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To assist readers in referencing sections contained in this preamble, we are providing a table of contents.
On March 23, 2010, the Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted. Following the enactment of Public Law 111-148, the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (enacted on March 30, 2010), amended certain provisions of Public Law 111-148. These public laws are collectively known as the Affordable Care Act. The Affordable Care Act includes a number of provisions designed to improve the quality of Medicare services, support innovation and the establishment of new payment models in the program, better align Medicare payments with provider costs, strengthen program integrity within Medicare, and put Medicare on a firmer financial footing.
With respect to quality improvement, the Affordable Care Act includes provisions to expand value-based purchasing, broaden quality reporting, improve the level of performance feedback available to suppliers, create incentives to enhance quality, improve beneficiary outcomes, and increase the value of care.
Value-based purchasing is a concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high quality, efficient clinical care. We have significant experience in developing, refining, and expanding health care quality performance measures through our experience with value-based demonstration efforts, noting some of these efforts later in the document, and various Medicare payment systems. For example, since 2005, we have applied the Hospital Inpatient Quality Reporting (IQR) Program under the hospital inpatient prospective payment system. Hospital IQR provides differential payments to hospitals that meet certain requirements, including publicly reporting their performance on a defined set of inpatient care performance measures. Beginning in 2007, under the physician fee schedule, we have provided for quality measure reporting through the Physician Quality Reporting System, which includes incentive payments for eligible professionals who satisfactorily report data on quality measures for covered professional services furnished to Medicare beneficiaries. In 2009, Congress passed the Health Information and Technology for Economic and Clinical Health (HITECH) Act. As part of the Electronic Health Records (EHR) Incentive Program under HITECH, we have defined measures for the meaningful use of certified electronic health records technology and have developed incentive payment programs for both Medicare and Medicaid providers. We have extended similar efforts to additional payment systems, including the hospital outpatient prospective payment system and various post-acute care systems.
In addition to improving quality, value-based purchasing initiatives seek to reduce growth in health care expenditures. It is widely recognized that the trajectory for the nation's health care spending is unsustainable. Medicare beneficiaries share in the burden of rising costs, as they pay higher premiums, and larger cost-sharing obligations and out-of-pocket expenses. The Affordable Care Act includes a series of reforms expected to significantly slow growth in the Medicare spending rate while simultaneously strengthening the care provided to Medicare beneficiaries. These reforms build upon existing value-based purchasing efforts currently underway within CMS to find ways to better coordinate care and reduce unnecessary services to lower the growth in Medicare spending while improving the quality of care received by beneficiaries.
We view value-based purchasing as an important step to revamping how care and services are paid for, moving increasingly toward rewarding better value, outcomes, and innovations instead of merely volume. In implementing these value-based purchasing initiatives, we seek to meet certain common goals, as follows:
• Improving quality.
++ Value-based payment systems and public reporting should rely on a mix of standards, processes, outcomes, and patient experience measures, including measures of care transitions and changes in patient functional status. Across all programs, we seek to move as quickly as possible to the use of outcome and patient experience measures. To the extent practicable and appropriate, these outcome and patient experience measures should be adjusted
++ To the extent possible, and recognizing differences in payment system readiness and statutory authorities, measures should be aligned across Medicare and Medicaid's public reporting and payment systems. We seek to evolve a focused core-set of measures appropriate to each specific provider category that reflects the level of care and the most important areas of service and measures for that provider.
++ The collection of information should minimize the burden on providers to the extent possible. As part of that effort, we will continuously seek to align our measures with the adoption of meaningful use standards for health information technology (HIT), so the collection of performance information is part of care delivery.
++ To the extent practicable, the measures used by the Shared Savings Program should be nationally endorsed by a multistakeholder organization. We should align measures with best practices among other payers and the needs of the end users of the measures.
• Lowering growth in expenditures.
++ Providers should be accountable for the cost of care, and be rewarded for reducing unnecessary expenditures and be responsible for excess expenditures.
++ In reducing excess expenditures, providers should continually improve the quality of care they deliver and must honor their commitment to do no harm to beneficiaries.
++ To the extent possible, and recognizing differences in payers' value-based purchasing initiatives, providers should apply cost reducing and quality improving redesigned care processes to their entire patient population.
As noted previously, the Affordable Care Act includes provisions to expand value-based purchasing, broaden quality reporting, improve the level of performance feedback available to suppliers, create incentives to enhance quality, improve beneficiary outcomes, and increase the value of care. Among these provisions, section 3022 of the Affordable Care Act requires the Secretary to establish the Medicare Shared Savings Program (Shared Savings Program), intended to encourage the development of Accountable Care Organizations (ACOs) in Medicare. The Affordable Care Act intends the Medicare Shared Saving Program to be a program “that promotes accountability for a patient population and coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.” The Shared Savings Program is a key Medicare delivery system reform initiatives that will be implemented under the Affordable Care Act and is a new approach to the delivery of health care aimed at: (1) Better care for individuals; (2) better health for populations; and (3) lower growth in expenditures. We refer to this approach throughout the document as the three-part aim.
Section 3022 of the Affordable Care Act amended Title XVIII of the Social Security Act (the Act) (42 U.S.C. 1395
Section 1899(b)(1) of the Act establishes the types of groups of providers of services and suppliers, with established mechanisms for shared governance, that are eligible to participate as ACOs under the program, subject to the succeeding provisions of section 1899 of the Act, as determined appropriate by the Secretary. Specifically, sections 1899(b)(1)(A) through (E) of the Act provide, respectively, that the following groups of providers of services and suppliers are eligible to participate:
• ACO professionals in group practice arrangements.
• Networks of individual practices of ACO professionals.
• Partnerships or joint venture arrangements between hospitals and ACO professionals.
• Hospitals employing ACO professionals.
• Such other groups of providers of services and suppliers as the Secretary determines appropriate.
Section 1899(b)(2) of the Act establishes the requirements that such eligible groups must meet in order to participate in the program. Specifically, sections 1899(b)(2)(A) through (H) of the Act provide, respectively, that eligible groups of providers of services and suppliers must meet the following requirements to participate in the program as ACOs:
• The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service (FFS) beneficiaries assigned to it.
• The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period.
• The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments for shared savings to participating providers of services and suppliers.
• The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare FFS beneficiaries assigned to the ACO. At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the Shared Savings Program.
• The ACO shall provide the Secretary with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements, and the determination of payments for shared savings.
• The ACO shall have in place a leadership and management structure that includes clinical and administrative systems.
• The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.
• The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans.
Section 1899(b)(3) of the Act establishes the quality and other reporting requirements for the Shared Savings Program. For purposes of quality reporting, section 1899(b)(3)(A) of the Act provides that the Secretary shall determine appropriate measures to assess the quality of care furnished by the ACO, such as measures of clinical processes and outcomes, patient and,
Section 1899(b)(4) of the Act prohibits duplication in participation in other shared savings programs by participants in the Shared Savings Program. Specifically, a provider of services or supplier that participates in any of the following is not eligible to participate in an ACO under the Shared Savings Program: A model tested or expanded under section 1115A of the Act that involves shared savings under this title, any other program or demonstration project that involves such shared savings, or the Independence at Home Demonstration under section 1866E of the Act.
Section 1899(c) of the Act provides the Secretary with discretion to determine an appropriate method to assign Medicare FFS beneficiaries to an ACO participating in the Shared Savings Program. This discretion is limited, however, by the fact that under the Act, assignment must be based on beneficiaries' utilization of primary care services provided under Medicare by an ACO professional who is a physician as defined in section 1861(r)(1) of the Act.
Section 1899(d) of the Act establishes the principles and requirements for payments and treatment of savings under the Shared Savings Program. Specifically, section 1899(d)(1)(A) of the Act provides that, subject to the requirements concerning monitoring avoidance of at-risk patients, payments shall continue to be made to providers of services and suppliers participating in an ACO under the original Medicare FFS program under Parts A and B in the same manner as they would otherwise be made, except that a participating ACO is eligible to receive payment for shared savings if the following occur:
• The ACO meets quality performance standards established by the Secretary; and
• The ACO meets the requirements for realizing savings.
Section 1899(d)(1)(B) of the Act establishes the savings requirements and the method for establishing and updating the benchmark against which any savings would be determined. Specifically, section 1899(d)(1)(B)(i) of the Act establishes that, in each year of the agreement period, an ACO shall be eligible to receive payment for shared savings only if the estimated average per capita Medicare expenditures under the ACO for Medicare FFS beneficiaries for Parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark. The Secretary shall determine the appropriate percent of shared savings to account for normal variation in Medicare expenditures, based upon the number of Medicare FFS beneficiaries assigned to an ACO. Section 1899(d)(1)(B)(ii) of the Act, in turn, requires the Secretary to estimate a benchmark for each agreement period for each ACO using the most recent available 3 years of per beneficiary expenditures for Parts A and B services for Medicare FFS beneficiaries assigned to the ACO. This benchmark must be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare FFS program, as estimated by the Secretary. Furthermore, the benchmark must be reset at the start of each new agreement period.
Section 1899(d)(2) of the Act provides for the actual payments for shared savings under the Shared Savings Program. Specifically, if an ACO meets the quality performance standards established by the Secretary, and meets the savings requirements, a percent (as determined appropriate by the Secretary) of the difference between the estimated average per capita Medicare expenditures in the year, adjusted for beneficiary characteristics, and the benchmark for the ACO may be paid to the ACO as shared savings and the remainder of the difference shall be retained by the Medicare program. The Secretary is required to establish limits on the total amount of shared savings paid to an ACO.
Section 1899(d)(3) of the Act requires the Secretary to monitor ACOs for avoidance of at-risk patients. Specifically, if the Secretary determines that an ACO has taken steps to avoid patients at risk in order to reduce the likelihood of increasing costs to the ACO, the Secretary may impose an appropriate sanction on the ACO, including termination from the program. Section 1899(d)(4) of the Act, in turn, provides that the Secretary may terminate an agreement with an ACO if it does not meet the quality performance standards established by the Secretary. Section 1899(e) of the Act provides that chapter 35 of title 44 of the U.S. Code, which includes such provisions as the Paperwork Reduction Act (PRA), shall not apply to the Shared Savings Program. Section 1899(f) of the Act further provides the Secretary with the authority to waive such requirements of sections 1128A and 1128B of the Act and title XVIII of the Act as may be necessary to carry out the Shared Savings Program. Section 1899(g) of the Act establishes limitations on judicial and administrative review of the Shared Savings Program. This section provides that there shall be no administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of the following:
• The specification of criteria under 1899(a)(1)(B) of the Act.
• The assessment of the quality of care furnished by an ACO and the establishment of performance standards under 1899(b)(3) of the Act.
• The assignment of Medicare FFS beneficiaries to an ACO under 1899(c) of the Act.
• The determination of whether an ACO is eligible for shared savings under 1899(d)(2) of the Act and the amount of such shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for Medicare FFS beneficiaries
• The percent of shared savings specified by the Secretary under 1899(d)(2) of the Act and any limit on the total amount of shared savings established by the Secretary under such subsection.
• The termination of an ACO under 1899(d)(4) of the Act for failure to meet the quality performance standards.
Section 1899(h) of the Act defines some basic terminology that applies to the Shared Savings Program. Specifically, section 1899(h)(1) of the Act defines the term “ACO professional” as a physician (as defined in section 1861(r)(1) of the Act) or a practitioner described in section 1842(b)(18)(C)(i) of the Act (that is, a physician assistant, nurse practitioner or clinical nurse specialist (as defined in section 1861(aa)(5) of the Act)). Section 1899(h)(2) of the Act defines the term “hospital” as a hospital (as defined in section 1886(d)(1)(B) of the Act.” (A “subsection (d) hospital” is a hospital located in one of the fifty States or the District of Columbia, excluding hospitals and hospital units that are not paid under the inpatient prospective payment system under section 1886(d)(1)(B) of the Act, such as psychiatric, rehabilitation, long term care, children's, and cancer hospitals.) Section 1899(h)(3) of the Act defines the term “Medicare fee-for-service beneficiary” as an individual who is enrolled in the original Medicare FFS program under Medicare Parts A and B and is not enrolled in a Medicare Advantage (MA) plan under Medicare Part C, an eligible organization under section 1876 of the Act, or a Program of All-Inclusive Care for the Elderly (PACE) under section 1894 of the Act.
Section 1899(i) of the Act provides that the Secretary may use either a partial capitation model or other payment model, rather than the payment model described in section 1899(d) of the Act, for making payments under the Shared Savings Program. Sections 1899(i)(2)(B) and 1899(i)(3)(B) of the Act require that any such model maintain budget neutrality. Specifically, these sections require that any such model adopted by the Secretary, “does not result in spending more for such ACO for such beneficiaries than would otherwise be expended for such ACO for such beneficiaries for such year if the model were not implemented, as estimated by the Secretary.”
Finally, section 1899(k) of the Act provides for an extension to the Physician Group Practice (PGP) demonstration: “During the period beginning on the date of the enactment of this section and ending on the date the program is established, the Secretary may enter into an agreement with an ACO under the demonstration under section 1866A, subject to rebasing and other modifications deemed appropriate by the Secretary.”
The intent of the Shared Savings Program is to promote accountability for a population of Medicare beneficiaries, improve the coordination of FFS items and services, encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery, and incent higher value care. As an incentive to ACOs that successfully meet quality and savings requirements, the Medicare Program can share a percentage of the achieved savings with the ACO. In order to meet the intent of the Shared Savings Program as established by the Affordable Care Act, we will focus on achieving, as our highest-level goal, the three-part aim, which consists of the following:
• Better care for individuals—as described by all six dimensions of quality in the Institute of Medicine report: Safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity;
• Better health for populations with respect to educating beneficiaries about the upstream causes of ill health—like poor nutrition, physical inactivity, substance abuse, economic disparities—as well as the importance of preventive services such as annual physicals and flu shots; and
• Lower growth in expenditures by eliminating waste and inefficiencies while not withholding any needed care that helps beneficiaries.
Under the Shared Savings Program, ACOs will only share in savings if they first generate shareable savings and then meet the quality standards. In the spirit of the three-part aim and the vision of always keeping the beneficiary in the forefront of all decisions, we believe that an ACO should embrace the following goals:
• An ACO will put the beneficiary and family at the center of all its activities. It will honor individual preferences, values, backgrounds, resources, and skills, and it will thoroughly engage people in shared decision-making about diagnostic and therapeutic options.
• An ACO will ensure coordination of care for beneficiaries regardless of its time or place. In an ACO, people will find that they no longer carry the burden of ensuring that everyone caring for them has the information they need. Beneficiaries will see that organizational teamwork improves their health care.
• An ACO will attend carefully to care transitions, especially as beneficiaries journey from one part of the care system to another.
• An ACO will manage resources carefully and respectfully. It will ensure continual waste reduction, and that every step in care adds value to the beneficiary. An ACO will be able to make investments where investments count, and move resources to meet beneficiaries' needs. Because of its capabilities with respect to prevention and anticipation, especially for chronically ill people, an ACO will be able to continually reduce its dependence on inpatient care. Instead, its patients will more likely be able to be home, where they often want to be, and, during a hospital admission, they receive assurance that their discharges will be well coordinated, and that they will not return due to avoidable complications.
• An ACO will be proactive by reaching out to patients with reminders and advice that can help them stay healthy and let them know when it is time for a checkup or a test.
• An ACO will collect, evaluate, and use data on health care processes and outcomes sufficiently to measure what it achieves for beneficiaries and communities over time and use such data to improve care delivery and patient outcomes.
• An ACO will be innovative in the service of the three-part aim of better care for individuals, better health for populations, and lower growth in expenditures. It will draw upon the best, most advanced models of care, using modern technologies, including telehealth and electronic health records, and other tools to continually reinvent care in the modern age. It will monitor and compare its performance to other ACOs, identify and examine new processes for care improvement, and adopt those approaches that are demonstrated to be effective.
• An ACO will continually invest in the development and pride of its own workforce, including affiliated clinicians. It will maintain and execute plans for helping build skill, knowledge, and teamwork.
As proposed in this notice of proposed rulemaking (NPRM), the Shared Savings Program encourages providers of services and suppliers to form ACOs that seek to achieve a three-part aim of better care for individuals, better health for populations, and lower growth in expenditures. The proposed
Since there is little comparative experience with implementing a Shared Savings Program and alternative payment models at the national level, we sought input on the impact of this proposed program from a wide range of external experts, including credentialed actuaries, clinical managers, and academic researchers on the potential impact of the program through, for example, the White House meeting, multiple listening sessions, Special Open Door Forum on ACOs, Workshop Regarding ACOs with CMS, OIG, and the Antitrust Agencies, and a Request For Information. Incorporating their input, we estimate that up to 5 million Medicare beneficiaries will receive care from providers participating in ACOs, many of which are located in higher cost areas, and that the program can have a significant impact on lowering Medicare expenditure growth. Furthermore, projections on the initial impact of the program by the Congressional Budget Office also suggest the Shared Savings Program could result in significant savings to the Medicare program.
We also believe that the Shared Savings Program should provide an entry point for all willing organizations who wish to move in a direction of providing value-driven healthcare. Consequently, in accordance with the authority granted to the Secretary under section 1899(i) of the Act, we are proposing for comment creating and implementing both a shared savings model (one-sided model) and a shared savings/losses model (two-sided model). Under this proposal, balanced maximum sharing rates under the two options to provide greater reward for ACOs accepting risk while maintaining an incentive to encourage ACOs not immediately ready to accept risk to participate in the one-sided model. This approach provides an entry point for organizations with less experience managing care and accepting financial risk, such as physician-driven organizations or smaller ACOs, to gain experience with population management in the FFS setting before transitioning to more risk.
We believe that ACOs electing to initially enter the one-sided model automatically transition to a two-sided risk model during the final year of their initial agreement. We also believe that a two-sided model that builds off a one-sided model could be offered as an option at the beginning of the program. We would immediately reward ACOs electing to enter the two-sided model with higher sharing rates available under that model. This approach provides an opportunity for more experienced ACOs that are ready to accept risk to enter a sharing arrangement that provides greater reward for greater responsibility. For more detail on the two-sided risk model refer to section II.G. of this proposed rule.
In addition to the opportunity to implement alternative payment models such as partial capitation under 1899(i) of the Act, the Center for Medicare and Medicaid Innovation (Innovation Center), created by the Affordable Care Act also has authority to test innovative payment models. As we gain experience with the shared savings model and alternative payment models, we will continue to refine and improve the program over time to make it increasingly effective in achieving our three-part aim of better care for individuals, better health for populations, and lower growth in expenditures. Finally, in developing the Shared Savings Program, and in response to stakeholder suggestions, we have worked very closely with agencies across the Federal government to develop policies to encourage participation and to ensure a coordinated and aligned inter- and intra-agency effort in the implementation of the program. The result of this effort is the release of several notices with which potential participants are strongly encouraged to become familiar. Detailed descriptions of these notices appear in section II.I of this proposed rule, and include: (1) A joint CMS and DHHS OIG Medicare Program; Waiver Designs in Connection with the Medicare Shared Savings Program and the Innovation Center; (2) an Internal Revenue Service (IRS) notice soliciting comments regarding the need for additional tax guidance for tax-exempt organizations, including tax-exempt hospitals, participating in the Shared Savings Program; and (3) a proposed Antitrust Policy Statement issued by the FTC and DOJ (collectively, the Antitrust Agencies).
The Affordable Care Act intends to improve quality and make health care more affordable through the Shared Savings Program as well as through other provisions. There are four programs authorized by the Affordable Care Act discussed later in the document which may affect Shared Savings Program policy or help to guide future Shared Savings Program policy, or may intersect with the Shared Savings Program in other ways.
Section 1115A of the Act, as added by section 3021 of the Affordable Care Act, required the establishment of the new Innovation Center not later than January 1, 2011 to test innovative payment and service delivery models to reduce program expenditures under Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) while preserving or enhancing the quality of care furnished to beneficiaries under these programs. In selecting such models for testing, the statute requires the Secretary to give preference to models that also improve the coordination, quality, and efficiency of health care services furnished under Medicare, Medicaid, and CHIP.
Section 1115A authorizes the Secretary to expand the duration and scope of a model being tested through rulemaking (including implementation on a nationwide basis) to the extent the Secretary—
• Determines expected expansion to reduce spending under the applicable title without reducing the quality of care or improve the quality of patient care without increasing spending;
• Obtains a certification from our Chief Actuary that such expansion would reduce (or would not result in any increase in) net program spending under applicable titles; and
• Determines that such expansion would not deny or limit the coverage or provision of benefits under Medicare, Medicaid, or CHIP.
Through the Innovation Center, we plan to explore alternative payment models for the Shared Savings Program. As we test and refine these models, gain operational experience, and put the necessary infrastructure in place to support program wide implementation, including critical monitoring and
Section 1866E of the Act, as added by section 3024 of the Affordable Care Act authorizes the Secretary to conduct a demonstration program to test a payment incentive and service delivery model that utilizes Independence at Home Medical Practices, which are comprised of physician and nurse practitioner directed home-based primary care teams, to provide services designed to reduce expenditures and improve health outcomes for certain Medicare beneficiaries.
Subject to performance on quality measures established for the demonstration, participating practices may be eligible to receive an incentive payment in the form of shared savings. In determining whether savings were generated, the Secretary shall establish an estimated annual spending target, for the amount the Secretary estimates would have been spent in absence of the demonstration, for items and services covered under Parts A and B furnished to applicable beneficiaries for each qualifying Independence at Home medical practice. A practice is eligible to receive an incentive payment if actual expenditures for the year for the applicable beneficiaries it enrolls are less than the estimated spending target established for the year. An incentive payment for each year shall be equal to a portion of the amount by which actual expenditures for applicable beneficiaries under Parts A and B for the year are estimated to be less than 5 percent less than the estimated spending target for the year.
Section 1945 of the Act, as added by section 2703 of the Affordable Care Act authorizes a State option under Medicaid to provide a health home for individuals with chronic conditions. The definition of the term “health home” is defined as a designated provider (including a provider that operates in coordination with a team of health care professionals) or a health team selected by an eligible individual with chronic conditions to provide health home services. Health home services are defined as comprehensive and timely high-quality services, including comprehensive care management; care coordination and health promotion; comprehensive transitional care, including appropriate follow-up, from inpatient to other settings; patient and family support (including authorized representatives); referral to community and social support services, if relevant; and use of health information technology to link services, as feasible and appropriate.
Under section 1945 of the Act, States pay the designated provider, team of health care professionals operating with such a provider, or health team for the provision of health home services to each eligible individual with chronic conditions that selects them as their health home. A State specifies in their State plan amendment the methodology it will use to determine payment for health home services. The methodology may be tiered to reflect, with respect to each eligible individual with chronic conditions, the severity or number of such individual's chronic conditions or the specific capabilities of the provider, team of health care professionals, or health team. A time-limited higher Federal Medicaid matching payment is available for health home services.
Section 3502 of the Affordable Care Act requires the Secretary to establish a program to provide grants to or enter into contracts with eligible entities to establish community based interdisciplinary, inter-professional teams (referred to in the statute as “health teams”) to support primary care practices, including obstetrics and gynecology practices, within the hospital service areas served by the eligible entities. These grants or contracts shall be used to establish health teams to provide support services to primary care providers and provide capitated payments to primary care providers as determined by the Secretary. For purposes of this section, primary care is the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of the family and community.
A health team established under a grant or contract must establish contractual agreements with primary care providers to provide support services. The team must support patient-centered medical homes, defined as a mode of care that includes—(1) Personal physicians; (2) whole person orientation; (3) coordinated and integrated care; (4) safe and high-quality care through evidence-informed medicine, appropriate use of health information technology, and continuous quality improvements; (5) expanded access to care; and (6) payment that recognizes added value from additional components of patient centered care.
Health teams must also collaborate with local primary care providers and existing State and community-based resources to coordinate—(1) disease prevention; (2) chronic disease management; (3) transitioning between health care providers and settings; and (4) case management for patients, including children, with priority given to those amenable to prevention and with chronic diseases or conditions identified by the Secretary. In collaboration with local health care providers, a health team must develop and implement interdisciplinary, interprofessional care plans that integrate clinical and community preventive and health promotion services for patients, including children, with a priority given to those amenable to prevention and with chronic diseases or conditions identified by the Secretary.
We have previous experience developing and implementing shared savings models through demonstrations. First, under section 412 of the Medicare, Medicaid, and CHIP Benefits Improvement and Protection Act of 2000 (BIPA), we implemented the Physician Group Practice (PGP) Demonstration in April of 2005—our first attempt at establishing a Shared Savings ACO model. The PGP Demonstration offered a unique payment model by which PGP providers received their normal Parts A and B FFS payments for services rendered and offered an additional performance payment for demonstrating “value.” The performance payments were tied directly to achieving targets for process and outcome quality measures as well as cost savings. The PGP Demonstration showed that physician-driven organizations are willing to engage in efforts to improve the overall quality and cost efficiency of care for the patient population they serve. Under the demonstration, the PGPs were accountable for a patient population to whom they provided the plurality of office-based evaluation and
Based on their experience with the PGP demonstration, participants identified several factors as critical to improving quality and the opportunity to share savings:
• An integrated organization with an environment that supports expending resources on multiple programs and initiatives to improve quality and reduce unnecessary services.
• Dedicated physician leadership with a proven ability to motivate physicians to participate in the development and implementation of quality improvement a