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Testing the Future of Accountable Care
David W. Saÿen, Regional Administrator
CMS San Francisco
September 23, 2011
CASA Annual Conference
Healthcare Innovation:
One Patient’s Story
Dedicated nurse
case manager for
high risk patients.
“The idea of the program is to keep me healthy, keep me out of the
hospital and keep costs down. I don’t think I would still be here without
this program. It has been my lifeline.” – Marie Jones
New York Times, June 21st 2010 An Insurer Pays more to Save
CMS Mission
CMS is a constructive force and a trustworthy partner
for the continual improvement of health and health
care for all Americans.
Measures of Success
Better healthcare - Improve individual patient experiences of care
along the IOM 6 domains of quality: Safety, Effectiveness,
Patient-Centeredness, Timeliness, Efficiency, and Equity
Better health - Focus on the overall health outcomes of
populations by addressing underlying causes of poor health,
such as: physical inactivity, behavioral risk factors, lack of
preventive care, and poor nutrition
Reduced costs - Lower the total cost of care resulting in reduced
monthly expenditures for Medicare, Medicaid or CHIP
beneficiaries by improving care
The Current System
• Greatest Acute Care in the World: People
come from around the world to be treated
• But: 46 million Americans lack coverage
• Uncoordinated – Fragmented delivery systems with
variable quality
• Unsupportive – of patients and physicians
• Unsustainable – Costs rising at twice the inflation
A Future System
• Affordable
• Accessible – to care and to information
• Seamless and Coordinated
• High Quality – timely, equitable, safe
• Person and Family-Centered
• Supportive of Clinicians in serving their
patients’ needs
Transforming Health Care
• We can invent our way to success
• We can improve our way to a sustainable, proud,
and excellent American health care system
• We can make health care more affordable for our
country by making it better for the people who
depend on it
• Better care will be, overall, less costly care
The Foundation for Healthcare
Transformation: Meaningful Use
Medicare/Medicaid incentives:
estimated $20 billion starting 2011
Reward the “meaningful use” of EHRs
(not the purchase of EHRs alone)
Physicians: $44,000/$63,750, with
penalties starting in 2015
Hospitals: $2M plus bonuses for higher
Medicare, Medicaid volume
Escalating requirements – 2011, 2013,
New Tools in the CMS Toolbox
• Medical Homes
• Hospital-Acquired Conditions (HAC) Payment Rules
• Value-Based Purchasing
• Reducing Fraud, Waste & Abuse
• Medicare and Medicaid Coordination Office
• CMS Innovation Center
• Medicare ACO Shared Saving Program
The Innovation Center
“The purpose of the Center is to test innovative payment and
service delivery models to reduce program expenditures
under Medicare, Medicaid and CHIP…while preserving or
enhancing the quality of care furnished…”
– “Preference to models that improve coordination, quality
and efficiency of health care services.”
• Resources - $10 billion in funding for FY2011 through 2019
• Opportunity to “scale up”: HHS Secretary authority to
expand successful models to the national level
The Innovation Center
Mission Statement
Be a constructive and trustworthy partner in identifying,
testing and spreading new models of care and payment
that continuously improve health and healthcare for all
Initial Programs
• Multi-Payer Advanced Primary Care Practice Demonstration
• Federally Qualified Health Center (FQHC) Advanced Primary
Care Practice Demonstration
• Medicaid Health Home State Plan Option
• State Demonstrations to Integrate Care for Dual Eligible
• Partnership for Patients
• ACO Initiatives: Pioneer, Advance Payment, Learning
Accountable Care
Accountable Care Organizations
• ACOs are one big step toward a new and better healthcare
– one of the most innovative tools provided by the
Affordable Care Act
• ACOs are not the status quo repackaged.
Grounded in the Three Part Aim: Better Care,
Better Health, Lower Costs
• Grounded in primary care.
• Focus on coordinated, seamless care.
• Able to manage information, with full attention to privacy.
• Accountable for what it does and what it achieves,
ensuring patients and families thrive, and that the care
they need is the care they get.
• Rewarded financially for success in lowering costs of
care, not by withholding care, but by improving care.
Focusing on Seamless, Coordinated Care
We have examples of health care organizations
showing that it works.
– Denver Health – saving a hundred million
dollars with better care, and having the lowest
case-mix-adjust mortality among 112
academic medical centers.
– Virginia Mason – pioneering with lean
production principles.
Balancing Competing Goals
• Defining parameters for ACOs requires balancing competing, important
– The need to return dollars to the Medicare Trust Fund vs. offering
care providers an attractive on-ramp to coordinated care.
– Cooperation among providers vs. the requirement to prevent
anticompetitive behaviors.
– Assuring high quality care vs. minimizing burden of quality reporting.
– Data sharing with ACOs vs. beneficiaries’ privacy needs.
– Speed, which our nation needs, vs. the time for learning, which many
providers need.
– Risks and rewards for both providers and for Medicare.
Understanding different stages
of readiness
• Different organizations are at different stages in their ability
to move toward an ACO model.
• We want to try to meet you where you are.
• Our hope is to offer models of participation to encourage
organizations across the spectrum of readiness to join in
and begin this work.
• We are looking for those organizations that are authentic
in their commitment to joining us on this path.
CMS ACO Initiatives
ACO Initiatives at CMS:
– Shared Savings Program
– Pioneer ACO Model
– Advance Payment Initiative
– ACO Accelerated Development Learning Sessions
The Shared Savings Program
• We received thoughtful and constructive comments ~
over 1200 in all.
• Appreciative of the healthy debate in the industry.
• CMS reviewed all official comments received to
construct the final rule.
• Publication of the final ACO Shared Savings rule later
this year.
The Pioneer ACO Model
• Designed for organizations that
– Are well on their way to changing care delivery and
business model
– Interested in being the leading edge
– Able to show the country what is possible
The Pioneer ACO Model
Key Features of the Pioneer ACO Model
Financial Gain – higher risk but larger reward for participating organizations
Payment Structure – population-based payment starting in the third year,
which gives providers flexibility
Flexibility in payment arrangements – While the Pioneer ACO Model
includes one payment arrangement, applicants are invited to propose
alternative payment arrangements that meet the parameters detailed in the
Payment Arrangements with Other Payers – Over 50% of total revenues
must be derived from outcomes-based contracts
Beneficiary Alignment – option of prospective alignment for their beneficiary
Length of Agreement - agreement period lasts up to five years
The Pioneer ACO Model
• The Innovation Center released a Request for Applications
(RFA) for the Pioneer ACO Model on May 17, 2011.
• Two part application process:
– Interested organizations submitted a Letter of Intent.
– Applications were due August 19, 2011.
• Appreciate the great enthusiasm for this ACO model from
the industry.
Advance Payment Initiative
The Innovation Center sought public comments on whether it should offer an
Advance Payment Initiative.
The Advance Payment Initiative would give certain ACOs participating in the
Medicare Shared Savings Program access to part of their shared savings up
ACOs would need to provide a plan for using these funds to build care
coordination capabilities, and meet other organizational criteria.
Advance payments would be recouped through the ACOs’ earned shared
Comments were due June 17, and the Innovation Center staff is currently
reviewing those comments and exploring various alternatives.
Accelerated Development
Learning Sessions
• The Innovation Center is offering ACO Accelerated Development
Learning Sessions for the leadership teams of existing or newly
emerging ACOs.
• The goal of these sessions is to prepare participants to:
– Understand their current readiness to become an ACO.
– Identify organization-specific goals for achieving the three-part aim
of improving care delivery, improving health, and reduced costs
through improvement.
– Begin to develop an action plan for establishing essential ACO
Accelerated Development
Learning Sessions
Registration is free for leadership teams from existing or newly forming
Four sessions in 2011
June 20-22 in Minneapolis
September 15-16 in San Francisco Bay Area, California
October – Philadelphia, PA area
November – Atlanta, GA area
All materials from the sessions will be publicly available
More information and registration available at
• Join us on this journey to provide coordinated,
seamless, reliable, and patient-centered care that is
rooted in health, grounded in primary care, and
economically sustainable.
• CMS wants to support your transformation and work
with you to improve care and reduce costs.
Thank You
How can we work together?
Contact Information
David W. Saÿen
Regional Administrator, San Francisco
Centers for Medicare & Medicaid Servicers
U.S. Department of Health & Human Services
90 Seventh Street, Suite 5-300
San Francisco, CA 94103
(415) 744-3501
[email protected]
Twitter: CMSGov

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