Nebraska FPs Betting on Success With Their Own ACO

November 30, 2013 12:13 pm Paula Haas

Can a small, mostly rural, family medicine-based accountable care organization (ACO) provide high-quality, coordinated care for its Medicare patients while also saving Medicare money? Nine independent family medicine practices in Nebraska are betting that the answer is yes.

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The small practices (see sidebar), which are spread over nine counties, recently banded together in the South East Rural Physician Alliance (SERPA) ACO, which began operation in January as an advance payment ACO in the Medicare Shared Savings Program( The individual practices range in size from three to about eight FPs, with a total of 48 FPs overall. Together, they care for about 10,500 Medicare patients.

As an advance payment ACO, SERPA-ACO and its practices received about $400,000 up front from Medicare to help pay for infrastructure, according to Robert Rauner, M.D., M.P.H., the ACO's medical director. The practices continue to receive fee-for-service payments, but they also get an $8 per-member, per-month payment from Medicare through the ACO until June 2014.

If SERPA-ACO succeeds in saving Medicare an amount each year that meets or exceeds a minimum savings rate, the ACO will earn a share of the Medicare savings if it reports yearly on 22 of 33 quality measures, said Rauner. Medicare collects data for the other 11 measures from claims or patient satisfaction surveys. In year 2, the ACO can lose some of its portion of Medicare savings if it doesn't meet Medicare quality benchmarks. Medicare will recoup the advance payment money from the savings that the ACO earns.

The ACO also now has contracts with Medicaid and some commercial plans, said Rauner.

Story Highlights
  • Nine small, independent family medicine practices in Nebraska have banded together to form an advance payment accountable care organization (ACO) in the Medicare Shared Savings Program.
  • The ACO received a $400,000 advance payment from Medicare to help pay for infrastructure; Medicare will recoup the payment from any Medicare savings the ACO earns.
  • Since the ACO doesn't include a health system or hospital, the FPs are free to refer when needed to specialists who demonstrate high quality and reasonable costs regardless of their health system affiliation.

Proactive Leaders

Many of the FPs in the SERPA-ACO practices already knew one another through serving in leadership positions in the Nebraska AFP. When managed care became a concern in the 1990s, they and other FPs decided to be proactive and formed the SERPA independent practice association (IPA), in part to give their practices more clout when contracting with insurance companies, according to Robert Wergin, M.D., a member of the SERPA-IPA board of directors, a past president of Nebraska AFP and the AAFP's current president-elect. Over time, the IPA grew to include about 110 physicians, including some in other specialties.

When the Patient Protection and Affordable Care Act, which proposed the ACO model of care, passed in 2010, "there was lots of confusion and anxiety about how this was going to affect our small practices," said Wergin. Rather than adopting a passive, wait-and-see attitude, the FPs decided once again to be proactive and form an ACO.

"We knew we could be at a disadvantage if we waited for other ACOs to approach us," Wergin said. "Such ACOs might offer small practices like ours a take-it-or-leave-it contract with no negotiation possible. We didn't want that."

Also, most ACOs in Nebraska develop vertically, sponsored by a hospital or health system. Such an ACO usually wants referrals to be made to specialists within its system, according to Wergin, who said, "but who can do the highest-quality, cost-effective aortic valve for your mom? It might be someone outside of that health system." SERPA-ACO's horizontal structure enables its physicians to pick a specialist based on quality numbers and without considering system affiliation.

And those quality numbers are becoming available. Some specialists already have approached SERPA-ACO with good quality and cost numbers, said Joleen Huneke, the ACO's executive director. "These are the types of people we want," she said.

Clinics in SERPA-ACO
  • LifeCare Family Medicine of Bellevue, P.C., Bellevue
  • Central Nebraska Medical Clinic, P.C., Broken Bow and Sargent
  • Butler County Clinic, P.C., David City and Shelby
  • Fillmore County Medical Center, P.C., Geneva
  • Family Medical Center of Hastings, Hastings
  • Family Practice Associates, P.C., Kearney
  • Plum Creek Medical Group, P.C., Lexington, Ellwood and Eustis
  • McCook Clinic, P.C., McCook
  • York Medical Clinic, P.C., York, Stromsburg and Exeter

Wergin said the ACO was formed with independent practices to make it nimble and able to adjust quickly as it gets up and running. SERPA-ACO will look at adding the practices of employed physicians, such as Wergin, after the ACO is established and successful.

Agreeing to Change

To be in the ACO, the nine independent practices each had to have an electronic health record (EHR) and be at or close to meaningful use stage 1, according to Rauner. The practices also had to agree to work toward certification as a tier 1 patient-centered medical home (PCMH) through Nebraska's Medicaid program and to hire an onsite care coordinator, if they didn't already have one.

In addition, "when we recruited these clinics, we all knew at least one physician in the clinic who was a leader, oftentimes in the Nebraska AFP," said Rauner. These lead physicians are needed to champion the changes each practice must make to be in the ACO.

Challenges to Overcome

Making those changes sometimes has been challenging.

"These physicians are in independent practices for a reason, and many of them, especially the older ones, were taught in medical school to be the captain who runs it all," said Rauner. "But practicing as a team means the doctors had to give up some power to their staffs. The doctors also had to learn to do some things in common with the other ACO practices.

"They've made lots of progress, though they still have their moments."

Logan Pritchard, D.O., of the Family Medical Center of Hastings is the youngest lead physician in a SERPA-ACO practice. He said that some of the changes that concerned older physicians didn't bother him at all. "What my quality measures are, for example," he said. "Because in residency training, we monitored quality measures and adjusted our practice accordingly."

But he said he shared some of the other concerns of his older colleagues, "such as when Medicare or Medicaid has us do things just because the government tells us to. I find it just as frustrating as they do."

Pritchard said the increased need for communication has been a challenge in his practice. "For each change, we have to tell everyone what we are trying to accomplish and why," he said.

The physicians also had to give up the idea that they know the best way to do everything in the clinic. "That's often not the case because we are not doing the process, so we have to let go and ask nursing staff how it should be done," Pritchard said. His practice now has more processes where nurses have autonomy to do things automatically, instead of having everything approved by a doctor.

Pritchard would like to see more changes in the way the practice works, but he acknowledged it's hard to do in a fast-paced practice with limited space. "If we could just hit pause and then install all of these changes and then resume patient care, it would be better," he said. "But we can't do that."

Facts About the Nebraska AFP

Chapter EVP: Marcia DeRoin
Number of chapter members: more than 1,200
Year chapter was chartered: 1948
Location of chapter headquarters: Omaha
2014 annual meeting date/location: March 27-29, Embassy Suites Old Market, Omaha

Yet, according to Pritchard, the host of benefits, such as better patient care, lower costs, better satisfaction for physicians who feel they've really helped patients, better communication between primary care physicians and specialists, and ultimately better ownership by patients of their own health care, will be worth the frustrations. "I would have a hard time joining a group that wasn't open to concepts that are common to ACOs and medical homes," said Pritchard.

Another challenge that SERPA-ACO has faced is uneven buy-in within the practices. "My latest round of meetings has been to explain to all the people in each clinic why we are doing this," said Rauner. "When staff understand this, they really buy into it. I think they like the fact that we are focusing so much on quality."

Gerald Luckey, M.D., the lead physician at the Butler County Clinic in David City, said staff members in his practice have bought into the concept very well. "They see the value in it and the improvement in care," he said. "But they also do more work than they did before, making sure we've done the best we can for each patient. And I meet with the office manager, care coordinator and lead nurse every week to solve problems, something I didn't do before. It's all very challenging."

That said, Luckey also is happy that his practice is moving toward the way he's wanted to practice for the past 40 years -- "a system where we're doing things that count as far as quality of care is concerned, not just generating volume," he said. "This is the future of health care."

One of the biggest challenges for SERPA-ACO has been compiling data for the 33 quality measures Medicare requires. Although data for 11 of the measures come from claims data compiled by Medicare, data for the other measures must be pulled from the EHRs in the ACO practices -- and there are six different EHR types.

"Fortunately, we found a vendor who can interface with four of the six EHR types," said Huneke. "The other two practices will have to extract data by hand until their EHRs have interface capabilities. The vendor will aggregate the data our practices provide and the claims data from CMS, and then we will submit the resulting file to CMS."

Encouraging Numbers

CMS recently sent SERPA-ACO aggregated 2012 claims data, including claims data for ER visits, hospitalizations and hospital readmissions, that showed how the SERPA-ACO practices as a group performed before their Medicare ACO contracts started in January. CMS also provided aggregated 2012 claims data for the other ACOs whose Medicare contracts started in January. "While we can't share the data for the other ACOs in our cohort, I can say that we were pleased with how our data looked in comparison," said Rauner.

The SERPA-ACO data also compares well with utilization data posted on the CMS website regarding all ACOs in the Medicare Shared Savings Program. The SERPA-ACO practices were well below the median in the posted data for hospitalizations, ER visits, and ER visits with hospitalization per thousand assigned Medicare beneficiaries.

"We think these data show that our practices were starting from a good place, and that our approach to care is working," said Rauner. "If we can make this work, it really will make primary care different and the way it should be. And we're getting more confident as we go."

Words of Advice

The three lead physicians interviewed for this story also had words of advice for Academy members who might be contemplating the future of health care and possible involvement in an ACO.

"Excellence in chronic disease management is going to be mandatory in the future," said Luckey. "Your success and impact are going to be much better if you get into a system that is quality-based instead of volume-based. This is where you need to be."

Nebraska AFP President Brian Finley, M.D., the lead physician at LifeCare Family Medicine of Bellevue, noted that some family physicians say they'll wait until insurance companies pay them to change. "But I say that we need to direct some of that change," said Finley. Big medical centers are forming ACOs, "but they may never understand the complexity of primary care and how to support it. Change will result in a better product if we are involved from the beginning."

Finley also encouraged physicians to take advantage of chapter educational offerings about the PCMH and health system change. He said the Nebraska AFP for years has offered such educational presentations, and the chapter also has looked for ideas from both sides of the political aisle to change and improve health care delivery. "Because what we are doing now is not sustainable," said Finley. "I don't know anyone who would argue that point."

Pritchard had some advice for medical students. "I would encourage you to consider family medicine," he said. "With the way health care seems to be changing, I think primary care has the most potential for gain. I would make the same decision again, to go into family medicine."

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