Assigning Patients to ACOs

A hotly contested area of the proposed ACO rules concerns the assignment of Medicare Fee-for-Service (“FFS”) beneficiaries to ACOs.  Once a Medicare beneficiary is assigned to an ACO, the ACO will then be held accountable “for the quality, cost and overall care” of that beneficiary.  The ACO may also qualify to receive a share of any savings that are realized in the care of these assigned beneficiaries due to appropriate efficiencies and quality improvements that the ACO may be able to implement.

As the final rule explains, assigning Medicare beneficiaries requires several elements:

1. An operational definition of an ACO, as opposed to a formal definition of an ACO, so that ACOs can be efficiently identified, distinguished, and associated with the beneficiaries for whom they are providing services;
2. A definition of primary care services for purposes of determining the appropriate assignment of beneficiaries;
3. A determination concerning whether to assign beneficiaries to ACOs prospectively, at the beginning of a performance year on the basis of services rendered prior to the performance year, or retrospectively, on the basis of services actually rendered by the ACO during the performance year; and
4. A determination concerning the proportion of primary care services that is necessary for a beneficiary to receive from an ACO in order to be assigned to that ACO, as compared to the proportion of primary care services from other ACOs or non-ACOs.

Patient Choice Alignment

The final rule is careful to highlight that the “assignment” of a patient to an ACO in no way limits the patient’s free choice regarding his/her healthcare providers.  Thus, the final rule states that CMS would characterize the process of patient “assignment” more as an alignment of beneficiaries with an ACO.  CMS uses the term “assignment” only to describe the operational process of beneficiary assignment; in this process, CMS will determine whether a beneficiary has chosen to receive a sufficient level of the primary care services from physicians associated with a specific ACO so that the ACO may be appropriately designated as exercising basic responsibility for that beneficiary’s care.

Communicating the Shared Savings Program to Patients

Because patients are free to choose their healthcare providers at any time, an important component of the Shared Savings Program will be timely and effective communication with beneficiaries concerning the Program.  The final rule acknowledges that it is essential to communicate with beneficiaries concerning the Program, their possible assignment to an ACO, and their retention of free choice under the Medicare FFS program.  Patient communication is addressed in more detail elsewhere in final rule.

Definition of “Medicare Fee-For-Service Beneficiary”

The final rule makes clear that the Affordable Care Act defines a “Medicare fee-for-service beneficiary” for the purposes of the Shared Savings Program as “an individual who is enrolled in the original Medicare fee-for-service program under parts A and B and is not enrolled in an MA plan under part C, an eligible organization under section 1876, or a PACE program under section 1894.”

However, CMS will allow assignment of dually eligible individuals to an ACO.  CMS has stated that it intends to study the effect of assignment of dually eligible individuals to ACOs.

Definition of Primary Care Services

The Affordable Care Act requires that beneficiary assignment can only be based on primary care services.  Beneficiary assignment cannot be based on other healthcare services, such as emergency services.  However, it is important to note that once a beneficiary is assigned based on primary care services, the ACO is then eligible to share in the savings it produces on all of the healthcare services it provides to that beneficiary.

In the final rule, CMS continued to use the definition of “primary care services” from section 5501 of the Affordable Care Act as its base definition of primary care services.  CMS also slightly expanded the definition to include the “Welcome to Medicare visit” and the annual wellness visits.  Additionally, CMS chose to include skilled nursing facility (“SNF”) visits in its definition of primary care services because SNF stays are long and it is reasonable to conclude that the types of services provided during a SNF stay would ordinarily be provided in physician offices if the beneficiaries were not residing in nursing homes.  Thus the following codes will constitute primary care services for purposes of assignment:

• HCPCS codes 99201 through 99215, 99304 through 99340, and 99341 though 99350.
• The Welcome to Medicare visit (HCPCS code G0402).
• The annual wellness visits (HCPCS codes G0438 and G0439).

In addition, as discussed below, CMS established a cross-walk for these codes to certain revenue center codes used by FQHCs and RHCs so that their services can be included in the ACO assignment process.

Consideration of Physician Specialties in the Assignment Process

Broadly, primary care services can generally be defined based on the type of service provided, the type of provider specialty that provides the service, or both.  CMS considered three options with respect to definitions of “primary care services” for purposes of patient assignment:

1. Assignment of beneficiaries based upon a predefined set of “primary care services;” or
2. Assignment of beneficiaries based upon both a predefined set of “primary care services” and a predefined group of “primary care providers;” or
3. Assignment of beneficiaries in a step-wise fashion where assignment would proceed by first identifying primary care physicians (internal medicine, family practice, general practice, geriatric medicine) who are providing primary care services, and then identifying specialists who are providing these same services for patients who are not seeing a primary care physician.

Ultimately, CMS concluded that the third option, the “step-wise” approach, provides the best available balance of maintaining a strong emphasis on primary care while ultimately allowing for assignment of beneficiaries on the basis of how they actually receive their primary care services.  Under this approach, beneficiaries are first assigned to ACOs on the basis of utilization of primary care services provided by primary care physicians.  Those beneficiaries who are not seeing any primary care physicians may be assigned to an ACO on the basis of primary care services provided by other types of physicians.  This final policy thus allows consideration of all physician specialties in the assignment process.

However, CMS added one additional complexity to the step-wise approach, which is the consideration of services provided by non-physician practitioners in the assignment process.

Consideration of Services Furnished by Non-Physician Practitioners in the Assignment Process

To factor in services provided by non-physician practitioners, CMS added to its step-wise assignment approach, as follows:

Step 1:  CMS will identify beneficiaries who had received at least one physician primary care service from a primary care physician who is a provider/supplier in an ACO.  In this step, a beneficiary can be assigned to an ACO only if he or she has received at least one primary care service from a primary care physician who is an ACO provider/supplier in the ACO during the most recent year (for purposes of prospective assignment), or the performance year (for purposes of final retrospective assignment).  If this condition is met, the beneficiary will be assigned to the ACO if the allowed charges for primary care services furnished by primary care physicians who are provider/suppliers of that ACO are greater than the allowed charges for primary care services provided by primary care physicians who are providers/suppliers of other ACOs, and greater than the allowed charges for primary care physicians who are unaffiliated with any ACO.

Step 2:  This step would consider only beneficiaries who have not received any primary care services from a primary care physician either inside or outside the ACO.  Under this step a beneficiary will be assigned to an ACO only if he/she has received at least one primary care service from any physician (regardless of specialty) in the ACO during the most recent year (for purposes of prospective assignment), or the performance year (for purposes of final retrospective assignment).  If this condition is met, the beneficiary will be assigned to an ACO if the allowed charges for primary care services furnished by ACO professionals who are ACO providers/suppliers of that ACO (including specialist physicians, NPs, PAs, and CNs), are greater than the allowed charges for primary care services furnished by ACO professionals who are ACO providers/suppliers of another ACO, and greater than the allowed charges for primary care services furnished by any other physician, NP, PA, or CNs, who are unaffiliated with any ACO.

Assignment of Beneficiaries to ACOs that Include FQHCs and/or RHCs

CMS found that FQHCs and RHCs should be allowed to participate in ACOs and have their patients assigned to such ACOs, provided that patients can be assigned in a manner that is consistent with the statute.  However, FQHC/RHC claims distinguish general classes of services but otherwise contain very limited information concerning the individual practitioner or even the type of health professional who provided the service.  CMS devised the following approach for obtaining the proper information from FQHCs/RHCs to allow for patient assignment:

• Identification of Primary Care Services Rendered in FQHCs and RHCs
  • In order to identify primary care services rendered in FQHCs and RHCs, that are primary care services, and that are not required to be reported by HCPCS codes, CMS will “cross walk” the primary care HCPCS codes to comparable revenue center codes based on their code definitions.  CMS will then use the revenue codes to determine primary care services rendered for purposes of patient assignment.
  • Identification of the Type of Practitioner Providing the Service in a FQHC/RHC
    • In order to properly identify providers for purposes of assignment, CMS will use the limited provider NPI information on the FQHC/RHC claims and will also require a supplementary attestation, as follows:
      • CMS will use the Attending Provider NPI field data which is “the individual who has overall responsibility for the patient’s medical care and treatment reported in this claim/encounter.”  However, this attending provider NPI is used to report the provider who is responsible for overall care, but it does not identify whether this provider furnished the patient care.
      • Therefore, to meet the requirement that assignment be based on services furnished by physicians, CMS will supplement the limited claims data described above with an attestation that would be part of the application process for ACOs that include FQHCs and/or RHCs.  The attestation required is a list of physician NPIs that provide direct patient primary care services.  Then, CMS will exclude from the assignment process the physician NPIs of physicians who have not attested to directly providing primary care services.  Once the proper physician NPIs are identified, CMS will proceed to its step-wise assignment approach described above.
      • Identification of the Physician Specialty for Services in FQHCs and RHCs
        • Virtually all services provided under the Medicare FQHC benefit are primary care services, and RHCs predominantly provide primary care services for their populations.  As a result, CMS concluded that physicians at FQHCs and RHCs function as primary care physicians and CMS does not need to obtain more detailed specialty information from these physicians.

In summary, CMS designed its final “step-wise” approach to maintain a focus on primary care while still allowing assignment of, and ACO responsibility for, beneficiaries based on the multitude of ways that patients actually receive primary care services.

Along with adjusting its beneficiary assignment approach, CMS adjusted its rule regarding the timing of assignment of beneficiaries. In its explanation, CMS debated whether to assign beneficiaries to ACOs prospectively, at the beginning of a performance year on the basis of services rendered prior to the performance year, or retrospectively, on the basis of services actually rendered by the ACO during the performance year.  CMS expressed a desire to allow ACOs to plan for their beneficiary populations and it ultimately struck a balance between incorporating an initial prospective assignment approach while also implementing a retrospective approach for final assignment of beneficiaries.