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MEETINGS / EVENTS

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November 08 - 09 2014, 12:00 AM - 12:00 AM

ASA Quality Meeting 2014

January 23 - 25 2015, 12:00 AM - 12:00 AM

ASA PRACTICE MANAGEMENT 2015

February 07 - 08 2015, 12:00 AM - 12:00 AM

ASA Certificate in Business Administration 2015

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FDA MEDWATCH ALERTS

October 20, 2014

Lidocaine HCI Injection, USP 10 MG Per ML, 30 ML Single-Dose, Preservative-Free, by Hospira: Recall - Particulate Matter

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FDA Medwatch Alert 10-20-14

October 16, 2014

FDA MedWatch - LifeCare Flexible Intravenous Solutions by Hospira, Inc.: Recall - Potential for Leakage

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FDA MedWatch LifeCare Flexible Intravenous Solutions by Hospira Inc

October 13, 2014

FDA MedWatch - CareFusion EnVe and ReVel Ventilators: Class 1 Recall - Power Connection Failure

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FDA MedWatch CareFusion EnVe and ReVel Ventilators

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ACO FAQs

On March 31, 2011, the Obama Administration released four proposed regulations and statements to implement the Medicare Shared Savings Program.  Accountable Care Organizations (ACO) are a central feature of the Shared Savings Program, which has its legislative basis in Section 3022 of the Affordable Care Act (ACA) of 2010.  In addition to proposing regulations to implement ACOs, the Administration also discussed waivers from existing self-referral, anti-kickback and civil monetary penalty statutes; issued a proposed policy statement on antitrust enforcement and ACOs; and issued a proposal on tax treatment of ACOs.

The ASA Ad Hoc Task Force on Accountable Care Organizations is carefully reviewing the proposed regulations with special attention to anesthesiology specific concerns, and will work with ASA staff and our elected leadership to recommend changes and clarifications of these complex proposals.

To help inform the membership of ASA about this new program, we have developed these Frequently Asked Questions which will be updated as new information becomes available.

1. What is the Medicare definition of an ACO 

2. Which entities are eligible to form an ACO?

3. Will ACOs be automatically accepted into the Shared Savings Program? 

4. How will ACO participants be paid? 

5. What quality standards will ACOs have to meet? 

6. Will ACOs have to meet any Health IT requirements?

7. How will cost benchmarks be determined?

8. Will ACOs be penalized for failing to meet cost benchmarks?

9. Why did CMS establish a minimum 2 percent threshold for shared savings and losses?

10. What minimum savings will ACOs have to achieve before they are able to share in savings?

11. How will Medicare beneficiaries be assigned to an ACO by CMS?

12. Can one participate in more than a single ACO?

13. Are there any requirements for patient notification?

14. What are the requirements for provision of data?

15. If a beneficiary obtains care from a provider participating in an ACO, is the beneficiary only allowed to see providers in that ACO?

16. What are the estimates for start-up costs of ACOs?

17. How does an ACO differ from a capitation insurance product, such as a Health Maintenance Organization (HMO)?

18. Is there a withhold to offset any losses that an ACO may experience?

19. Does CMS have any prior experience with a model similar to the ACO?

20. What must an ACO do to make money in this program?

21. Should an anesthesiologist participate in a Medicare ACO in their community?


1. What is the Medicare definition of an ACO 

An ACO is a network of providers under shared governance that work together to coordinate care for Medicare fee-for-service beneficiaries.  An ACO enters into a 3-year agreement with CMS and agrees to be held accountable for the quality and cost of care of Medicare beneficiaries that may be assigned to it.

2. Which entities are eligible to form an ACO?

The following entities are eligible to form an ACO as specified in the ACA:

 Professionals in group practice arrangements
• Networks of individual practices of professionals
• Joint venture arrangements between hospitals and professionals
• Hospitals employing professionals

The Secretary of Health and Human Services used her discretion to expand eligibility to certain critical access hospitals in the proposed rule.  Rural Health Clinics and Federally Qualified Health Centers cannot form ACOs independently but can participate in the ACO program by partnering with eligible providers.

3. Will ACOs be automatically accepted into the Shared Savings Program?

No.  ACOs will have to apply and sign an agreement with the Centers for Medicare and Medicaid Services (CMS) to participate in the program for a period of three years.  Applications will be accepted on an annual calendar year application cycle beginning January 1, 2012.  However, CMS is also considering a July 1, 2012 start date with a 3.5-year agreement for those providers that may not be ready to apply by January 1, 2012. 

4. How will ACO participants be paid?

ACO participants will be paid using traditional fee-for service claims filing.  In addition, ACOs may be eligible to share in overall savings compared to local historical benchmarks, provided the ACO meets certain quality requirements AND the savings exceeds a specified threshold (see below).

5. What quality standards will ACOs have to meet?

65 quality measures are proposed that span 5 quality domains of patient/caregiver experience (7 measures), care coordination (16 measures), patient safety (2 measures), preventive health (9 measures), and at-risk populations/frail elderly health (31 measures).  These quality measures are mostly directed towards primary care practitioners.  In the first year of the program, ACOs will only be required to successfully report to obtain shared savings.  In subsequent years, ACOs would have to meet targets in each quality domain (to be published by CMS at a later date).  Shared savings payments will be based on performance scores on quality measures and will be higher for higher scores.

ACOs that do not successfully meet quality performance standards will not be allowed to share in savings even if they are successful in reducing costs.

6. Will ACOs have to meet any Health IT requirements?

Yes. At least 50 perent of the primary care physicians in an ACO will have to be meaningful electronic health record users by year 2 of the ACO agreement.

7. How will cost benchmarks be determined?

Benchmarks will be based on the average per capita Medicare costs for assigned beneficiaries for the three most recent years prior to the beginning of the ACO agreement.  These costs include physician and hospital services as well as other costs paid for by the Medicare program. Benchmarks will be updated annually.  These benchmarks will reflect expenditures in the ACO’s local market and will be used to calculate the extent of savings generated by the ACO.

8. Will ACOs be penalized for failing to meet cost benchmarks?

Yes, losses may occur depending on the track chosen. CMS has established two tracks for shared savings in the proposed rule.  One track will allow ACOs to initially potentially share in savings without immediate risk of sharing in losses.  The maximum savings available is smaller in this track.  The other track allows for both shared savings and shared losses from the beginning of the program, but the upside potential for an ACO is greater.  Regulators anticipate that new ACOs, lacking an established track record in coordinating care and controlling expenses may choose the lower risk model, while established ACOs may opt for the higher return and higher risk approach.

Track 1 will allow ACOs to enter into a one-sided model initially (opportunity for shared savings only) and transition in year 3 to the two-sided model (exposure to shared savings and risk). Track 2 will allow ACOs to enter the two-sided model from the first year.  There would be no penalties associated with the one-sided model, and ACOs would be eligible to share a maximum 52.5 percent of the savings up to the maximum sharing cap of 7.5 percent of the ACO’s benchmark.

Under the two-sided model, ACOs would be eligible to share a maximum 65 percent of the savings they achieve in excess of a flat 2 percent minimum savings rate.  There is a maximum sharing cap of 10 percent of the ACO’s benchmark.  If an ACO fails to meet the benchmark, once the minimum loss rate of 2 percent is exceeded, first dollar losses will be capped at 5 percent in year 1, 7.5 percent in year 2, and 10 percent in year 3.

9. Why did CMS establish a minimum 2 percent threshold for shared savings and losses?

CMS believes that the threshold needs to be large enough so that random variation in expenditures from year to year does not trigger shared savings or losses.

10. What minimum savings will ACOs have to achieve before they are able to share in savings?

One-sided ACOs will have to generate savings in excess of the benchmark based on the size of the ACO varying from 2 percent in large ACOs to 3.9 percent in small ACOs.  Two-sided ACO models will have to achieve savings in excess of 2 percent of the benchmark regardless of the size of the ACO.

11. How will Medicare beneficiaries be assigned to an ACO by CMS?

Beneficiaries will be assigned retrospectively, i.e., CMS will determine which patients to assign to an ACO for the purposes of measuring performance at the end of each year.  Assignment will be based on where the beneficiary receives the plurality of primary care services.  Each ACO is required to have a minimum of 5,000 beneficiaries.

12. Can one participate in more than a single ACO?

Primary care physicians can only participate in a single ACO.  Specialty physicians, hospitals and other participants may participate in more than one ACO.

13. Are there any requirements for patient notification?

Yes.  Providers will have to inform beneficiaries that they are participating in an ACO by posting signs in their facilities and providing written information about the ACO.

14. What are the requirements for provision of data?

ACOs can request monthly claims data from CMS on potentially assigned beneficiaries.  However, beneficiaries can opt-out of this data sharing.

15. If a beneficiary obtains care from a provider participating in an ACO, is the beneficiary only allowed to see providers in that ACO?

No.  Beneficiaries are free to obtain care from any fee-for-service Medicare provider.  In addition, ACO participants are forbidden from inducing patients to only see ACO providers.

16. What are the estimates for start-up costs of ACOs?

Start-up costs are based on the Physician Group Practice Demonstration and are estimated at $1.7 million.  The actual range of costs for the PGP demo varied widely, and it should be noted that the PGP practices were already tightly integrated and had electronic health records in place.  The estimated start up costs noted by CMS may significantly underestimate the actual costs necessary to establish an ACO.  See below for more information on the PGP demonstration.  No federal funding is proposed to help offset ACO start-up costs.

17. How does an ACO differ from a capitation insurance product, such as a Health Maintenance Organization (HMO)?

The Medicare ACO program differs from capitation in several ways.  First, the participants still are paid based on fee-for-service, rather than from a fixed global payment.  Second, quality performance is an essential prerequisite for sharing in any savings.  Third, at least with the Track 1 model, the providers are not sharing in losses initially. Fourth, in both track 1 and track 2 models, both losses and profits are capped.

18. Is there a withhold to offset any losses that an ACO may experience?

There will be a flat 25 percent withhold by CMS of any shared savings.  The ACO will forfeit this withhold if the contract is terminated either by the ACO or by CMS.  Also, the proposed rule establishes other provisions to assure repayment of shared losses, including establishing lines of credit, recoupment of losses from future fee-for-service payments, and obtaining reinsurance.  These provisions must, at a minimum, be sufficient to account for 1 percent of per capita expenditures for the assigned beneficiaries.

19. Does CMS have any prior experience with a model similar to the ACO?

While the ACO program is new, it is based on the CMS Physician Group Practice (PGP) Demonstration that began in 2005 and ended in 2010.  The PGP Demonstration included 10 large physician group practices.  Taking into account average start-up costs of $1.7 million, all 10 participants lost money in the first three years of the program and needed savings of 20 percent over three years to break even.  After three years, only 6 out of the 10 participants had achieved the 2 percent savings threshold, excluding start-up costs.  Participants in the PGP Demonstration were eligible to share in savings once a 2 percent threshold was achieved and could share savings up to 80%.  Comparatively, ACOs will have to achieve a savings threshold of 2 percent to 3.9 percent depending on the size of the ACO before sharing in savings and are limited to sharing rates of 50 percent to 65 percent.  Please click here for an article published in the New England Journal of Medicine to learn more about the financial implications of ACOs and the PGP Demonstration.

20. What must an ACO do to make money in this program?

In order to become profitable, an ACO must reduce services while maintaining a specified level of quality.  Examples include: managing complex, chronically ill patients in the outpatient setting and minimizing hospitalizations; reducing or eliminating duplicative or unnecessary imaging or testing; and reducing procedures of uncertain/unproven value.  If these savings exceed the specified threshold, loss of fee-for-service income to the ACO as a whole will be offset to some extent by shared savings.  The ACO will determine how those shared savings are distributed within the organization.

21. Should an anesthesiologist participate in a Medicare ACO in their community?

These are proposed rules and are subject to change before ACOs begin operating in 2012.  The decision to participate will depend on local conditions and circumstances.  If the anesthesiologist is part of a multi-specialty group or health system that chooses to participate, then that anesthesiologist’s options will be limited.  It is likely that many communities will not have any Medicare ACOs at all, making the decision-making about participation straightforward.  The ASA Task Force on ACOs will be working to develop guidance for our membership on factors to consider in making this important decision if you are faced with an ACO in your practice setting.  This guidance will evolve as the government moves from proposed rule to final regulation.

The ASA Task Force has significant concerns about the proposed rule, including an overwhelming focus on chronic disease management, limited attention to the role of specialists in improving quality and controlling costs, the extensive costs involved in launching an ACO, limited opportunities for achieving a successful financial outcome and the excessively prescriptive nature of the regulations that will both hamper innovation and increase the cost of administering the program.