FL Doctors Win Medicare Bonuses

Jun 12, 2014

Hundreds of Florida doctors are recipients of the first round of bonuses from the federal government – a thank-you for saving taxpayers $33 million on Medicare last year.

Credit Kaiser Health News

Those who receive the performance bonuses are part of primary-care networks called “accountable care organizations,” or ACOs, created by the Affordable Care Act.  ACOs take financial responsibility for the care of their Medicare patients.  

Their mission is to “provide high-quality care at the right time and in the right setting,” as one of the groups, FPG Healthcare, puts it.

At the end of the year, if the government determines that a certain ACO’s patients received high-quality care and cost less than expected, the ACO receives half of the savings.  That means Florida ACOs recently received $16.5 million in rewards.

“It’s an absolute windfall,” said Richard Lucibella, CEO of one of the winners, Accountable Care Options of Boynton Beach. He said the primary-care offices in the ACO received an average bonus of $150,000.

Doctors got an average payment of $500 for each Medicare patient in their ACO practice, Lucibella said; however, those who have the best quality-of-care scores get the most.

“We’ve been very aggressive with preventive care,” said Mitch Perelman, a primary physician in the ACO.

“That’s really our goal, to keep patients out of the hospital – that’s major,” he said.

Medicare’s quality benchmarks for ACOs – from assessments for fall hazards to mammograms -- are attached to each patient’s electronic record.

“Patients seem happy with us doing these measures. They like going over things,” said Perelman.

In addition to Accountable Care Options, the Florida-based ACOs that won performance bonuses are Palm Beach ACO and FPG Healthcare in Orlando.  Palm Beach ACO received about $11 million, Accountable Care Options got $4.2 million, and FPG collected $1.45 million.

The bonuses follow a January report from the Centers for Medicare and Medicaid Services on interim financial results for the first two groups of ACOs that began the partnership with CMS in 2012.   Of the 114 ACOs, nearly half – 54 – succeeded in slowing spending under the forecast.  Only 29, however, hit the benchmark that triggers shared savings with Medicare.

In Florida, 13 ACOs opened in 2012, along with two multi-state ACOs that include Florida doctors. One of the multi-states, TP-ACO, qualified for shared savings. Attempts to reach TP-ACO to confirm the amount were unsuccessful;  CMS isn’t releasing performance results for each ACO.

Since 2012, CMS has approved new ACOs annually. The shared-savings results announced at the end of January dealt only with the early adopters; by that time CMS said there were 360 ACOs in operation.

How ACOs are structured is up to the founders. Some are physician networks, led by doctors; others have been started by hospitals. Walgreens has Medicare ACOs  in Florida, Texas and New Jersey in partnership with physicians. Insurers also are forming private-sector ACOs.

The ACO model is one of several initiatives that CMS has launched in an effort to improve care and lower costs.

 To start, an ACO must serve at least 5,000 Medicare patients, have a governing body and infrastructure, and show it can deliver coordinated care.

ACOs may include specialists and hospitals. However primary care doctors are at the center, as care coordinators. Part of their job is to prevent duplication of services and unnecessary testing or treatment. They also make referrals.

This sounds a lot like managed care, but there is a key difference. Patients in an ACO are free to go to any doctor or healthcare facility they want, without prior approval. So their ACO primary care team has to find ways to keep their patients happy so they won't stray.

Medicare beneficiaries don’t sign up for ACOs; their doctors do. Patients are notified that their doctor is now in ACO and can choose to opt out.

“For year one, our biggest challenge was getting doctors to believe that this would all work,” said Kelly Conrad, director of Palm Beach ACO.

That ACO has 275 doctors and specialists caring for 32,000 Medicare beneficiaries in Palm Beach County. It opened in July 2012 and saved Medicare $22 million in its first 18 months.

Simple suggestions have contributed to the ACO’s success, said Conroy. One was wellness visits, which allow doctors to establish relationships with patients and look for preventable health problems.

Wellness visits can save money in the long run, but most patients -- and many doctors -- aren’t aware that they are a Medicare benefit, said Conroy.

The ACO also alerted doctors about Medicare’s new benefit for transitional care visits. It pays for patients to see their doctor within a week of release from a hospital. Transitional care fits neatly into the ACO’s mission to control costs. Doctors reduce the risk of readmissions through identifying care gaps and seeing that patients understand post-release treatment plans.

Experimenting with ways to reduce spending through quality care is a work in progress, said Conroy.  “No one has all the answers yet,” she said.

At Accountable Care Options in Boynton Beach, the network has focused on performance measurements that evaluate care. The organization’s 50 doctors are all primary care physicians. They saved Medicare $8.4 million from mid-2012 through 2013 while meeting quality benchmarks.

“We’ve found educating practices about these measures to be transformational. We really had thought they would be a thorn in our side,” said Lucibella.

Medicare evaluates ACOs annually. Success during 2014 will trigger more bonuses at the end of the year.

--Susan Hemmingway is a freelance writer in Tampa.  Questions or comments may be addressed to Editor Carol Gentry, at cgentry@wusf.org or 813-974-8629.