Accountable Health Care Organizations and the Neurologist

May 13, 2011

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Dr. Bruce Sigsbee

It is recognized that there are a number of systematic problems within the current health care delivery system. For the neurologist, one of the major problems is the gap in recognition of face-to-face patient care as compared to procedures. There is a well-recognized income gap between procedural and nonprocedural specialties. For health care policy makers, there are two major concerns. The first and most important is the escalating cost of health care, which continues to rise faster than inflation. It is a major contributor to federal spending for Medicare and Medicaid and accounts for 25 percent of federal dollars. There is also a concern about uneven quality of care provided in this country. Irrespective of political party, there is consensus that these two problems exist and something must be done to address these problems. Many of those in health care policy view the current payment system as so flawed that the only solution is a completely new way to compensate for health care services that emphasizes quality and avoids inappropriate or unnecessary utilization. The only option being discussed at a national level currently is the accountable health care organization (ACO).

ACOs will become part of the Medicare program by January 1, 2012. According to the Affordable Care Act (ACA), ACOs are "groups of providers of services and suppliers meeting criteria specified by the Secretary [of health and human services that] work together to manage and coordinate care for Medicare fee-for-service beneficiaries." The proponents of ACOs argue that institution of these entities will reduce utilization, reduce costs, and improve quality of the care delivered. Even the most vocal opponents of the ACA agree that some of the provisions are worth preserving and that costs need to be controlled, and most opponents to the ACA embrace ACOs. The implementation of ACOs will require substantial infrastructure including a large group of providers, substantial information technology to capture and analyze quality data, and the ability to organize and oversee the components. In other words, hospitals, physicians, long-term care, etc., will need to be part of the system.

Where does this leave neurologists? Currently less than 12 percent of physicians are in independent practice according to the Bureau of Labor Statistics. Based on a 2009 survey by the AAN, about 25 percent of neurologists are in solo independent practice. Given the lack of details about the function of ACOs, there are far more questions than answers. After lengthy delays, regulations defining ACOs were published in late March. At the time of this writing, the Academy is reviewing the regulations and preparing comments. We will present more information to members in the June issue of AANnews, and hope to be able to provide answers to such questions as: How does a solo practitioner develop the necessary infrastructure to participate? How does an independent group establish a contract with a large system that is participating in ACOs? Even if one is an employed physician, how will the bundle payments be divided among various physicians? Who will make that decision? What quality data will a neurologist need to record to meet the accountable components of the organization? Will this be an opportunity to reduce the gap in income between procedural and nonprocedural specialties?

I practice in the state of Maine where all the large hospital systems are well on their way to developing the necessary infrastructure for accountable health care organizations. It is likely that systems in your area are doing exactly the same. While typically anything that happens at the federal level changes only glacially, there is a distinct possibility that, at least in your local market, the payment for health care services could change rapidly. It is important to become informed as to what is happening and what you need to do to protect your practice and access to patients. On the other hand, it is important that you do not do something precipitously out of fear of being left out. For example, if you are considering becoming employed by a larger system, the provisions of the contract need to be reviewed carefully.

There are no guarantees that accountable care organizations will become the standard of compensation for medical services. However, it would be a mistake at this point to assume that they will not. Given the substantial financial pressures on private insurers, companies trying to provide care for their employees, state and federal government, and the perception that there are substantial variations in the quality of care delivered, there is substantial impetus behind controlling the rapidly escalating cost of the health care system and providing incentives to improve quality. You may not have the option of catching up later if you have been left out of the early phases of this process. Even if ACOs are not widely adopted, some other form of incentivizing payments other than volume will likely be increasingly integrated into payments. Preparation for ACOs will not be wasted. The Academy will review and comment on regulations defining ACOs and help prepare our members to understand their role with the new models.

Bruce Sigsbee, MD, FAAN
President, AAN