Attestation Deadline for Eligible Professionals: March 31, 2014

I just got the following update to meaningful use deadlines from CMS:

CMS is extending the deadline for eligible professionals to attest to meaningful use for the Medicare EHR Incentive Program 2013 reporting year from 11:59 pm ET on February 28, 2014 to 11:59 pm ET March 31, 2014.

In addition, CMS is offering assistance to eligible hospitals who may have experienced difficulty attesting to submit their attestation retroactively and avoid the 2015 payment adjustment.

This extension will allow more time for providers to submit their meaningful use data and receive an incentive payment for the 2013 program year, as well as avoid the 2015 payment adjustment.

This extension does not impact the deadlines for the Medicaid EHR Incentive Program or any other CMS program, including the electronic submission for the Physician Quality Reporting System EHR Incentive Program Pilot.

February 7, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

McKesson and Meditech Named as First “Test EHRs” by CMS and ONC

CMS and ONC just announced the first two “Test EHRs” are McKesson and Meditech. Here’s the details of their announcement:

As part of our and CMS’ ongoing effort to improve interoperability among certified Electronic Health Records Technology (CEHRT), we are pleased to announce McKesson and Meditech are the first two “Test EHRs,” selected from among certified EHRs. We strongly encourage others in the EHR technology developer community to participate in the program to become a CMS designated test EHR.

Under Stage 2 of Meaningful Use transition of care objective measure #3 [PDF – 218 KB]eligible professionals (EPs) and eligible hospitals/critical access hospitals (CAHs) must either:

– Conduct one or more successful electronic exchanges of a summary of care document, with a recipient who has EHR technology designed by a different EHR technology developer than the sender’s.

Or

– Conduct one or more successful tests with the CMS designated test EHR during the EHR reporting period

ONC and NIST conducted a pilot that ran from September through November of last year to finalize the test procedures. The pilot participants were AthenaHealthMcKesson andMeditech.

To find out more about becoming a CMS designated test EHR, read the “EHR Technology Developers” section of the FAQs on becoming a CMS designated test EHR and the “Developer Participant Information for Cross Vendor Exchange” document.

I find it interesting that AthenaHealth was a pilot participant, but isn’t one of the official “Test EHRs.” I wondered what happened there. Looks like a lot of EHR vendors will be able to at least connect to McKesson and Meditech.

January 16, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.