ACOs and the LTPAC physician

May 22nd, 2013 by Rod Baird

One of my recent blog posts discussed the differences between Place of Service 31 (SNF) and 32 (NF).  Since nothing in Medicare payment policy is simple, let’s add some complexity – Accountable Care Organizations (ACO).

Previously I’ve blogged on CMS’s inappropriate EHR Meaningful Use rules as they apply to the long-term care physician. The rules for ACOs feature a similarly obtuse view of that provider population.

 Most readers will rightfully ask what ACOs and nursing homes have in common. The answers are simple:

  • Evaluation and Management (E&M) services provided by primary care physicians (PCPs) in SNF/NF settings count as “attributable” encounters under ACO policies, and
  • ACOs consistently report that the most costly patients attributed to them have a SNF stay during the year.

 At its heart, the ACO concept defines a panel of primary care physicians and associated providers, and retrospectively assigns financial accountability for a patient population to ACO. Patients are associated by calculating the PCP group with the “plurality of care.” In plain language that means CMS looks at the Medicare claims history of the populations and decides which PCP (at the group level) gave the plurality of care. That physician’s group TIN (taxpayer ID #) becomes the entity to which the patient is attributed.

The ACO rules define primary care services as follows: “Final Decision: We are finalizing our proposal to define ‘primary care services’ in § 425.20 as the set of services identified by the following HCPCS codes: 99201 through 99215, 99304 through 99340, 99341 through 99350, the Welcome to Medicare visit (G0402), and the annual wellness visits (G0438 and G0439) as primary care services for purposes of the Shared Savings Program.”

 They proceed to describe the primary care physician as “a physician with a primary specialty designation of general practice, family practice, internal medicine or geriatric medicine.”

 So any E&M services provided to nursing home patients (HCPCS codes 99304-99318) by a PCP are counted for the purposes of determining ACO affiliation.

 That is a two-way street. Assume a LTC physician (group) provides the plurality of E&M services to a Medicare patient. Then:

  1. If that physician/group is part of an ACO, any patient entering the nursing home is a candidate for association with that ACO, and
  2. If the physician/group are not associated with an ACO, they can “de-attribute” a previously community dwelling Medicare patient from an ACO.
  3.  Consider that essentially 100 percent of Medicare patients entering a SNF do this following a hospitalization. Some ACOs think “capturing” this population is a good idea since the “acuity” of new SNF patients is quite high. I want to challenge this assumption.

 CMS assesses the “acuity” of Medicare patients using a combination of demographics (age, gender, etc.) and diagnoses (diagnosis codes submitted on Medicare Part A&B claims). These factors contribute to a Hierarchical Classification Code (HCC) score that is used to adjust Medicare Part C and Medicare Part D payments to insurers for community-based beneficiaries. A separate HCC table is maintained for institutionalized beneficiaries who are served by Medicare Part C ISNPs (Institutionalized Special Needs Programs – e.g. Evercare). The institutionalized population has a different risk adjustment profile (both higher and lower) for specific diagnoses.

 The ACO proposition features a “shared savings” if the actual costs of care for the assigned population are below what is expected for using a risk adjusted benchmark. It is difficult to believe that the world’s best ACO/physician management system can manage a SNF/NF patient population’s actual cost to be below a calculated benchmark when 100 percent of the new patients join with a hospital stay on the books.

 Some of the country’s largest LTC physician groups and their professional organizations are petitioning CMS to revise the ACO regulations. The objective: Remove E&M encounters performed in a skilled nursing facility (POS 31) from those counting toward ACO “attribution.” The argument, which I support, is that patients in POS 31 are “short term.” While the LTC physician is providing primary care to the beneficiary during his stay, the relation is inherently short term. The objectives of care are different from those envisioned by the ACO concept – longitudinal care focusing on wellness, prevention and patient self-management.

 The typical SNF episode is approximately 30 days – a short period where the objective is to achieve rapid functional improvement/restoration and substitute for the community-based PCP. In cases where a community-based PCP doesn’t exist, the LTC physician and facility D/C planner are tasked with helping secure a transition to an appropriate “medical home.”

 That “medical home” isn’t necessarily the community; it could be a nursing facility, adult home/assisted living or congregate housing. Those are locations where LTPAC physicians actually become the permanent PCP for the individual.

 A future post will focus on how to construct an intelligent shared savings program that creates a successful path for both the LTPAC primary care provider, and the Medicare and Medicaid programs.

 Readers are encouraged to comment. The ACO payment rules are new and complex. I’d particularly appreciate hearing dissenting opinions. This is a topic we have debated in LTC physician forums multiple times.  Today’s blog reflects the current consensus opinion, but is subject to change.

Rod Baird

About Rod Baird

Rod Baird is the Founder and President of Geriatric Practice Management (GPM). Since 1977, he’s led provider and management organizations that deliver care to Medicare/Medicaid beneficiaries. Past programs he’s overseen include home health, personal care, hospice, rehabilitation hospitals, adult and psych daycare, alcohol/drug rehabilitation, industrial medicine and primary care practices. The Centers for Medicare and Medicaid Services (CMS) selected Baird as one of only 73 individuals to serve with its InnovationProgram. His educational background includes a Master’s Degree in Physical Chemistry from the American University, Washington, D.C.

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