Aetna, Mount Sinai Invest in Accountable Care Organizations

March 15, 2016 - Since the Affordable Care Act was passed and the Center for Medicare & Medicaid Service Innovation established the Medicare Shared Savings Program, the development of accountable care organizations began to blossom quickly. Along with CMS, private commercial payers also began establishing contracts with healthcare providers to function in an accountable care setting.

Last month, Aetna and Mount Sinai Health Partners announced in a company press release the creation of an accountable care organization between the two parties. This development is meant to improve care coordination as well as reduce healthcare spending.

In general, accountable care organizations are geared toward improving the efficiency of medical spending, reducing wasteful processes, and advancing population health management. The Aetna and Mount Sinai partnership and contract will last a minimum of three years and allow health plan beneficiaries to receive high quality care and improved cost efficiencies.

“As we’ve said before, our focus remains on keeping New Yorkers out of the hospital by doing everything possible to ensure access to high-quality, cost-effective health care services, and we are proud to work with Aetna on these efforts,” Niyum Gandhi, Chief Population Health Officer for the Mount Sinai Health System, stated in the release.

The major health payer Aetna is striving to transition their reimbursement system away from fee-for-service payments to a value-based care model. The formation of accountable care organizations is one method to achieve this goal. Mount Sinai Health Partners, on the other hand, are attempting to improve their population health management through the ACO partnership.

Providers and payers will need to work toward aligning the quality of care with payment strategies in order to create a value-based reimbursement structure. Accountable care organizations and other value-based care formations seek to cut rising healthcare spending, decrease duplication in diagnostics and testing, enhance healthcare access, and boost patient health outcomes.

Through data analytics and a focus on population health, physicians and hospitals are able to enhance the health of patients with chronic conditions and prevent disease among healthy consumers in a value-based care model, which is why payers like Aetna are investing in the development of accountable care organizations.

“Aetna is committed to transforming the health care system, putting consumer needs first. Our new agreement with Mount Sinai puts consumers at the center of a health care system that promotes wellness, provides better care for chronic conditions and uses economic incentives to reward positive health outcomes,” David Kobus, Aetna Senior Vice President, New York market, said in a public statement.

The payment model set up by Mount Sinai Health Partners and Aetna requires the providers to meet certain quality measures in order to receive higher reimbursement. This is ultimately meant to improve patient satisfaction, the quality of healthcare services, and reduce costs.

For instance, accountable care organizations are aimed at cutting the rate of hospitalizations and emergency room visits by addressing problems before they escalate, which will lower spending and ensure healthier populations. Additionally, value-based care models look to reduce the rate of hospital-acquired infections and wasteful spending.

The partnership will bring more than 3,100 doctors from Mount Sinai to provide services through an accountable care organization while there are more than 200,000 Aetna members benefiting from value-based collaborative payment structures in New York.

While various payers and providers are working to establish accountable care organizations, the state of Oregon has created 16 coordinated care organizations or CCOs. A paper from the Journal of the American Medical Association (JAMA) discussed how Oregon reformed its Medicaid program by establishing these coordinated care organizations.

The difference between a CCO and an ACO is primarily “in their acceptance of full financial risk in the form of a global budget,” the paper explains. In addition to this financial risk differentiation, a coordinated care organization takes on healthcare delivery and reimbursement among a greater number of services including dental care, mental health, and substance abuse and recovery.

About 90 percent of all Medicaid beneficiaries in the state of Oregon are now receiving medical care through a CCO. CMS and Oregon’s Medicaid program worked to develop a value-based care arrangement in which providers would receive financial penalties if unable to meet spending or quality benchmarks.

Some positive results have come about due to the coordinated care organizations established in Oregon including the fact that spending for inpatient care among Medicaid beneficiaries fell by 14.8 percent in 2014.

President and CEO of the Robert Wood Johnson Foundation Risa Lavizzo-Mourey, MD, MBA, wrote for the American Journal of Managed Care about some of the innovations and reforms being brought through CCOs and ACOs.

“As recently as 2012, accountable care organizations (ACOs) were often described as ‘mythical unicorn creatures.’ We’ve come a long way in a few short years, thanks to the incentives included in the 2010 Affordable Care Act that encourage medical centers, clinics, and practitioners to band together and create these coordinated, integrated healthcare entities,” Lavizzo-Mourey wrote.

“Safety net ACOs and CCOs deal with many patients who have very complex psychological, medical, and social issues that are costly and complicated to address. In Oregon, they have yet to see a significant shift in costs,” she continued.

“Still, these ACOs are innovating, trying new ways to improve the health of the people and communities they serve. This is a big change, and it isn’t going to happen in a year or two. But Dr. Martin Luther King taught us that “Change does not roll in on the wheels of inevitability.” If we want to reform health in America, we must commit to the long haul.”