Accountable Care Organization (ACO)

Accountable Care Organization (ACO)
Regulatory Analysis: Impact on Foot and Ankle Surgeons (DPMs)
As part of the Obama Administration’s reform of healthcare, Accountable Care Organizations
(ACOs) were formed to incent the delivery of high quality care by groups of doctors, hospitals, and
other health care providers. These practitioners come together voluntarily to give this coordinated
high quality care to the Medicare patients they serve, ensuring that patients, especially the chronically
ill, get the right care at the right time, with the goal of avoiding unnecessary duplication of services
and preventing medical errors. When an ACO succeeds in both delivering high-quality care and
spending healthcare dollars more wisely, it and its participants will share in the savings it achieves for
the Medicare program.

Medicare offers several ACO programs, including:
Medicare Shared Savings Programa fee-for-service program
Advance Payment Initiativefor certain eligible providers in the Shared Savings Program
Pioneer ACO Model population-based payment initiative for healthcare organizations and
providers already experienced in coordinating care for patients across care settings

Organizations across the country have already transformed the way they deliver care, in ways similar
to the ACOs that Medicare supports.

ACFAS Action: ACFAS provided comments in June 2011, to the original ACO draft regulations to
help ensure foot and ankle surgeons could participate in this important initiative and remain a viable
part of the healthcare team. Your ACFAS staff has analyzed the 696-page Accountable Care
Organization (ACO) final rules that were published in the November 2, 2011 Federal Register. The
Centers for Medicare & Medicaid Services (CMS) received over 1,320 comments on the proposed

ACO Final Regulations Highlighted: CMS adopted some of the recommendations ACFAS
suggested, but as intended, ACOs remain primary care and primary care physician focused and will
make up a majority of ACO governance structures. By design, specialists, such as foot and ankle
surgeons, will not have much of a role in ACOs.

Academic Healthcare Centers (AHCs) do not have much experience managing populations at risk,
so ACOs will likely be formed largely at the community hospital-level. Health policy experts point
toward existing provider-based risk-sharing organizations, like Kaiser-Permanente and Healthcare
Partners, who will shift their referral patterns in search of value. This will mean hospitals and health
systems in search of ACO-type arrangements will purchase advanced specialty care practices as a
commodity (offering best services at the best price) or bring in many tertiary procedures in-house
(complex surgeries are one example). Foot and ankle surgeons should pay particularly close attention
to these trends.

As part of the final rule, CMS adopted many of the recommendations submitted by healthcare
related organizations, including ACFAS. Key tenets of the final rule are:

1. Application Process CMS delayed the first start date to apply to be a recognized ACO
under Medicare until April 1, 2012 and provided for a second start date of July 1, 2012.
2. Beneficiary Assignment CMS will create a list of preliminary beneficiaries likely to receive
care from the ACO based on primary care utilization during the most recent periods for
which adequate data are available, and provide a copy of this list to the ACO. In addition,
CMS modified the methodology for beneficiary assignment. Under the final rule, if a
beneficiary cannot be attributed to a primary care physician, he or she will be assigned based
on primary care services provided by a specialist or another primary care provider (i.e. RN,
We believe DPMs acting in this capacity (providing primary care services
to a beneficiary) would be permitted to continue under the ACO regulations. DPMs
are still not officially included in the statutory definition of an ACO-provider,
however, the regulations speaks to the ability of ACOs to “add or subtract from their
care providers” based on the beneficiaries individualized care plan sand whether or
not they have an existing primary care physician.

3. Marketing Guidelines CMS is allowing marketing materials and activities to be used or
conducted five business days following their submission to CMS as long as the ACO
certifies compliance with applicable marketing requirements. CMS plans to issue template

4. Quality Measures CMS reduced the number of measures from 65 to 33.Quality
measurement will rely heavily on electronic healthcare records and its integration with quality
measurement. But
ACO participants can use survey-based measures, claims and
administrative data based measures, and the group practice reporting options web interface
as a means of ACO quality data reporting for certain measures. There are four domains of
quality measurement:
Patient/Caregiver Satisfaction;
Care coordination/patient safety;
Preventive health
At-risk populations (a place for DPMs who treat the diabetic foot).
5. Payment to Providers
Downside risk CMS revised the one-sided model for smaller populations with more
variation in expenditures to be a shared savings only model. The two-sided model
targeted for larger populations with set expenditures, allows participants to earn a greater
percentage of shared savings than the one-sided model.

Eliminate withholding CMS eliminated both the 25 percent withholding requirement
and the provision concerning forfeiture.

Increasing cap on shared savings CMS raised the payment limit from 7.5 to 10
percent of an ACO’s updated benchmark for ACOs under the one-sided model and
from 10 to 15 percent under than two-sided model.

6. Start-Up Costs The Center for Medicare and Medicaid Innovation (CMMI) released the
Advanced Payment Model initiative for two types or rural and physician-owned
organizations participating in the Shared Savings Program. This should assist the
organizations with start-up costs.
7. Definition of a supplier DPMs are included and the final rule makes some clarification on
the list of eligible providers and suppliers allowing DPMs to dispense durable medical
equipment with coordination requirements with the primary care provider (PCP).