How MACRA Requirements Impact Accountable Care Organizations

November 07, 2016 - MACRA legislation impacts a number of healthcare providers and entities including accountable care organizations (ACOs). Only a few Medicare accountable care organizations will actually be able to participate in Advanced Alternative Payment Models under MACRA but the rest will need to take part in the Merit-Based Incentive Payment Program (MIPS).

This past summer, the National Association of ACOs (NAACOS) released a report outlining some of the challenges that accountable care organizations will face in adhering to MACRA requirements and the Medicare Shared Savings Program (MSSP).

Some ACOs may have difficulty taking on the high price of investing in care coordination and population health management processes while others may have trouble with the risk models required to advance in the Medicare Shared Savings Program.

Commercial health payers can use this information and work with their ACOs to further share cost and claims data to improve coordination and population health management. Additionally, private payers are advised to slowly transition providers into taking on more financial risk so that these entities can grow more confident and experienced within the pay-for-performance realm.

The NAACOS report advises the Centers for Medicare & Medicaid Services (CMS) to change some of the risk models in the Medicare Shared Savings Program including MSSP Tracks 2 and 3 along with the Pioneer ACO and the Next Generation ACO programs. In particular, the report encourages restructuring the risk models.

“ACOs are extremely concerned about the direction the CMS is going not only in the proposed MACRA rules but also with the conflicts created by its other value-based payment programs such as bundled payment,” Clif Gaus, President and CEO of NAACOS, said in a public statement. “And when you add that to how much it costs to run an ACO, there's a significant number of ACOs ready to leave the [Medicare Shared Savings Program, MSSP] program.”

While accountable care organizations will need to adhere to the rules under the Merit-Based Incentive Payment Program (MIPS) or the Advanced Alternative Payment Models, it is important to note that the final MACRA ruling provides more flexibility to medical entities when it comes to meeting quality measures and the required reporting periods in 2017, according to Premier’s blog Action for Better Healthcare.

Under MIPS, clinicians will not need to report data from the full year in order to prevent a payment penalty and will be allowed a 90-day reporting period instead. Additionally, CMS will be putting $100 million toward small medical practices and rural areas in need of technical assistance adhering to MACRA regulations.

Accountable care organizations participating in the Medicare Shared Savings Program will also be allowed to participate in an enhanced Track 1 in order to qualify for an Advanced Alternative Payment Model and obtain the 5 percent payment boost. Other providers can participate in bundled payment models instead.

Based on findings from the Robert Wood Johnson Foundation and the Premier Research Institute, accountable care organizations are currently moving toward improving coordination efforts among community service resources along with preparing for MACRA requirements.

“Alternative payment models, such as ACOs, serve to shift the traditional fee-for-service model, which incents providers to do more rather than do better, to a value-based model that aligns incentives with measurable quality, cost and population health outcomes,” Timothy Lowe, PhD, Director of Healthcare Research at the Premier Research Institute, said in a press release. “As providers develop and implement alternative payment models to align with value-based payment policies, such as the new Quality Payment Program for physicians, it is critical to identify what is working and what is not to support continuous change and improvement.”

When accountable care organizations coordinate their efforts with social service agencies, they are able to succeed more effectively in population health management. The study results show that the ACOs targeted the health outcomes of patients with high medical spending and complex or chronic conditions, Health Affairs reported.

The leaders of the accountable care organizations surveyed in the study stated that they will be employing community health programs targeting chronic disease management, healthcare coordination, and patient education.

The results from the Robert Wood Johnson Foundation report indicate that 71 percent of surveyed ACOs are offering or plan to offer physical and behavioral healthcare. However, less than 25 percent of those surveyed believe there are enough staff members available to meet behavioral health needs of their patient population.

As such, working to connect these organizations to social service agencies is key in improving patient health outcomes. However, 89 percent of surveyed ACO leaders stated funding as a barrier to connecting their providers with social service programs.

“Despite these limitations, many ACOs are finding ways to bridge the divide between ACO health care providers and social services organizations,” Health Affairs stated. “For example, where community services are offered and care coordination has been poor, some ACOs are moving to serve as the central hub to enable community organizations to be more effective in meeting the needs of mentally ill and chemically addicted residents.”

“Also, despite insufficient funding, some ACOs are expanding their catchment areas to include other populations not included in Medicare and private-payer contracts. Activities extended to these catchment areas include smoking cessation programs for patients as well as caregivers; health education; assessing the need for, and providing, required equipment for patients to be monitored at home in their communities; providing care managers to help patients and their families navigate the health system; and working as a team with local community organizations to provide a coordinated response to patients’ needs.”

CMS and commercial payers will need to work with accountable care organizations to further improve their ability to take on financial risk under MACRA legislation and other value-based care programs as well as ensure enough funding is available to connect social service agencies with ACOs.

Dig Deeper:

How Medicare, Medicaid, and CHIP Guide the Health Payer Industry

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