Policy & Regulation News

ACO payment reform proposed in new legislation

By Elizabeth Snell

- Two state representatives introduced legislation earlier this month in an effort to further advance the progress of Accountable Care Organizations (ACOs). Representatives Diane Black (R-TN) and Peter Welch (D-VT) explained in a joint statement that The ACO Improvement Act (H.R. 5558) will provide additional incentives that are focused on health outcomes, increasing collaboration between patients and doctors and providing ACOs with additional tools.

Moreover, the bill aims to steer healthcare provider reimbursement away from the fee-for-service model and instead will focus on how to improve patients’ health outcomes.

Value, not volume needs to be rewarded, according to Rep. Welch.

“Paying health care providers based on improvements in patient health rather than the number of procedures they perform is the way of the future,” Welch said. “Our legislation will advance these payment reforms and is based on the experience of ACOs in Vermont and around the country.”

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  • The bill will improve care coordination, increase efficiency and ensure that the patient receives the best care possible, according to Rep. Black. The ACO Improvement Act will do this by incentivizing providers to focus on improving health care outcomes instead of increasing the quantity of services provided, Black said.

    The ACO Improvement Act has an effective date of Jan. 1, 2016 and also has a provision that would build off of the ACO pilots proving capable of providing high-quality, well-coordinated care at a reduced cost for Medicare beneficiaries.

    “In carrying out subsection (c), the Secretary shall provide for a prospective assignment of Medicare fee-for-service beneficiaries before the beginning of a year to an ACO and primary care ACO professional in accordance with the practice under this section for Pioneer ACOs, subject to clause (ii),” the bill said.

    The bill also wants to improve care coordination through access to telehealth.

    “In applying section 1834(m) in the case of an ACO that has elected a two-sided risk model (as described in paragraph (1)), the ACO may elect to have the limitations on originating site (under paragraph (4)(C) of such section) and on the use of store-and-forward technologies (under paragraph (1) of such section) not apply,” the bill explained.

    Additionally, the proposed legislation contains provisions that would waive the three-day prior hospitalization requirement for skilled nursing facilities (SNFs) and the homebound requirement for home health services. There will also be relief from reviews of scheduled admissions by recovery audit contractors (RACs) for individuals attributed to an ACO when admitted by a physician participating in the ACO.

    H.R. 5558 would require the Department of Health & Human Services (HHS) to perform a demonstration project to identify payment benchmarks based on regional and socioeconomic factors. ACOs would also need advanced notification of their performance prior to each performance period. HHS would also need to determine how to provide electronic access to Medicare claims data to providers within a year of the bill’s enactment.