Sander S. Florman, MD
The Charles Miller, MD Professor of Surgery
Director, Recanati/Miller Transplantation Institute
Mount Sinai Medical Center
Accountable Care Organizations (ACOs) are programs designed by the Center for Medicare and Medicaid Innovation (CMMI) under the Affordable Care Act (ACA) to decrease health care costs while improving the quality of care.
An ACO is composed of a group of providers (e.g., physicians and/or hospitals) that are contracted with Medicare to participate in the Medicare Shared Savings Program. If they can successfully reduce the costs of care for the group of patients they treat while maintaining pre-specified quality targets, they are then eligible to split the savings with Medicare.
Patients do not enroll in an ACO; rather, the ACO is held accountable for the patients attributed to them based on which patients they treat. There can be no marketing to patients or cherry picking—patients are assigned to an ACO by Medicare based upon their using one of the ACO physicians for the plurality of their primary health care needs (or using a specialist physician who is a member of the ACO for their health care needs if no primary care physician is identified). While patients cannot opt out of having their costs counted toward an ACO, they can decline to share their claims data with the ACO.
Once assigned, Centers for Medicare and Medicaid Services (CMS) divides an ACO’s patient list into four cost categories, understanding that these characteristics partially predict utilization and cost: dual eligible (e.g., Medicare and Medicaid) patients, disabled patients, aged non-dual eligible (e.g., average worker who ages into Medicare eligibility after 65 years of age), and End-Stage Renal Disease (ESRD) patients. Each category has a calculated average cost of care based upon a 3-year average cost for similar patients. This is the basis for determining whether spending has been reduced and savings have occurred during the ACO performance year.
Patients whose cost of care is very high (i.e., > 99th percentile in their assigned category) have their costs truncated at the 99th percentile for their specific patient group. This is intended to protect the ACO from failure due to outlier costs beyond their control. Not surprisingly, the costs for ESRD patients in an ACO will have a higher average annual spend rate as well as a higher truncation point than that for the other groups.
There are many benefits to ESRD patients inherent in the robust care coordination provided through an ACO. In addition to this essential care coordination, the benefits of transplantation are well established, yet there are complex implications for an ACO when their ESRD patients undergo successful transplants.
The costs of a transplant raise the expenditures for the ACO. Three months after transplant, however, these patients are reassigned by CMS from the higher-cost ESRD category into one of the three other patient pools with less costly peers. Post-transplant, these ESRD patients are much less expensive to manage due to not needing dialysis. These lower costs are not compared to what the patient would have incurred if not transplanted, but rather to expected costs if they’d never had ESRD at all. This means that the ACO sees less of the long-term cost savings of transplantation.
With accountability for costs and quality being driven into the health care system by programs such as ACOs, thoughtful consideration needs to be given to ESRD patient populations—especially in medical centers performing transplants—so that encouraging transplantation is central to care and payment models… from my perspective.
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