Home Care Technology Report

Accountable Care Organization Advent Elicits Somber Forecast from Healthcare Finance Expert
CMS is two months late publishing a proposed rule for the implementation of Accountable Care Organizations (ACO), as directed by the Patient Protection and Affordable Care Act (ACA), the 2010 healthcare reform law.

"Do not assume ACOs are good news for home care.

—Vince Kuraitis

Once a proposed rule appears, the standard 60-day public comment period will begin, followed by another wait for the final rule. The ACA also specifies that CMS must be ready to begin paying ACOs by January, 2012. The federal agency is once again cutting things close to a Congressionally imposed deadline.

However long CMS takes to fulfill its obligations under the ACA, the question remains whether home care and hospice providers should be anxious for the day to arrive, or anxious about it. “Do not assume ACOs are good news for home care,” Vince Kuraitis told HCTR.

Principal and founder of Better Health Technologies, an Idaho healthcare consulting firm, Kuraitis has been a consultant to healthcare organizations at every level for 25 years, from hospitals to disease management companies to home care providers. He has been studying the evolution of payment bundling since it first entered the healthcare vocabulary more than two years ago. He spoke to us this week from his Idaho office.

“Bundling payments for services to Medicare beneficiaries through Accountable Care Organizations should not be evaluated as though it will merely be a new payment system,” Kuraitis explained. “It is primarily about meeting two goals, improving care quality and converting from paying for procedures to paying for patient outcomes.”

Currently, Kuraitis told us, healthcare payment systems in the U.S., both government and private, are about as backward as they can be. “Healthcare providers are given incentives to do as many procedures, offer as many services, as they can justify. They are paid for activities, not results. This is not only counter-productive, it’s nuts.”

Forcing the formation of ACOs and providing bundled payments to them will have the side-effect of producing a changed payment systems but Kuraitis urges healthcare providers not to focus on that aspect. “Medicare and Medicaid want to stop paying for procedures, for visits, or for episodes of care” he emphasizes. “They want to pay for the outcomes that result when there is coordination among every care locale that touches a patient.”

The issue is one with which Kuraitis should be familiar. His mission since founding his consulting company has been to help healthcare rid itself of care silos, independent practitioners who remain absorbed in their own world of procedures and prescriptions and documents and care plans and do not consider what happens to a patient in other care centers.

“That is exactly what ACOs will accomplish,” Kuraitis predicts, “and both CMS and Congress, plus insurance companies, are hoping for the same twin results, better outcomes at a lower price.”

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The action plan for home care and hospice providers today is to establish themselves as collaborators. With the rule likely to state that 5,000 patients is the minimum for establishing an ACO, home care providers must accept that, in their areas of service, hospitals will be the dog and they will be the tail. “The tail does not wag the dog,” he grins. "Cooperate, collaborate, make it known your agency is ready to partner with hospitals and large physician clinics. You may want to believe ACOs will be formed by communities coming together to work out a plan the will be best for patients but in the real world ACOs will be formed by whatever healthcare provider in the community has the power to grab control."

Specifically, he warns that the ACO system is likely to result in lower overall levels of care. As ACOs learn to carefully dole out finite pools of cash, they can be expected to behave much the same way managed care (HMOs, Medicare Advantage, etc.) controls service levels today. Ultimately, this will result in decreased demand for home care services and, quite likely, to a nationwide need for far fewer Medicare home care agencies.

Those post-acute providers that survive, Kuraitis frankly but grimly concludes, will be the ones with a history of quality outcomes, low rehospitalization rates and tight relationships with hospitals and dominant physician groups.