How to Strengthen Accountable Care Organizations, MSSP

June 27, 2016 - Accountable care organizations (ACOs) continue to gain greater acknowledgement within the healthcare industry as the field transitions to value-based care reimbursement and moves away from the fee-for-service payment model. It began with the Medicare and Medicaid Innovation Center creating the Medicare Shared Savings Program (MSSP) and its subsequent rise of accountable care organizations.

Today, the number of ACOs have been proliferating across the country. More than 800 accountable care organizations are currently operating around the United States, according to a study conducted by Leavitt Partners and the Accountable Care Learning Collaborative.

Additionally, more than 1,000 partnerships are currently negotiating ACO contracts. In fact, accountable care organizations are treating and managing the health of 28.3 million patients. These statistics show just how much accountable care organizations have already influenced healthcare in this country.

While there have been positive results from accountable care organizations, more may need to be accomplished in order to close gaps with current policies related to the Medicare Shared Savings Program, according to a letter from the American College of Surgeons, the National Association of ACOs, the American Medical Association, and other healthcare organizations.

For instance, the letter states that the Centers for Medicare & Medicaid Services (CMS) should not compare the outcomes of ACO beneficiary populations to that of other accountable care organizations but to fee-for-service Medicare beneficiary segments of the population.

The multiple organizations also urge CMS to create a financial reward for ACOs that have improved the quality of care in order to further incentivize these establishments to invest in quality improvement projects. Currently, the Medicare Shared Savings Program only ensures that ACOs are able to share in their savings if quality performance benchmarks are met.

It is also vital for accountable care organizations to gain savings in order to continue operating with either public or private payers. There are three methods that ACOs could ensure greater cost savings for the long-term.

First, it is vital for these organizations to review and follow all state laws and regulations related to the operation of ACOs. For example, there are certain rules regarding the amount of control payers and providers hold over the management of an accountable care organization.

In the state of Michigan, a “corporate practice of medicine” law keeps a layperson from having any influence over the medical decision-making that only a physician or other healthcare worker could conduct. This type of law will need to be followed by any payers participating in an accountable care setting.

Another important step that ACO providers will need to follow is to pursue cost savings and quality improvements despite the fact that the beginning stages may not show immediate results. Investing time and commitment is vital when managing an accountable care organization.

Results from the Medicare Shared Savings Program have shown that it may take up to three years before cost savings are substantial and become worth the investment. As such, payers and providers will need to remain committed to this value-based care model in order to reap its benefits.

“The ACOs have shown that, in the first three years, they’re able to improve the quality. They both provide higher quality and they’re quality-improving from year to year. That’s a home run. In some respects, that’s been the real success story of ACOs. That’s a great story for beneficiaries,” Clif Gaus, the President and CEO of the National Association of ACOs, told HealthPayerIntelligence.com in an interview.

“The other side of that equation is the ACOs have to invest so much of their own money that without a quick return, they run out of money to continue. I believe that the ACO concept and model is still the best we have to lower costs and increase quality, but it can take a much longer time and needs greater rewards from the government to keep the movement growing.”

It is also important to incorporate risk-based strategies when developing payment contracts in an accountable care environment. This will bring ACOs more potential for high revenue and greater success, stated Mark Wagar, President of the Heritage Medical Systems, in an interview with HealthPayerIntelligence.com.

“While they need to be careful about assuming more risk, I think the biggest thing for ACOs is to be more aggressive,” Wagar said. “There are too many healthcare organizations with potential that are sitting on the sidelines and saying ‘Let’s do just shared savings because we can’t lose. We will bill for fee-for-service and if we happen to improve things, we get a bonus but otherwise, we don’t lose.’”

“While that may be a comfortable spot for healthcare organizations that aren’t familiar with value-based care in its more mature forms, it limits how much they can really control decision-making.”

“I think there is potential positive news with the movement of the federal ACOs toward risk-sharing and risk-assumption,” Wagar continued. “When we got into our Pioneer ACO, we were one of the first and we’re still staying in it and will move onto the next phase because we want to help demonstrate that independent practices as well as our large group organizations can have impact.”

Federal and state agencies, health payers, and providers will need to all come together to ensure that greater success can be garnered from accountable care organizations. By further improving upon these models of care, the Triple Aim of Healthcare could be achieved with patient health outcomes strengthening and overall healthcare spending declining.

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