What Do ACOs Mean for Specialty Pharmacy Practice?

Pharmacy TimesMay 2011 Skin & Eye Health
Volume 77
Issue 5

Specialty pharmacists are well positioned to offer their drug treatment expertise as accountable care organizations seek high-quality, cost-effective care for complex conditions.

Specialty pharmacists are well positioned to offer their drug treatment expertise as accountable care organizations seek high-quality, cost-effective care for complex conditions.

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) unveiled the long-awaited, and much anticipated, proposed rule implementing the new Medicaid Shared Savings Program (MSSP), health care reform’s premier delivery system reform. 1 The proposed rule, a guidance document for the creation of Accountable Care Organizations (ACOs), has the potential to dramatically shape the incentives by which health care services are delivered far beyond the world of Medicare.

Along with the CMS proposed rule, the Office of the Inspector General, 2 the Federal Trade Commission, 3 and the Internal Revenue Service 4 each also issued guidance documents implementing this new major policy. Taken together, the guidance documents offer a picture of a delivery system where specialty pharmacists will play an even more involved role in patient care and management—ensuring appropriate medication use, reducing medication-related adverse events, preventing hospital readmissions, and helping patients to manage chronic conditions.

By way of background, the Affordable Care Act introduces ACOs on a voluntary basis by directing the Secretary of Health and Human Services to develop a MSSP whose purpose is to “encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery” aimed at reducing expenditure growth and improving health outcomes through accountable care organizations. Under the MSSP, an ACO will be a consortium of health care providers and suppliers who work together to achieve the “three-part aim” of (1) providing better quality of care for Medicare beneficiaries that (2) results in better health for patient populations and (3) lowers growth in health care expenditures. Providers and suppliers who wish to form an ACO may apply to CMS, but participation in the MSSP is not mandatory nor is it likely that most Medicare providers and suppliers will join ACOs. It is expected by many, including the agencies, that ACOs will also contract in the commercial market, and so the guidance documents address possible arrangements outside of Medicare.

Under CMS’ March 31 proposal, providers who are part of ACOs must disclose their participation to the patient, but assignment will be retroactively based, encouraging the ACO to redesign its care processes for all beneficiaries, not just those upon whom the ACO is being evaluated. In terms of incentive payments, CMS proposed a hybrid risk model where ACOs have the option between 2 tracks: in Track One, the ACO will have 1-sided risk (ie, only upside) for the first 2 years and then automatically transition into a 2-sided risk model in year #3. In Track Two, the ACO will assume 2-sided (ie, upside and downside) risk for all 3 years.

ACOs will be evaluated under 5 quality domains containing 65 quality measurements. Of particular relevance for the specialty pharmacy community are those defined domains dealing with care transition and medication reconciliation. Under the proposed rule, an ACO will be evaluated specifically on medication management, ensuring that a beneficiary receives continuity of care, particularly in the posthospital setting. Specialty pharmacies can be key players in guaranteeing an ACO’s success by ensuring appropriate medication use and reducing medication-related adverse events, particularly for complex chronic conditions.

As an ACO’s success or failure will ultimately depend on both high-quality care and lowered expenditures, specialty pharmacies will play a collaborative role under this new model of care. They will be working with other providers in evaluating patients’ medication regimes, ensuring that patients’ medications and medication doses are appropriate to their conditions, and preventing and managing adverse drug events.

The intensifying cost consciousness of the managed health care market being driven by financial incentives from ACOs will further elevate the relevance, importance, and value of the drug treatment expertise of the specialty pharmacist. As ACOs incentivize cost-saving and high-quality care, specialty pharmacies will find that the ACO model demands their superior knowledge in managing complex conditions. SPT


1. 76 Fed. Reg. 19528 (April 7, 2011). http://edocket. access.gpo.gov/2011/pdf/2011-7880.pdf.

2. 76 Fed. Reg. 19655 (April 7, 2011). http://edocket. access.gpo.gov/2011/pdf/2011-7884.pdf.

3. FTC File No. V100017. www.ftc.gov/os/ fedreg/2011/03/110331acofrn.pdf.

4. RS Notice 2011-20. www.irs.gov/pub/irsdrop/n-11-20.pdf.

About the Authors Jayson Slotnik focuses on health regulatory issues in his current practice at Foley Hoag LLP. He was formerly the director of Medicare reimbursement and economic policy at the Biotechnology Industry Organization in Washington, DC. Ross Margulies is a health policy specialist at Foley Hoag LLP with expertise in federal and state health law and policy issues including Medicare and Medicaid, community health, and the impact of health care reform.

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