Alternative Healthcare Delivery Models and O&P
January 2014 Issue
New healthcare reimbursement models that lean toward large organizations, coordinated and standardized care, and bundling payments are already a reality in the U.S. medical world. Soon enough, these models will become a significant presence in the O&P sphere as well. To survive in this environment, experts say that providers need to be prepared to change the way they do business.
"O&P practice owners need to quickly get their heads out of the sand and realize the whole healthcare world is changing around them," Mark Ford, director of business development for OPIE Software, Gainesville, Florida, says. "You have to spend time every week reading about the changes. It's critical that everyone open their eyes to what's going on so you can be prepared."
Alternative Types of Reimbursement
Experts say that the biggest upcoming player in the healthcare field will be Accountable Care Organizations (ACOs). These healthcare models are based around the management and coordination of care with hospitals, physicians, and other providers communicating and sharing records electronically to fully document patients' progress; provider participation is voluntary. The goal of coordinated care is to achieve savings through improving care coordination and providing care that is appropriate, safe, and timely.
The organizations are a construct of the Affordable Care Act (ACA) and were designed in part to help keep down the cost of healthcare for Medicare patients. To receive reimbursement from the Centers for Medicare & Medicaid Services (CMS), ACOs must accept at least 5,000 patients once the ACA is fully implemented. The organizations have grown exponentially in recent years, especially with the addition of patients who are not on Medicare. ACOs provide care for about 2.4 million Medicare patients and about 15 million non-Medicare patients, according to a February 2013 report by the consulting firm Oliver Wyman, headquartered in New York, New York. The firm estimates that 14 percent of the population is currently receiving care through some sort of ACO arrangement, and that number will continue to grow.
ACOs receive financial incentives if they keep their costs down; they also must meet certain quality standards to share in any savings they achieve for the Medicare program, according to CMS' "menu of options" for improving care. Under the Medicare Shared Savings Program, ACOs that elect to become accountable for shared losses have the opportunity to share in even greater savings.
In a different program, some individual ACOs are also participants in the CMS Bundled Payments for Care Improvement (BPCI) initiative, which is testing different ways of compensating hospitals and healthcare organizations for a hospital stay or a healthcare episode. Ford says that he thinks that some type of bundled payment approach will probably be the future of ACO reimbursement and eventually O&P reimbursement as well once ACOs begin to include allied health services as part of their programs.
This kind of funding structure means that ACOs and participants in the BPCI initiative will be keeping close tabs on patients, using data to track their outcomes, and working to see that costs are kept to a minimum, says Brian Gustin, CP, president of Forensic Prosthetic and Orthotic Consulting, Green Bay, Wisconsin.
Another possible model being tested by CMS is called the Patient-Centered Medical Home (PCMH). This model is similar to ACOs in that PCMHs are based around a physician network, the sharing of medical records, and the coordinated care of patients. However, instead of a hospital or a large physician group of providers, this model is centered on primary care physicians who find ways to contract with other patient care organizations for services. According to a 2007 report by the Robert Graham Center, headquartered in Washington DC, these models could prove to be effective because they create an ongoing relationship between patients and their personal physicians.
That kind of organizational structure, based around smaller, independently owned medical practices, probably fits in better with O&P practices that also tend to be smaller and independently owned, Ford says. He adds that while the PCMH model might work in rural settings in the long term, he's not too hopeful that it will be the standard everywhere. "ACOs are likely to become the 800-pound gorilla because they are already focused on large population centers," he says. "The PCMH is the small guy, and it's like David versus Goliath. That doesn't mean that a PCMH can't work but rather that it will need to understand how to compete in the new healthcare world."
Ryan Ball, director of government relations for Orthotic and Prosthetic Group of America (OPGA), Waterloo, Iowa, says that the size and scope of ACOs means that O&P providers will need to find a way to work with them to stay in business. "If an ACO forms in your area and they decide to send all of their prosthetic referrals to their clinics or a limited network, then what's left?" Ball asks. "They will control so many referrals and are so big that it will be tough to work around them. They won't siphon a few patients here and there; they will change the way referrals are distributed in a community."
An Uncertain Future
Right now, ACOs are so focused on physicians and hospitals that they haven't given a lot of thought to how they will work with O&P providers or other ancillary services, says Anita Liberman-Lampear, MA, president of the American Orthotic & Prosthetic Association (AOPA) and administrative director of the Orthotics and Prosthetics Center at the University of Michigan Health System (UMHS), Ann Arbor. Even the few O&P practices that are already working withACOs, such as UMHS, have not had to make any changes to the way their business works, she says.
"Nothing has changed," she says, since UMHS' O&P Center became associated with an ACO. "They haven't even talked to me about it. I've been talking to them more than they've been talking to me." Liberman-Lampear says she has offered to have meetings with the ACO administrators, but right now they tell her that they have not yet started thinking about how they will include O&P in their business models.
According to CMS, UMHS was one of 32 Pioneer ACOs that participated in a CMS program designed to share more of the cost savings with the ACOs in exchange for more of the risk. According to UMHS, the health system did cut costs but eventually switched to a CMS program for ACOs that does not require them to have a financial risk.
Sooner or later though, experts predict that the eyes of the ACO leaders will turn toward O&P and other ancillary services. Initially, Gustin says, ACOs will probably conduct business as usual as they try to get a better sense of the services that O&P practices provide, along with how much they charge and their patient health outcomes. Once they collect that data, they could make some changes that have a big impact.
They could, for example, decide to send referrals to just a few trusted O&P practices that work within their guidelines, boosting some businesses and devastating others. Or an ACO with no faith in local practices could simply start its own O&P department, cutting out all referrals.
Gustin continues, "If you can't show them how you meet their cost and quality benchmarks, they are either not going to play with you or do what you do themselves."
With this newfound power to control the purse strings and patients, experts say that the question for O&P practices shouldn't be whether to be affiliated with an ACO but rather how to be affiliated and work within their requirements.
Making Deeper Connections
The first step for O&P practices should be to make sure that the ACOs in their community know about them and are familiar with the efficacy of their patient treatment. Right now-before ACOs turn their eyes toward O&P-is the perfect time for providers to define themselves and prove their worth to the healthcare organizations, Liberman-Lampear says. In truth, the people heading the ACOs might say they are too busy to start talks with O&P providers. She suggests that providers be polite, and back off if asked, but to not stop trying.
"You have to be somewhat of a marketer and somewhat of a schmoozer and get out there and make your intentions known," Liberman-Lampear says. "It can be done, but you have to be willing to make some sacrifices or be creative and innovative."
O&P practices need to begin to think about how they are going to prove their worth to ACOs, however, and that means more than just talking up your business, Ford says. Practices will likely soon be required to prove their value through hard data and not just anecdotal evidence of a small handful of success cases. "Showing a video of a patient walking is not the answer," Ford says. "The message that O&P practices present can't appear to be oneoffs. Practices need to have standardized data that shows how their patients are doing in total and over time."
Becoming a Data-Focused Practice
Keeping data and using it effectively are essential for any practice that wants to stay in business, Gustin says. "Going forward, if you can't prove it, if you can't show it, you aren't a viable entity in the healthcare industry anymore," Gustin says.
Thus far, tracking patients and their outcomes has not been a strong suit for individual practices or the profession as a whole, Gustin says. Practitioners tend to use their previous experience and gut intuition when making patient care decisions. While those skills are valuable, they also need to use data to prove that their methods are the best, he says.
The experts say that practices should start preparing immediately for this change in the medical landscape and should be working toward the following goals:
- Making deeper connections with local hospitals and physician practices already in ACOs so they are educated about an O&P practice's worth before they start making referral decisions.
- Becoming a data-focused practice by collecting data to assess patient outcomes and using data to make treatment decisions.
- Finding ways of producing better results for less money. This probably means standardizing care in some form or another to help keep costs down while providing proven, effective treatment.
The good news is that collecting data doesn't have to be a daunting process for a practice, says Rebecca Hast, president of Linkia, Rockville, Maryland. There is already software available to help practices get some of the information they need. Hast didn't recommend a specific program but said that practitioners should be looking for a system that is diagnosis- or condition-driven and can collect information about the patient, his or her care, and his or her progress.
At the very least, she says, practices should be focused on improving their patient satisfaction surveys and collecting good and useful information on how their patients view their work. There is already software available to easily collect and process the reports, Hast says. "It's not that hard to do," she says of the patient satisfaction surveys. "If you aren't doing it, then it's something you should be doing."(Editor's note: For more on this topic, read "Patient Satisfaction Surveys: Using the Data," in the September 2013 issue of The O&P EDGE.)
In the future, data and studies can also help practices determine the best and most cost-effective treatments for certain conditions, Liberman-Lampear says.
Producing Better Results for Less Money
ACOs are all about finding effective treatment in a cost-effective manner, Liberman-Lampear says. To meet their goals it might mean some tough changes for O&P. "The bottom line is, we need to be able to provide excellent care at lower rates. We need to become leaner and count our pennies."
The experts agree that standardizing protocols of care, both within a practice and throughout the profession, will be necessary to survive the new reimbursement models. Gustin says this doesn't mean that practitioners won't have control over how they treat their patients but instead will use data to develop standards of care that are proven to have good outcomes for patients while still containing costs. That might mean that practices will have to scale back on high-cost prostheses when lower-cost ones have been proven to maximize the patient's potential.
"Patients going forward under the ACO model might not be getting the same level of prosthetic and orthotic devices they once got," Gustin says. "The question is, did they actually need what they once got?"
This can be a sensitive issue, but it doesn't have to be, according to Hast. "I don't think anyone is interested in removing the clinical judgment from the practitioner, but I do think standards of care are an important improvement," she says. "I don't think we should be afraid of standards of care. They are an important tool, and if done right, they enrich the clinical capacity rather than...replace the decision-making process."
Making this transition will be tough for a profession that prides itself on highly personalized service, Ford says. In the future, O&P providers may be required to make patient care decisions based on much more standardized approaches to care. "O&P will have a challenge to make that evolution," Ford says. "It can be done, but it will be painful for some clinicians to go through that process, especially if they are unwilling to change."
A Place for O&P Practices
The onslaught of ACOs certainly means changes for the O&P industry, but the new, consolidated structure doesn't have to be the death of the independent O&P practice, Gustin says.
"The gist is, you can remain independent and be affiliated with an ACO," Gustin says. "They don't have to come and gobble you up, but you do have to run your practice in parallel with their practice."
ACOs have been created with a primary focus of cutting overall healthcare costs, but that doesn't mean they will want to cut back on services that are ultimately beneficial for the patient. The best way for independent O&P practices to survive is simply to do their jobs well and document that work, Ford says.
For instance, one of the main concerns for CMS is the high readmission rates of patients. If O&P providers can objectively show how they help patients, thus keeping them from returning to the hospital, then everyone benefits. The patient is healthier, CMS does not have to pay for additional hospital visits, the ACO meets its goal of low readmission rates, and the ACO will continue to compensate the O&P practice for its services.
"If the O&P profession can really begin to focus on proving that providing O&P patient care services actually reduces long-term medical costs, then CMS will love us," Ford says. "It's all about being able to prove the value of the services which we are providing and billing for."
While there is a fear that ACOs could ultimately decide to build their own O&P departments, that probably will not be the case if the organizations and practices learn to work well together, Ford believes. The truth is that it's costly and time-consuming to build an O&P practice from scratch, and the natural inclination of ACO executive leaders will probably be to work with O&P practices as long as they can work within their requirements, he says.
To succeed, practices will need to understand these new requirements and be braced for whatever the future might hold, Hast says.
"The providers that will fare best will have a good sense of their operations and can run their practice successfully committed to patient care; that never changes," she says. "They also need to keep an ear out for upcoming changes and see how they can respond to those."
Maria St. Louis-Sanchez can be reached at