Ten Things You May Not Know About The Accountable Care Act

Ten Things Health Care Consumers May Not Know About the Accountable Care Act

The Accountable Care Act is perhaps the most meaningful of the 2010 health care reform mandates and a number of health care organizations have completed their first year in the program. This article highlights some of the consumer protection and cost cutting mandates and reveals the impetus for each element.

1-Application of evidence-based medical care, as a means to evaluate and pay for health services  

One of the results of the fifty-state, private payer national health care panorama is there are a lot of differences in patient care patterns, with some doctors ignoring the evidence based recommendations of national organizations, which result in disparate clinical outcomes. This means significant variances in patient deaths, re-admission rates for hospitalizations following treatment, and medical complications. An example of this phenomenon is in cardiac care, which has expanded the application of the very expensive cardiac pacemaker devices from the initial 1984 list of fifty-six diagnosis to the 2008 guidelines now at eighty- eight.[1] The problem with this robust expansion is scope-creep because only 5% of these recommendations are backed by the findings of “gold standard” randomized double-blind studies, which control for bias and are subject to rigorous scientific controls. To put it bluntly, many patients have received pacemakers for which the clinical research shows were not justified.

Cardiac device manufacturers like St. Jude Medical and Medtronic earn a tidy sum, roughly $7,500 for each pacemaker device, regardless of what the hospital receives in compensation and Medicare pays for most of these devices.[2] The medical device companies have earned between 48% and 20% net profits for years, meanwhile many hospitals  serving Medicare and Medicaid patients are starved for cash, as the current Medicare reimbursement model rewards the device makers and the cardiac specialist more than the hospital or the primary care doctor.

 The creation of the Patient Centered Outcomes Research Institute is an attempt to have an independent third party entity audit and recommend treatment practices based on scientific studies, especially for government funded health care programs. Many health care companies are outraged about this new agency oversight, but it is directly due to the opportunistic behavior of medical suppliers, specialists, and some hospitals at the expense of the health care system.

2-Creation of the Medical Home Criteria due to the over emphasis on specialty care while ignoring primary care

Facts of life in American health care include a plethora of specialists swarming over a patient in an acute care setting, but no one coordinating patient health over the care continuum. Medical schools produce more specialists than primary care providers now and the specialists earn a lot more money, which means political power in hospitals, medical associations, and in the beltway. By way of comparison, the mean income of cardiologists in 1987 was $271,555 versus less than $100,000 for primary care doctors, including family practitioners and pediatricians. Medicare is primarily to blame for this discrepancy as its reimbursement for clinical care has favored procedures and not time spent with patients. Ergo the doctor who spends the most time with the patient and may be the better practitioner will make less money.

3- Improved integration of patient care by observing key diagnosis and patient outcomes and paying people more for improved clinical performance

The Accountable Care Act links reimbursement payments from Medicare and Medicaid to clinical outcomes, in an attempt by the government to provide better stewardship of what we are getting for our health care investment. Specific conditions that the Accountable Care Act Shared Savings Program includes are: Chronic obstructive pulmonary disease (adult asthma), high blood pressure, heart failure, stroke, and diabetes. The ACO mandates attempt to assess clinical performance through a risk standardized assessment of chronic medical conditions, by reviewing hospital data, with the goal being the reduction in hospital admissions. In order to be eligible for the enhanced savings program the Centers for Medicare and Medicaid require hospitals which participate to report on the following metrics: patient caregiver experience, care coordination and patient safety, preventive health, and patient management for the at-risk population.

4-Accountable Care Act creates bundled payments for renal or kidney dialysis which is a cost containment measurement for this $78,000 per patient per year treatment, which is almost entirely paid for by Medicare.  

5-The Sunshine Act mandates disclosure of financial payments from medical device manufacturers and the pharmaceutical industry to health care providers.

The Sunshine Act, which is part of the Accountable Care Act mandates disclosure of financial payments from medical device manufactures (aka cardiac devices and orthopedic joints) and from the pharmaceutical industry to health care providers, including doctors and hospitals.[3] The highly profitable medical device industry has a practice of offering on-site bonuses for using their lucrative devices, which are now being prescribed for treatments which are not in compliance with evidence based treatment protocols.  So to assist the consumer, the government is attempting, through this mandate to shine a bit of light on conflicts of interest for treatment practices, so that you can make an informed decision on your procedure and where you have it done.

6-CMS, the government agency overseeing Medicare and Medicaid has established national performance metrics for key medical conditions which impact 80% of the national population. These benchmarks will establish a performance and reporting standard for all organizations, regardless of whether they choose to participate in the ACO Shared Savings Program. This new level of transparency will increase patient safety as better information becomes available to health care consumers.

7-ACO attempts to improve care for diabetes and heart disease patients

 By requiring 100% compliance with the six measures of clinical care, in order to achieve the increase in reimbursement under the Accountable Care Shared Savings Program, CMS hopes to stem the tide of these costly medical conditions. The measures of clinical care include; health status, health promotion and education, caregiver to patient communication, timely care, patient safety, and care coordination. This level of scrutiny is based on the drastic increase in disease prevalence and the need for the country to create a national intervention.

8-Establishment of the Independent Payment Advisory Board to reign-in health care overcharging

The Accountable Care Act has created the Independent Payment Advisory Board, which has broad authority to review and make recommendations for payment changes for health care services under Medicare. This is actually an aspect of the law that has great potential for cost containment authority, if congress will not capitulate to the powerful medical industrial lobby by refusing to deploy recommended changes. For example, why should cardiac device manufacturers continue to receive such exorbitant reimbursements at the expense of primary care services, so a realignment of payment could occur there. The point of the IPAB is to slow the growth of Medicare, which is presently escalating in an unsustainable fashion and everyone in Congress is in agreement on this factoid.

9-Savings Generated from the Accountable Care Act Will Shore-up the Medicare Trust Fund

The focus of the ACO mandates is to deliver better clinical outcomes and to reduce the long term trajectory of Medicare costs. Since Medicare is funded by payroll taxes and general funds, it is of concern to us all.

10-Accountable Care Act Increases Funding for More Fraud Auditors

Medicare fraud has been a problem since inception, because of entrepreneurial health care suppliers, clinicians, and hospitals. FYI the current Governor of Florida was at the helm of HMA, a large hospital chain when it was convicted of fraudulent Medicare billing, and he was asked to step down.[4] The Office of the Inspector General has found that for every dollar invested in fraud detection seventeen are recovered, yet a budget request for this in 2005, was denied by Congress(medical industrial lobbyists at work again).[5]

So the next time you are forced to listen to the grousing about the health care reforms and Obama care, just remember there are many consumer protection elements  which have the potential to transform the health care paradigm in this country and that is precisely what we need.

Feel free to share this article, written by Roberta E. Winter, MHA, MPA, and the author of Unraveling U.S. Health Care-A Personal Guide. http://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

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[1] Knocking on Heaven’s Door, Katy Butler, Scribner, a division of Simon & Schuster, 2013, chapter 12, p. 177, 2008 American College of Cardiology, Heart Rhythm Society, and the American Heart Association update for treatment guidelines.

[2] Knocking on Heaven’s Door, Katy Butler, Scribner, a division of Simon & Schuster, 2013, chapter 4, p. 64

[3] http://www.theatlantic.com/health/archive/2013/02/what-the-sunshine-act-means-for-health-care-transparency/272926/

[4] http://www.healthinsurance.org/blog/2013/06/13/medicare-fraud-and-for-profit-hospitals/

[5] It’s Enough To Make You Sick-The Failure of American Health Care and a Prescription for the Cure,  Jeffrey Lobosky, MD, Rowman & Littlefield, 2012, chapter 13, page 208