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● Think Tank Patrolling for dollars

How should your ACO gear up for ACA? By Rick Dana Barlow


ack in the 1990s during the Clinton Era of Healthcare Reform, just about every organization attempted to call themselves an integrated delivery network (IDN) because it was the in-thing to do and one way to

insulate some semblance of sovereignty from the growing tide of consolidation and convergence. Today, during the Obama Era of Healthcare Reform, the term IDN almost seems quaint as the industry huddles around this de- cade’s acronym du jour – ACO for Accountable Care Organization. Where IDNs could bleat contently around the marketing

prospects of the term’s fuzzy defi nition, ACOs cannot. After all, “accountable” is part of the name and defi nition – it’s more acutely black and white than the gray interpretation of “integrated.” T is means you have to own up to your performance in clinical, fi nancial and operational areas, as well as generate high enough scores on sub- jective patient satisfaction surveys, all of which aff ect reimbursement under the Accountable Care Act guidelines and rules. In short, ACOs seem to be shaping up as super-charged IDNs with expenses more tightly managed, revenues more closely and directly tied to outcomes, clinical decisions and procedures striving

HMT: What are some of the challenges ACOs face in trying to set up an integrated or interfaced fi nancial system that links all of its “member” facilities – particularly if you feel they need to integrate or interface these fi nancial systems?

Jim Lacy, CFO and General Counsel, ZirMed

Clearly, some level of integration needs to take place among participants to share info on claims and remit info and associate them with the episode of care, but there are several reasons that the dream of having care integrated for all

patients is just a dream: • ACOs need to provide care and submit claims and reconcile payments across multiple venues in real time, and fi nancial systems don’t operate in real time. T ey operate retrospectively.

• ACOs are going to be a mix of entities that are owned and not owned but allied with diff erent organizations in many cases. Forcing allies and partners to adopt a monolithic system with all other partners is impractical.

• T e process of gathering together relevant claims within an episode of care, receiving a single lumped remittance and then breaking it up and distributing to owned and un-owned entities is beyond the scope of most fi nancial systems.

• T e underlying concept of an ACO and bundled payment model doesn’t comprehend a clear end to the episode of care. Subsequent readmission or other complications can happen after

6 March 2014

for higher quality, and charges/prices more transparent and “reason- able.” One caveat is that they also agree to be held “accountable” for clinical and fi nancial outcomes, thereby closing the loop that IDNs discussed but really never put into practice. On the surface, the ACO structure seems easier on paper to

achieve than in practice, which tends to be one of the complaints cited for healthcare organizations switching out of the federal gov- ernment’s byzantine ACO project into other less-daunting models that strive to achieve on-par results. Still, a recent CMS benchmark study showed that roughly 47 percent of 114 Shared Savings Pro- gram ACOs reduced their actual spending by $380 million, an amount more than was projected, but that roughly two-thirds of that smaller group generated enough savings to qualify to retain a portion of it as a reward. To achieve such success, an ACO must surmount the complexi-

ties of developing a fi nancial system that incorporates many – if not all – of the disparate fi scal and performance measures of an ACO’s participating member organizations. Health Management Technology asked a small group of information technology executives for tips on how an ACO might accomplish this.

time has passed, claims have been submitted and remittance received. T is process adds another layer of complexity to the reconciliation of payment beyond the historical nature of the healthcare fi nancial system.

David Janotha, Industry Vice President, Healthcare, Axiom EPM

T e myriad of organizations that can become involved in the ACO, including hospitals, physician practices and home health organizations, will undoubtedly have a wide


range of fi nancial systems that they use, with varying structures that would not be easy to combine. Additionally, combining data from the member organizations without some value-added structuring is likely to lead to divisive strategies and blame when costs are considered less than optimal. T at being said, the nature of the ACO program dictates that it isn’t traditional fi nancial data that really needs to be linked. T e eff ectiveness of ACOs will depend on the ability to utilize a combination of fi nancial and clinical data integrated in a meaningful way.

Steve Tolle, Chief Strategy Offi cer, Merge Healthcare

As a part of ACOs, specialties – such as imaging, cardiol- ogy, behavioral health, etc. – exist in disparate systems within a hospital, whether inherited or best of breed, at some point. T ere lies a challenge in integrating the systems and managing networks more tightly for one seamless interaction between the diff erent depart- ments; currently hospital systems are looking to make sense of it all. In the case of imaging, average referral leakage results in $20 million annually. It comes down to breakdowns in referral coordination and the cost of this process.


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