Health reform is still all talk

Despite ACO successes, legal challenges limiting a wider-scale adoption

May 07. 2012 3:00AM


There’s agreement all around that controlling health care costs is a No. 1 goal for both business and government.

But when it comes to actually putting a plan in action, the waters get much murkier. Consider the accountable-care organization, developed to coordinate medical care, engage patients in their own wellness, and ultimately improve health and control costs. Medicare recently approved a second round of 27 ACOs, including three in New Jersey, and health care payers and providers around the state are embracing the idea of cooperative care. But legal and other concerns have kept such programs from being adopted on a wider scale.

Currently, the Department of Human Services, which oversees Medicaid programs, is compiling the regulatory requirements for other providers to join the demonstration, with an eye to federal antitrust, kickback and fraud laws.

“We’re wanting and hoping these (will) be a bit more fluid, because these are really demonstrations. We want to explore how these are going to work for our most vulnerable populations — the Medicaid population is a very different population than the Medicare population,” said Allison DeBlois, chief of staff at New Jersey Health Care Quality Institute, which is managing the potential ACOs.

Joel Cantor, director of the Center for State Health Policy at Rutgers University, said the regulatory issues should be hammered out in a matter of months, followed by the administrative process for creating rules. In the meantime, Cantor’s team will release studies looking at how Medicaid ACOs can measure cost savings, as well as quality.

The biggest legal challenge is before the Supreme Court, though. If the Affordable Care Act is struck down, the survival of ACOs is far from assured. According to Stephen Timoni, an attorney with K&L Gates LLP, in Newark, many of the waivers that prevent gain-sharing programs from being subject to federal antitrust and kickback laws are written into the act, and would need to be reintroduced through legislation for ACO models to continue.

But ACOs are “still a necessary mechanism to provide people with affordable care that’s managed properly,” said state Sen. Joe Vitale (D-Woodbridge), who introduced legislation creating the demonstration.

There are also issues of getting competing providers to share records and communicate about patients, “because they have very disparate interests,” said David Knowlton, president and CEO of the Health Care Quality Institute. “It’s trying to create an environment where collaboration is easier, and that’s a real challenge … everything is a negotiation.”

In Camden, the celebrated Camden Coalition of Healthcare Providers is setting the standard in terms of how community-based ACOs can work. Dr. Jeffrey Brenner, who runs the ACO, has brought national attention to the concept that such organizations can succeed in reducing emergency department use and increasing cooperation.

“What the national attention did was make sure everybody learned about it,” Knowlton said. “Before, people might roll their eyes and say, ‘You can’t do anything about that population. That will never happen.’ Now … you can answer the naysayers with a real-life example.”

Trenton also has an ACO prepared to be a Medicaid demonstration group. The Trenton Health Team is operating in six city ZIP codes in conjunction with the Greater Trenton Community Coalition and Healthcare Quality Strategies Inc.

These groups in Camden and Trenton are functioning as ACOs without any of the Medicaid gain-sharing benefit, but Healthcare Quality Strategies said they are reducing readmission rates at hospitals, directing ER patients’ primary care providers and getting all types of care providers on the same page.  

For the Greater Newark Healthcare Coalition, getting to the point of preparing to become an ACO requires a key step: hiring an executive director. Dr. John Brennan, president and CEO of Newark Beth Israel Hospital and chair of the coalition, said the various members each have committed resources to bring in a person dedicated solely to operating the ACO.

Other groups are forming in Jersey City and Atlantic City in preparation of the Medicaid regulations being released.

“The expectation is that this would take some time, so … the longer it takes, the more time the potential ACOs have to get their act together,” Cantor said. “It takes quite an investment to get the care management infrastructure in place, and all the data infrastructure in place. There’s a reason the Legislature passed it as a demonstration.”

“I’m not sure exactly what the right number (of Medicaid ACOs) is, but I don’t think anyone would be disappointed if there were three or four,” Cantor added. “This is hard, groundbreaking stuff, and you need leaders to demonstrate how it’s done.”

 

E-mail to:  mcaliendo@njbiz.com
On Twitter:  @MCaliendo33


www.NJBIZ.com