In the political realm, there is intense debate on how to cut costs in the Medicare program without sacrificing services or care to beneficiaries. An interesting note that may be buried in the news headlines is that there is a major effort underway to solve that problem.

As part of the Affordable Care Act (ACA), the health reform law of 2010, there is a provision to establish what are called Accountable Care Organizations, or ACOs. The overall goal of ACOs is that the Medicare system – both the patients it serves and the taxpayers that finance it – get more value for the money spent on care. ACOs provide monetary incentives to healthcare providers that demonstrate that overall, the care they provide is making their patients better. The hope is that it would put the brakes on the current “fee-for-service” system, in which providers are rewarded simply by the quantity of services they provide. Some theorize that the fee-for-service system drives up the cost of healthcare because providers do more tests and procedures, to assure they get paid more. (Read more about ACOs in ANA’s “ACOs 101”.)

ACOs would be a system in which providers would get paid financial bonuses for providing good care, such as meeting certain quality measurement criteria and getting good scores on patient evaluation surveys. A feature of ACOs that differs with the current system is that ACOs would actually create financial penalties for having poor patient outcomes, again as measured through certain data elements.

Recently, there has been significant interest in ACOs, especially in the healthcare associations and industry groups that concentrate on health policy – ANA included. This came to a head in early April when the Centers for Medicare Services (CMS) released the draft “rules” for establishing and operating ACOs. CMS is the government agency tasked by the ACA to recognize ACOs, and to control and authorize the bonuses for the quality performance.

ANA’s health policy and regulatory analysts have been scrutinizing the proposed rules. They then formulated the official response from ANA to CMS on how the rules affect nurses and patients. ANA believes ACOs will remain an important part of the health reform law, especially as there is greater pressure to control costs in the Medicare program.

ANA supports the notion of an ACO as something that can transform and improve the healthcare system. But at the same time, ANA saw significant room for improvement in recognizing and rewarding nursing’s role in an ACO. ANA made recommendations that would maximize patient care and create greater efficiencies and savings by articulating professional nursing’s impact on areas of leadership, patient-centered care coordination, and quality.

ANA built its comments around three main pillars – care coordination, quality measurement, and the effect on advanced practice registered nurses (APRNs) and their primary care patients.

Care coordination is key, but how should we define it?

One of the key tenets of ACOs in achieving better quality care at lesser cost is care coordination. In reviewing how CMS defined care coordination, ANA was concerned that too much emphasis was on how technology, such as an electronic health record, could provide care coordination. Nurses have a keen understanding of the complex communication and information processing that care coordination entails – involving decisions and education that cannot be done by technology alone. A reliance on connecting patient records is not enough.

ANA suggested that CMS define care coordination as a process that is person-centered and uses a designated care coordinator to help connect the patient with the right resources at the right time. ANA argues that the care coordinator should be a health professional, and noted that registered nurses have the optimal competencies to help manage the intricate steps in care coordination. Since it is part of the standards of practice of all registered nurses, ANA suggests care coordination “is what nurses do.”

ANA also argued it isn’t enough to have a good definition of what care coordination looks like in an ACO. In order for it to be truly effective, ACOs needed to devote significant resources to care coordination activities, including technology and staff. To ensure that resource allocation, and to ensure nurses and other staff were not overloaded with additional tasks, ANA asked that CMS require a commitment to care coordination from ACOs, and that care coordination activities should be a major part of the bonus program to ensure a financial incentive.

Quality, not quantity is also a major focus

Along with care coordination, a reliance on maximizing quality in care is a key tenet to making ACOs effective. CMS proposed that in order for ACO participants – the physicians, hospitals, and others providing care in the ACO – to receive a monetary bonus or “share” in the savings, they must have high performance in certain areas of quality. Those areas cover patient-centeredness, care coordination, patient satisfaction, interventions for preventive services, and care of at-risk populations. There were 65 measures in all, and ACOs had to have high scores on those measures to share in the savings.

ANA argued that CMS needed to create a system to measure true quality of care, but not just by imposing quantity. ANA recommended CMS reduce the number of quality measures that an ACO must meet, but overall urged CMS to incorporate measures that cross all sectors of care. This would recognize and measure the integral contributions of nursing practice to quality of care. To help balance the need to have meaningful quality measures without overwhelming an ACO, ANA suggests that a smaller group of mandatory measures be required, and then the individual ACO could select additional measures from a predetermined list. This would allow ACOs to tailor their quality measurements based on the health conditions and needs of their patient populations, and may actually be better at improving quality and reducing cost of care than a one-size-fits-all approach. And, since some evidence suggests some quality measures are more important than others, ANA suggests CMS provide “weights” on the measures to reflect the importance of that measure.

How APRNs come into play

The last and seemingly most complicated aspect of ACOs was how the rules affected primary care APRNs and their patients. It was challenging in addition to complicated because the APRN issues were mostly in the complex “assignment methodology” of ACOs. Essentially, in the health reform law, Medicare beneficiaries (a person whose health costs are covered by Medicare) will be “assigned” to an ACO if they get primary care from a physician. CMS used a strict interpretation of the law, acknowledging that they realized it would exclude APRNs and their patients, but felt bound by the law to not expand ACO “assignment” to other providers. ANA believes that is too narrow an interpretation, since it excludes both APRNs and their patients, and plans to partner with other stakeholders in a larger advocacy campaign to work on this issue.

To address it, ANA suggested in the comments that CMS must account for APRN in its “assignment methodology” to ACOs. ANA was very concerned that this methodology was problematic because it could be confusing to patients. ANA strongly suggests that CMS should modify its methodology of assigning beneficiaries to ensure that patients who receive their care from an APRN are not inadvertently assigned to an ACO, which would transfer them to a new physician for primary care. ANA also recommends CMS not prohibit patients from seeking care outside of their assigned ACO, so that patients who preferred to receive care from an APRN would not be barred from doing so simply because they are in an ACO. ANA has also urged CMS to apply to nurse-managed health centers the same incentives that are intended to encourage the inclusion of federally qualified health centers and rural health centers.

Problems could create opportunities for nurses

So far, the reaction from many groups to the proposed rules has been quite negative. In fact, several major healthcare organizations that were thought to be the most likely initial ACOs have publicly told CMS they will not consider applying without drastic changes to the proposed rules. They have said that the rules are too onerous, and that there is too much money required up front to set up an ACO without any guarantee that they will get the bonuses. CMS estimates that a start-up ACO will need to spend $1.2 million on electronic health records, technology upgrades and other functional requirements, but other estimates put that price tag at 10-20 times as high. Unless they meet the quality measurement goals, they have no guarantee they’ll recoup any of those losses. (Read more on the financial impact of ACOs on ANA’s “ACOs: Follow the Money”.)

The negative reaction could be a good thing for nursing. There is a good chance that significant changes will be made to the ACO rule when the final version is released (no timeline is available, but the health reform law states that CMS must establish its formal ACO program by January 1, 2012). ANA is hopeful that part of those changes will include the call to recognize and reward the nursing’s role in providing leadership and quality care to an ACO.

Katie Brewer is a senior policy analyst at ANA.