Rules Issued for Accountable Care Organizations

APhA advances provider status initiative

ACO payment models and the path to accountability.

Determinants of success in Shared Savings Programs: An analysis of ACO and market characteristics

Last December, the Chronic Care Working Group (CCWG), a bipartisan collaboration of Senate Finance Committee members chaired by Senators Isakson (R-GA) and Warner (D-VA), released its policy options document.1 The CCWG had a formidable charge—to “analyze current law, discuss alternative policy options, and develop bipartisan legislative solutions” that increased care coordination across settings, streamlined Medicare payment while aligning incentives, facilitated high-quality care, produced better outcomes, and reduced growth in Medicare spending. The requirement that proposals be budget neutral or cost saving narrowed the choices. After reviewing more than 530 comments, the CCWG met with 80 stakeholder groups, ultimately recommending 24 options, including two that focused on improving the infrastructure of chronic care with better quality measures and more-accurate measures of cost for payment and computing shared savings. Of the proposals, 16 were for enhanced chronic care, with 11 focused on capitated payments (e.g., Medicare Advantage (MA)) or shared savings (accountable care organizations (ACOs), Independence at Home (IAH)) (Table 1). Despite government efforts to promote systems of care that feature cost containment strategies such as capitation (MA) or shared savings (ACOs), more than half of the 49 million Medicare beneficiaries continue to receive care from fee-for-service (Medicare A and B) providers, without spending constraints. Proposals to enhance care within traditional fee-for-service (FFS) Medicare were limited to new billing codes for high-intensity chronic care management, counseling regarding prognosis of serious illnesses, and limiting constraints on telemedicine for specific patient groups. There is wide recognition that Medicare spending is concentrated in beneficiaries with advanced chronic illness.2 Nearly half of FFS spending is for 5% of beneficiaries, the 1.7 million with annual spending exceeding $54,000 per person, compared with $9,900 for the average Medicare beneficiary. Recognizing where spending is concentrated is necessary but is only the first step toward creating targeted policy to advance high-quality care and reduce costs. Of the 34 demonstrations that CMS formally evaluated over the past 15 years,3 only two were substantially successful in reducing costs and increasing quality.4, 5 The main lessons from these demonstrations are not surprising. There is value in targeting high-cost beneficiaries and developing trusting human relationships where engaged patients and providers work toward common goals; there is significantly less cost savings and quality improvement in efforts where providers work by themselves, focus work on telephonic management, are disconnected from primary care, or focus merely on technology-assisted data acquisition and algorithm-driven care plans.4 Two notably successful FFS programs—Health Quality Partners and Massachusetts General Hospital (MGH)—relied on administrative fees to pay for provider time and additional personnel needed for managing complex patients. Both programs relied on engagement between care managers, patients, and providers; the MGH model embedded care managers in primary care practices. In contrast, patient-centered medical homes, despite a similar conceptual design, have had an uneven record in controlling costs, in part because of a less-targeted focus.6, 7 Several of CCWG's proposals favor expanding MA plan options and converting special needs plans (SNPs) to permanent status. These managed care organizations receive risk-adjusted capitation for each beneficiary, providing a strong incentive to actively manage their chronically ill members. A few provider–insurer organizations have proven effective at managing some of Medicare's frailest beneficiaries under capitation. Programs of All-inclusive Care for the Elderly (PACE), which typically operates small programs for 100 to 1,200 enrollees, now covering 34,000 frail elderly adults eligible for nursing facility care, and the Commonwealth Care Alliance dually eligible managed care organization (MCO) in Massachusetts are strong examples of effective care under a capitation model.8, 9 Although these organizations receive a risk-adjusted, capitated payment, the important feature is that providers and patients develop and manage the care plan in small groups. Another approach that has shown promise for these populations are Medicare shared savings programs (MSSPs), such as ACOs, which are also strongly incentivized, with rewards contingent on improving upon a risk-adjusted baseline cost target for assigned beneficiaries. CMS' evaluation of ACOs suggested that they saved $424 per beneficiary in their first year and $257 per beneficiary over 2 years.10 Several CCWG recommendations seek to make ACOs and other shared savings plans more accountable (e.g., by allowing prospective attribution by patients) and more flexible (e.g., broadening options to include nonmedical support services and relieving restrictions, such as the homebound status requirement for home health care.) The CCWG logic is clear—with a budget constraint, fewer of the rules to control overuse observed under FFS payment are needed, rules which may have perverse effects on outcomes and costs. Topping the CCWG's list of options is Independence at Home (IAH), a 3-year demonstration (2012–15) that Congress unanimously extended for 2 years in June 2015.11 The favorable initial published results are consistent with those of the successful Department of Veterans Affairs national Home Based Primary Care (HBPC) program12 and other published HBPC models.13-15 IAH rests on three precepts: focus on the most frail, immobile, and costly beneficiaries; use mobile interdisciplinary provider teams led by physicians and nurse practitioners responsible for their care and accountable across the health spectrum; and align incentives. IAH's novel approach to “shared savings with discipline” uses eligibility criteria identifiable in CMS administrative data,1 so that the savings baseline can be accurately calibrated. It allocates the first 5% of savings to CMS, after which there is an opportunity for shared savings, and IAH disqualifies practices that fail to achieve savings or to meet three of six quality metrics after 2 years. CMS found that IAH practices saved more than $25 million during the first performance year—an average of $3,070 per beneficiary—while delivering high-quality care. With 8,400 frail elderly adults enrolled, Year 1 savings were 7.7%, with nine of 17 (53%) practices achieving the 5% savings threshold (range $2,676–13,068/patient-year). For those nine practices, the average savings rate was 17%, with the top-performing practice reducing costs by 32%. Successful practices were broadly representative, coming from medium and large academic centers, and private for-profit and nonprofit corporate and community practices. Although IAH programs managed fewer than 1% of the number of individuals in the original 32 ACOs (Pioneer ACOs), IAH generated nearly 9% of the combined first year CMS savings of Pioneer ACOs and IAH.10 Unlike the two-sided risk in the Pioneer ACO model, in IAH, discipline comes from being disqualified and thus unable to share in substantial achievable savings. Using the 2012 Medicare 5% beneficiary file, it was estimated that 2.2 million Medicare beneficiaries meet IAH criteria,1 6.2% of all FFS beneficiaries, with 40% of the 5% most-expensive beneficiaries in 2012. Of all Medicare FFS beneficiaries, these individuals represented 23% of the deaths, 43% of Medicare readmissions, 37% of new long-term institutional stays, and 28% of FFS spending, validating the targeting criteria. Over the next decade, if home-based primary care through IAH reached only 35% of this population, maintaining the first year demonstration experience, it is likely that it would generate savings exceeding $35 billion, with CMS retaining more than $17 billion,16 which is within 3% of the estimated savings from applying VA's HBPC experience to 35% of the IAH-eligible Medicare population. The congruence of effectiveness between VA's national program and the CMS demonstration gives support to the estimate. Two of the CCWG's recommendations are crucial for cost containment in FFS Medicare, applicable to ACOs and IAH: developing more-accurate risk adjustment models for the highest-cost beneficiaries and developing appropriate quality metrics, with a focus on patient experience. The current system of risk assessment for ACOs relies on hierarchical condition categories (HCCs) to develop cost benchmarks.17 Analyses of beneficiaries similar to those qualified for IAH18 have confirmed other reports19 that current HCC models, calibrated on the entire Medicare population, substantially underpredict costs for a selected population, with mortality four times as great, costs five times as high, and more than half of beneficiaries joining a practice being clinically unstable at enrollment. HCC predicted costs also have wide geographic variation whereas frail beneficiaries are more similar cost-wise between low- and high-cost counties. In PACE, a combination of PACE rates, the PACE HCC model, and PACE frailty adjusters have effectively addressed these phenomena.8, 14 Similar recalibration of the HCC model to account for mortality risk, frailty, and local variability among individuals meeting IAH qualifying criteria is needed while incorporating a time-dependent clinical instability factor.18 Quality metrics offer a balancing force for shared savings incentives. In contrast to the large suite of measures for ACOs, the IAH demonstration used six quality measures to moderate savings shares: soliciting patient preferences; improving care transitions through home visits within 48 hours; including medication reconciliation after a hospitalization or emergency department visit; and validated, care-sensitive usage metrics (30-day readmissions, ambulatory care–sensitive hospitalizations, and emergency department visits). The National Home-Based Primary and Palliative Care Network is field testing additional metrics, particularly ones focused on patient and caregiver experiences.20 Effective, efficient chronic illness management requires making decisions about goals and value. The potential for shared savings to provide the needed constraint in FFS Medicare should foster the transition from volume to value while keeping the provider–patient relationship at the center, giving people care that they want and need. The CCWG's lead option, converting IAH to a Medicare benefit, will advance that transition, achieving the CCWG's goals of coordinating care across sites, aligning incentives, and improving outcomes while lowering costs. Conflict of Interest: The editor in chief has reviewed the conflict of interest checklist provided by the authors and has determined that the authors have no financial or any other kind of personal conflicts with this paper. Drs. Kinosian, Taler, and Boling are participants in the IAH Demonstration, as are the other 14 members of the IAH Learning Collaborative Writing Group. Drs. Kinosian, Taler, and Boling have provided testimony to CMS and the Senate Finance Committee's Chronic Care Working Group, as well as MedPAC, on the Independence at Home demonstration. Dr. Kinosian is a board member of the American Academy of Home Care Medicine; Drs. Taler and Boling are past board members. Author Contributions: Kinosian: design, analysis, manuscript preparation. Boling, Taler: design, manuscript preparation. Sponsor's Role: NA.

Provider status effort engaged on Capitol Hill

Increasing numbers of health systems and physician practices are considering formation of accountable care organizations (ACOs) to promote clinical integration and to create a potential revenue stream through shared savings. In large part, the ACO triple aim of improved experience of care, better population health and decreased cost is to be achieved by empowering primary care physicians who will be the “quarterbacks” for preventive care and care coordination and will serve as the main source of attribution for patients to an ACO. As competing ACOs are established within overlapping markets, an ACO’s success will be determined in large part by its ability to attract and retain a vibrant and effective primary care workforce, currently experiencing a national shortage. Although the potential for financial incentives through shared savings is one way in which ACOs can attract primary care providers, there is currently no agreed upon taxonomy for categorizing or evaluating shared savings distribution methodologies and their impact on primary care providers and organizational success. Herein we propose a taxonomy of shared savings decision-making and discuss four models for shared savings distribution that recognize the increasing importance of primary care within ACOs.

It Is a Good Time to Expand Your Circle!

Accountable Care Organizations and ESRD: The Time Has Come

In 2012, the Centers for Medicare and Medicaid Services (CMS) initiated the Medicare Shared Savings Program (MSSP) and Pioneer Accountable Care Organization (ACO) programs. Organizations in the MSSP model shared cost savings they generated with CMS, and those in the Pioneer program shared both savings and losses. It is largely unknown what hospital and environmental characteristics are associated with the development of CMS ACOs with one- or two-sided risk models. The aim of this study was to assess the organizational and environmental characteristics associated with hospital participation in the MSSP and Pioneer ACOs. Hospitals participating in CMS ACO programs were identified using primary and secondary data. The ACO hospital sample was linked with the American Hospital Association, Health Information and Management System Society, and other data sets. Multinomial probit models were estimated that distinguished organizational and environmental factors associated with hospital participation in the MSSP and Pioneer ACOs. Hospital participation in both CMS ACO programs was associated with prior experience with risk-based payments and care management programs, advanced health information technology, and location in higher-income and more competitive areas. Whereas various health system types were associated with hospital participation in the MSSP, centralized health systems, higher numbers of physicians in tightly integrated physician-organizational arrangements, and location in areas with greater supply of primary care physicians were associated with Pioneer ACOs. Favorable hospital characteristics were, in the aggregate, more important than favorable environmental factors for MSSP participation. MSSP ACOs may look for broader organizational capabilities from participating hospitals that may be reflective of a wide range of providers participating in diverse markets. Pioneer ACOs may rely on specific hospital and environmental characteristics to achieve quality and spending targets set for two-sided contracts. Hospital and ACO leaders can use our results to identify hospitals with certain characteristics favorable to their participation in either one- or two-sided ACOs.

Next Generation ACOs: CMS Increases Risks, Rewards

On January 10, 2013 the Centers for Medicare & Medicaid Services (CMS) announced that 106 Accountable Care Organizations (ACOs) will join the Medicare Shared Savings Program (MSSP). CMS reports that this brings the total number of MSSP ACOs to “more than 250” and that they cover up to 4 million Medicare beneficiaries. These new Medicare ACOs, though, only tell part of the accountable care story. ACO growth has also continued apart from the Medicare program with 428 total ACOs now existing in 49 states. Additionally, physician groups have overtaken hospital systems and have now become the largest backer of ACOs. Background Of The ACO Program Public sector. ACOs are health care entities intended to lower health care costs, improve quality outcomes and improve the experience of care. The premise of the ACO is that each of these results can be obtained by moving away from volume-driven fee-for-service based reimbursement toward payment models that reward care coordination and quality outcomes.

A 2016 survey from Deloitte found that half of physicians were unaware of important changes to the Medicare reimbursement policy that were set to begin on January 1, 2017, and thus questioned the readiness of hundreds of thousands of physicians expected to participate and meet certain performance criteria.1 For pathology, the Medicare reforms could have a $2 billion impact on the specialty during the next several years. All physicians will ease into the new requirements. For instance, with quality measures developed by the College of American Pathologists (CAP), pathologists can prevent a 2019 Medicare financial penalty by reporting on 1 quality measure in 2017. In future years, Medicare will require greater reporting and performance activity from all physicians and group practices in order to avoid decreases in reimbursement.With the expansion of health care fringe benefits during World War II, the advent of Medicare in 1965 under Title XVIII of the Social Security Act, and subsequent health care coverage programs under the control of the Centers of Medicare & Medicaid Services (CMS), the United States has seen a steep rise in health care expenditures. Currently, the CMS provides health care coverage for roughly 105 million beneficiaries at a cost of more than $1.1 trillion annually.2,3 In an effort to hold health care providers accountable for a portion of this increased cost, Congress created the Sustainable Growth Rate (SGR) formula in the Balanced Budget Act of 1997.4 Simplistically, the SGR was an adjustment factor applied to physician fee schedule (PFS) payments that was designed to ensure that the yearly expense per Medicare beneficiary did not exceed the growth in the Gross Domestic Product. However, implementation of this SGR-related PFS update was repeatedly delayed by Congress over the years (the "doc fix"), which eventually led to a potential 27.5–percentage point negative adjustment in PFS payment rates if an alternative to the SGR was not identified. These "doc fixes" also were a factor in the creation of quality pay for performance programs, the first being the Physician Quality Reporting System (PQRS). The PQRS, initially known as the Physician Quality Reporting Initiative, was created within the Tax Relief and Health Care Act of 2006 and made permanent within the Medicare Improvements for Patients and Providers Act of 2008.5,6 Subsequently, the Patient Protection and Affordable Care Act of 2010, commonly referred to as "Obamacare," established the Value-Based Payment Modifier (VBPM) program and the concept of Accountable Care Organizations (ACOs) through the Medicare Shared Savings Programs (MSSPs).7All of these programs had the intent of establishing accountability on the part of the health care provider for the quality and cost of care by linking these to payment. However, despite having these payment adjustment programs in place, the constant threat of a large SGR payment cut remained and made financial planning difficult for physician practices. Congress responded to this concern by passing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).8 This legislation was game-changing in that it terminated the never functionally implemented SGR formula, establishing a new framework for rewarding health care providers for better care, not merely more care, and made participation mandatory for all CMS-eligible clinicians (ECs) who wanted to avoid a negative adjustment to their Medicare Part B payments. Under MACRA, the last payment adjustment year related to the PQRS, VBPM, and Electronic Health Record Incentive program (Meaningful Use) will be in 2018, based on January 1, 2016, to December 31, 2016, reporting. In essence, this legislation has bundled all of the prior physician quality reporting programs into one, which the CMS has designated as its Quality Payment Program (QPP). More than 600 000 clinicians will now be reimbursed under the QPP. Initial reporting of metrics for this new program began January 1, 2017, and will close December 31, 2017, with payment adjustments related to this performance period starting in 2019.Within the QPP, there are 2 payment pathways—the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Model (APM). An EC during the first 2 years is defined by law as any physician, physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, or any group that includes such professionals and bills CMS for those professional services. In future years, CMS has indicated it anticipates expanding this EC definition. Pathologists at independent laboratories are also considered ECs. This latter point is an important change from the previous quality reporting programs from which they had been excluded, because they were considered Medicare suppliers. Here, we will further describe the details of these 2 payment pathways, based on the CMS's final rule (81 FR 77008), and what you and/or your practice need to do to avoid a potential penalty in 2019.9According to CMS calculations, most ECs will fall into the MIPS pathway. The ECs can be excluded from MIPS by participating in a qualified APM, by not exceeding the low-volume threshold of seeing fewer than 100 Medicare patients or billing CMS less than $30 000 in a year in part B payments on the physician fee schedule, or by being a first-time enrollee in CMS. Based on an EC's or a group's performance within 4 categories, an overall composite performance score (CPS) will be calculated. This CPS is what will be used to compare the EC or the group to the rest of those within the MIPS and determine the potential bonus or penalty they will receive. The potential impact on CMS payments in 2019 from MIPS performance in 2017 is ±4%: this increases to ±5% in 2020, ±7% in 2021, and then ±9% in 2022 and beyond. The performance adjustments are budget neutral, such that the total amount of penalties and bonuses will equal zero.The 4 categories within MIPS are—Quality, Clinical Practice Improvement Activities (CPIAs), Advancing Care Information (ACI), and Resource Use. The requirements within each category can change depending on whether or not an EC is considered "patient facing" or "non–patient facing." This distinction is critical because performance requirements can differ between the 2 groups. According to the 2016 final rule, a non–patient facing EC must bill 100 or fewer patient-facing encounters in a calendar year. For those in a group, 75% of the ECs must fall within the above definition in order for the group to be considered non–patient facing. According to CMS, ECs and groups will be notified of their classification at the start of each performance year. A final list of what qualifies as a patient-facing encounter is available at the CMS Web site (Quality Measure Encounter Codes; accessed January 24, 2017), but the ones most likely to affect pathologists include apheresis, bone marrow biopsy procedure, and evaluation and management CPT codes. Based on a preliminary analysis by CMS, most pathologists will be classified as non–patient facing.In order to ease transition into the new program, CMS has made several options available for reporting in 2017. In order to avoid a penalty in 2019, an EC or group simply must report something within one of the performance categories—for example, one quality measure, regardless of the number of cases—or attest to one CPIA, such as providing timely communication of test results. By simply reporting on one measure or activity, the EC and/or group will avoid the 4% downward payment adjustment in 2019. Other potential participation options include a partial year of reporting—meaning at least 90 days' worth of patient data—or a full year of reporting. Those that chose 1 of these 2 latter options would be eligible for a partial or a full bonus, respectively. The CMS has acknowledged that most small practices would be at a disadvantage and would likely have received a penalty in 2019 without these transition year rules.Within the Quality performance category, an EC or group must report on 6 applicable measures, or all that apply to them if they do not qualify for reporting 6 measures. Depending on the reporting mechanism, the reported data must be on at least 50% of their Medicare patients if done via claims reporting, or 50% of all their patients (regardless of payer) if using another reporting mechanism. For 2017, the CMS has maintained all 8 current CAP–developed quality measures (Table 1). There are other measures available that may apply to a limited number of pathologists and are only reported via a registry. If an EC is unsure if he or she qualifies for additional measures, the EC may contact CMS at the Quality Payment Program Service Center at 1-866-288-8292 or use the online measure tool on the CMS Web site (https://qpp.cms.gov/measures/quality; accessed January 4, 2017). Each applicable measure will receive a score ranging from 0 to 10 points depending on the EC's performance compared with others who reported on the same measure. If 6 measures were applicable to the EC, then a total of 60 points would therefore be available in this performance category. The CMS has classified the 2 lung cancer and the melanoma pathology reporting measures as "high-value" and outcome measures. There are potential bonus points available for reporting on the high-value measures.Of all of these performance categories, only the CPIA category represents a new pay-for-performance concept for CMS, where an EC is rewarded for activities such as care coordination, patient engagement, and safety. Within the final rule, there are 6 subcategories with a total of 92 medium- or high-weighted activities that could count toward obtaining the 40 points available in this performance category. As a non–patient facing EC, the EC or his or her group would need to attest to performing 2 medium-weighted or 1 high-weighted CPIA for a minimum of 90 days. In contrast, patient-facing ECs need to report 4 medium-weighted or 2 high-weighted CPIAs for full credit in this category. Some potential activities that pathologists may participate in are listed in Table 2. Reporting will be done via attestation, and future guidance is expected from the CMS regarding this process. Of importance is that those who report individually via claims will also have to attest individually for CPIA. This is in contrast to those reporting as a group, in which they would attest on 1 to 2 items as a group.The ACI performance category is, in essence, the Electronic Health Record Incentive Program (Meaningful Use). Historically, pathologists have been given an exemption from this program because the interoperability and information exchange measures within the program were not applicable to laboratory information systems (LISs). At least at the start of MIPS, it appears this exemption will continue, because non–patient facing clinicians will not be scored in this category. The CMS will reweight this category to zero for non–patient facing clinicians, and will reallocate the percentage value in this category to the Quality performance category in determining the CPS.Similarly, the Resource Use performance category will not be scored in 2017. Therefore, this category will be reweighted to zero for all ECs, with its percentage of the CPS also being reallocated to the Quality performance category. In the future, this performance category will be similar to the VBPM program but focused solely on claims-based cost calculation. The CMS will base the resource use score on the patients attributed to an EC. At least initially, it is anticipated that pathologists will not be eligible for patient attribution, and therefore would be ineligible for participation in this category.As previously mentioned, an overall CPS will be calculated based on the performance within each evaluable category and will range from 0 to 100. In 2019, those with a CPS higher than 70 will be eligible for a high-performance bonus. The initial proposed weighting of each category will be 60% of the CPS based on the Quality performance score, 15% based on the CPIA score, and 25% based on the ACI performance score. Resource use for the 2017 reporting year will be 0%. However, for non–patient facing ECs, the ACI category will not apply. Therefore, for most pathologists the CPS will be based solely on Quality (85%) and CPIA (15%).As a case example, a non–patient facing EC has 4 quality measures that apply to him or her, equating to 40 possible points within the Quality performance category. The EC reports on the 2 lung measures, the Barrett esophagus measure, and the colorectal cancer measure, and he or she receives a score of 36 out of 40 points. Plus, the EC receives 2 bonus points for the 2 high-value measures, for a final total of 38 out of 40 points. The Quality performance category would then contribute 81 points toward the CPS (38/40 × 85% = 81). Within the CPIA the EC reports on 1 high-weighted CPIA and receives the full 40 points within that performance category. This would lead to an additional 15 points (40/40 × 15%) toward the CPS, and a final CPS of 96 out of 100 points. In addition to likely doing well compared with other ECs, given a final CPS higher than 70, this EC would be eligible for a high-performance bonus as well.For the purpose of MIPS, there are several reporting options, which are the same as what was available for PQRS. These include claims-based, traditional registry, group practice reporting option, Electronic Health Record, measure groups, and the Qualified Clinical Data Registry (QCDR). Historically, pathologists have primarily used claims-based reporting, with a smaller percentage using a traditional registry, a group practice reporting option, or the Electronic Health Record. Measure groups do not apply to pathology, and until recently a QCDR was not available. The group practice reporting option is available to multispecialty group practices and uses a Web interface for transmitting data for prepopulated quality measures.Other new payment pathways within the QPP are designated as APMs. These are advanced APMs and physician-focused payment models (PFPMs). The APMs are systems that are meant to promote accountability for a patient population, improving care coordination and encouraging the delivery of high-quality care in a cost-conscious manner. Currently, there are no pathology-specific advanced APMs or PFPMs; however, several pathology practices, especially those in some academic and large multi-institutional groups, are participating in this pathway through their involvement in a specific type of ACO. A potential advantage of participating through an advanced APM pathway is that you are excluded from MIPS, and from 2019 to 2024 your entity will receive an automatic 5% bonus. Additionally, starting in 2026, the physician fee schedule update will be 0.75%, as opposed to only 0.25% from those ECs in the MIPS pathway.Advanced APM encompasses MSSP tracks 2 and 3, Next Generation ACO model, Oncology Care model, Comprehensive End Stage Renal Disease model, and Comprehensive Primary Care+ in 2017. These models differ from some other traditional ACOs and MSSP track 1 in that there is substantial financial risk to the entity. These entities must report on measures that are comparable to MIPS, use certified Electronic Health Record technology, and carry substantial financial risk (8% or more of total Medicare revenue or 3% or more of expected Medicare expenditures). Additionally, these entities must meet a percent of revenue or patient threshold that increases each year (Table 3) in order to qualify as an advanced APM and therefore be exempt from MIPS. In 2018, the CMS may expand the program to include MSSP track 1+, a new voluntary bundled payment model, and the Comprehensive Care for Joint Replacement Payment model.The concept of PFPM was created within the MACRA legislation to foster the development of additional APMs for providers who might not be able to participate in existing pathways; however, no definition was provided. The CMS final rule first revealed the definition and fulfillment criteria. In a broad sense, a PFPM is an APM that must include Medicare beneficiaries, is anticipated to reduce cost and/or improve patient care, and closes an existing payment policy gap. The CMS did expand the definition to include nonphysician health care providers. Any group or entity may propose a PFPM by submitting a proposal to CMS with a projection of the anticipated size and scope of the PFPM; description of the burden of disease, illness, or disability on the target population; and an assessment of the financial opportunity. These proposals will be reviewed by the PFPM Technical Advisory Committee, which makes a recommendation to the Health and Human Services Secretary. The models accepted by the CMS will then undergo a process similar to that of other APMs, including public announcement, comment period, and request for applications.Additional information regarding the QPP can be found at https://qpp.cms.gov/ (accessed January 14, 2017). The history of such programs suggests that the MIPS requirements within each performance category will become more complex and demanding in future years. The thresholds have intentionally been set low at the start of the program to ease EC transition into the program and to minimize disruption to the delivery of health care. As ECs become more familiar with the program, reporting requirements will likely increase. Another potential threat to pathology is the retirement of our high-performing measures by the CMS. As a whole, pathology has done well within the PQRS program. The quality gaps initially seen at the time of creation of the measure have diminished, and therefore the need for those measures from the perspective of the CMS is less pronounced. However, CAP is striving to maintain these measures because they ensure that the quality of care that best serves Medicare beneficiaries will be promoted within the pathology community. However, additional measures need to be created to facilitate all pathologists' compliance with the MIPS program. The creation of a pathology-specific QCDR with a broader menu of measures is one potential way to help the pathology community succeed within MIPS. The CAP is currently in the process of introducing such a registry to the medical community.Participation in an APM by a large number of pathologists is not likely at this time. Similarly, pathology practice will not readily lend itself to the development of PFPM, given the broad range of services provided and specialties with which we interact. Although pathologists' services influence a large percentage of spending, we do not directly control a large portion of the total cost of care; therefore, the risk may seem too great for pathologists to participate in these models. However, pathologists must continuously reassess how to best position ourselves for the future.In the short term, it is essential for ECs and/or their groups to be aware that by simply reporting anything in 2017 they will avoid a 4% penalty to the PFS in 2019. For the Quality performance category, this can most easily be done via claims-based reporting, traditional registry, or, if the EC is part of a multispecialty group, the group reporting option Web interface. Information about the pathology-specific quality measures can be found on the CAP Web site within the advocacy pages (http://www.cap.org/web/home/involved/advocacy/physician-quality-reporting-system; accessed January 14, 2017), or on the CMS Web site (https://qpp.cms.gov/measures/quality; accessed January 14, 2017). An alternative way to participate in 2017 to avoid the MIPS negative payment adjustment is to attest to performing a CPIA. A full list of improvement activities can be found at https://qpp.cms.gov/measures/ia (accessed January 14, 2017).The authors would like to acknowledge and express our gratitude to Charles Fiegl, BA, for his expert review of the manuscript.

Background Accountable care organizations (ACOs) aim to improve health care quality and reduce costs, including among patients with heart failure (HF). However, variation across ACOs in admission rates for patients with HF and associated factors are not well described. Methods and Results We identified Medicare fee-for-service beneficiaries with HF who were assigned to a Medicare Shared Savings Program ACO in 2017 and survived ≥30 days into 2018. We calculated risk-standardized acute admission rates across ACOs, assigned ACOs to 1 of 3 performance categories, and examined associations between ACO characteristics and performance categories. Among 1 232 222 beneficiaries with HF, 283 795 (mean age, 81 years; 54% women; 86% White; 78% urban) were assigned to 1 of 467 Medicare Shared Savings Program ACOs. Across ACOs, the median risk-standardized acute admission rate was 87 admissions per 100 people, ranging from 61 (minimum) to 109 (maximum) admissions per 100 beneficiaries. Compared to the overall average, 13% of ACOs performed better on risk-standardized acute admission rates, 72% were no different, and 14% performed worse. Most ACOs with better performance had fewer Black beneficiaries and were not hospital affiliated. Most ACOs that performed worse than average were large, located in the Northeast, had a hospital affiliation, and had a lower proportion of primary care providers. Conclusions Admissions are common among beneficiaries with HF in ACOs, and there is variation in risk-standardized acute admission rates across ACOs. ACO performance was associated with certain ACO characteristics. Future studies should attempt to elucidate the relationship between ACO structure and characteristics and admission risk.

Care plans are an evidence-based strategy, encouraged by the Centers for Medicare and Medicaid Services, and are used to manage the care of patients with complex health needs that have been shown to lead to lower hospital costs and improved patient outcomes. Providers participating in payment reform, such as accountable care organizations, may be more likely to adopt care plans to manage complex patients. To understand how Medicare accountable care organizations (ACOs) use care plans to manage patients with complex clinical needs. A qualitative study using semi-structured interviews with Medicare ACOs. Thirty-nine interviews were conducted across 18 Medicare ACOs with executive-level leaders and associated clinical and managerial staff. Development, structure, use, and management of care plans for complex patients at Medicare ACOs. Most (11) of the interviewed ACOs reported using care plans to manage care of complex patients. All care plans include information about patient history, current medical needs, and future care plans. Beyond the core elements, care plans included elements based on the ACO's planned use and level of staff and patient engagement with care planning. Most care plans were developed and maintained by care management (not clinical) staff. ACOs are using care plans for patients with complex needs, but their use of care plans does not always meet the best practices. In many cases, ACO usage of care plans does not align with prescribed best practices: ACOs are adapting use of care plans to better fit the needs of patients and providers.

Editor's note: For more on this topic, stay tuned for the upcoming June issue of Health Affairs, which features a series of articles on accountable care organizations. Accountable care is a relatively recent addition to the health care vernacular, but its roots can be traced to the decades-long effort to coordinate medical care. In the United States, health care has evolved into a fragmented pay-for-volume system which has both driven up cost and decreased quality. Coordination of care is meant to reverse this trend. Through such solutions as Health Management Organizations (HMOs), Integrated Delivery Networks (IDNs) and now Accountable Care Organizations (ACOs), policymakers, providers and payers have sought to consolidate and coordinate patient care. Contemporary care coordination efforts focus on accountable care which increases provider accountability for the cost and quality of care. The driving principle behind the formation of ACOs is the Institute for Healthcare Improvement’s triple aim: improving the patient experience of care, improving the health of populations and reducing the per capita cost of health care. One of the broadest applications of this concept is the creation of Medicare ACOs under the Patient Protection and Affordable Care Act. This includes the Pioneer ACO Program and the Medicare Shared Savings Program. More recently, states have also pursued ACO contracts to cover Medicaid populations. In the private sector, providers have forged ACO contracts with commercial payers. At the close of 2010, only 41 preliminary Accountable Care Organizations existed. The number of ACOs more than tripled to 138 a year after the passage of the PPACA. By 2012 the number nearly tripled again, and by the end of 2013 more than 600 ACOs were operating across the U.S.