In recent years, healthcare reforms have set out to reduce constantly rising medical costs, improve coverage for the many Americans who lacked primary care access, and advance population health outcomes. Over the past few years, the accountable care organization (ACO) has become one popular mechanism for achieving these goals.
The first ACOs were formed after passage of the Affordable Care Act. The development of the Medicare Shared Savings Program (MSSP) by the Centers for Medicare & Medicaid Services (CMS) prompted private payers to take note of the approach and also begin partnering with accountable care organizations and medical providers.
National payers such as Aetna and Humana, have followed CMS and invested in expanding accountable care organizations over the last several years in order to improve patient health outcomes, quality of care, and cut spending.
However, commercial payers have faced several major obstacles when working with providers to manage a successful accountable care organization.
Payers have had to play a much bigger role in advancing patient engagement and patient outreach within ACOs than in previous partnerships with physician groups, and the use of population health management and expansion of preventive care are new territory for payers.
Within an ACO, payers have had to learn which payment models lead to the best results and how to help providers successfully take on financial risk. Since providers are wary of assuming this risk, payers have had to slowly transition to two-sided shared savings models and work to improve clinician engagement and incorporate community resources.
Success under risk-based financial models is measured by quality metrics, which gauge how well providers deliver services, meet the needs of patients, and improve outcomes. In order to manage quality improvement, payers need to work with providers to choose the right measures to track.
Whether through the Medicare Shared Savings Program or a private payer, providers mainly experienced with fee-for-service arrangements have had difficulty meeting HEDIS measures and claims-based quality metrics.
Success in accountable care can also be a factor of time. It takes a fair amount of time to share in cost savings and garner revenue from accountable care organizations, according to Amy Oldenburg, Vice President of Network and Product Strategy Accountable Care Solutions at Aetna.
“True transformation is a long-term endeavor,” said Oldenburg. “We know that it takes at least three years for motivated ACOs to make changes necessary to impact real savings and quality improvements.”
“We believe transforming health care will help reduce waste, improve quality, improve member/patient satisfaction, and improve overall employee health and productivity,” Oldenburg added. “So we see this as well worth the commitment and investment of time and resources to get there.”
Payers and providers also find it challenging to coordinate and share data effectively within the healthcare system. Sharing both clinical and claims data can paint a better picture of how to improve patient health outcomes within an accountable care organization.
A number of stakeholders and experts have provided their opinions on ways to tackle these obstacles and methods for payers to help providers succeed within an accountable care organization.
Payers Struggle with Patient Engagement in ACOs
Health insurance companies operating within an accountable care organization may find that patient engagement and patient outreach are more vital than within previous reimbursement models. In order to truly reduce medical costs and improve care quality, patients will need to be engaged in their care because it would improve overall health and lead to fewer expensive emergency room visits. Patients will need to follow doctors’ orders for exercise, nutrition, and medication management.
However, patients often don’t have a common resource to engage in their care since a multitude of online and mobile health tools are creating more confusion around instead of a clear pathway toward improved health. For example, a study published in the Journal of Biomedical Informatics found that mobile health tools led to 19 usability problems for diabetes patients.
Instead of patients using tools not supported by medical expertise, physicians could implement patient portals to support engagement. Such portals can assist members by providing key clinical information directly from their primary care physicians.
Creating and implementing a patient portal as well as sharing electronic communications could improve patient engagement within an accountable care organization.
In order to support healthier lifestyle choices among their members, payers could implement wellness incentive programs. When operating an accountable care organization, payers could provide patients with lower health insurance rates if the members adopt behavioral changes such as quitting smoking, obtaining a gym membership, and following through with health screenings.
Health insurance companies can also improve patient outreach within ACO networks through phone call reminders to ensure patients take their daily medications and receive preventive screenings. These steps could go a long way toward preventing hospital readmissions and providing a stronger communication system with their membership.
Cell phone and smartphone applications could be used to improve patient engagement as well. These mobile health apps can be used to promote medication adherence.
One program called MEssaging for Diabetes (MED) has shown that mobile health applications can be relatively effective for patients with chronic disease.
The program included daily text messages asking patients if they had taken their prescribed pills as well as weekly automated phone call providing feedback on a patient’s medication adherence. Incorporating mobile health tools to serve patients within an accountable care organization could prove useful for greater engagement.
Another way that healthcare payers could strengthen patient engagement within an accountable care organization is by incorporating user-friendly patient billing systems and member portals. Streamlined billing systems could improve patient retention while member portals allow consumers to have their questions answered more quickly.
For patient outreach, payers are advised to send out mailings reminding patients of important doctors’ visits and diagnostic testing. Price transparency can also play an important role in stronger patient engagement. Health plans that have become more transparent in their pricing strategies including premiums, deductibles, and out-of-pocket costs are more likely to retain members for the long term.
Payers can also build a successful accountable care organization by bringing more focus on preventive healthcare services. Through both new payment and healthcare delivery models, payers can improve patient engagement with wellness by promoting preventive care.
Some health insurers are positioning themselves even more deeply in wellness through patient wellness programs such as the Blue Zone Project. The project consists of a number of stakeholders and community organizations that come together to make healthier lifestyles easier to achieve for the families in their neighborhood. Some of these initiatives include making streets more bike-friendly and making sure restaurants serve healthy meals.
One health payer, Wellmark Blue Cross Blue Shield, partnered with Blue Zone to achieve the goals of the Iowa Healthiest State Initiative. The Blue Zones Project of Southwest Florida recently received national recognition during a summit in Fort Worth, Texas.
Another important strategy from the Blue Zones Project comes in the form of presenting food items in a specific format at grocery stores. The changes being made at grocery stores in Blue Zones cities make it easier for shoppers to resist high-sugar and fatty foods while focusing on healthier options. Payers, providers, and community organizations including restaurants and grocery stores are coming together to implement these wellness initiatives.
More accountable care organizations have begun to understand the importance of incorporating social services and community-based resources to better engage their patients. A report published by the Premier Research Institute and the Robert Wood Johnson Foundation found that leaders of accountable care organizations are looking for more direction from community service organizations and social service providers in order to improve population health management. Payers may need to begin incorporating community services when managing accountable care organizations.
Alternative payment model contracts bring change
When taking on the accountable care organization, healthcare payers need to implement alternative payment models and value-based care reimbursement. However, Dr. Farzad Mostashari, Founder of Aledade Inc. and former National Coordinator for Health IT, has pointed out that private payers need to catch up to CMS in terms of the design of alternative payment models.
“I see some positive trends just in the past two years, but private payers, by and large, are still behind CMS in terms of making it easy for organizations to apply for and qualify for these models,” Mostashari said.
“Medicare has an application process that is complicated but predictable, whereas with many private payers, the process itself is opaque and the outcome uncertain. I would strongly suggest that private payers institute more predictable processes and requirements as well as boilerplate contracts that are based off of CMS templates and a clear process for how organizations can apply for and get those risk, value-based contracts.”
One survey from Premier also found that insurers are not moving forward with value-based care quickly enough. Providers are seeking to transition from fee-for-service at a faster pace and aren’t finding payers to partner with in this regard.
Since providers must keep up with demands from CMS, many are also looking for ways to streamline claims processing and reporting by having similar payment models across public and private payers, said Mostashari.
As such, private payers may need to align their payment models with the Medicare Shared Savings Program when operating accountable care organizations. This will help reduce administrative burden among providers.
Some common Medicare alternative payment models include shared savings, the Advance Payment ACO Model, and the Pioneer ACO Model. The Medicare Shared Savings Program currently runs 433 accountable care organizations, according to CMS.
Accountable care organizations can operate through two tracks within the Medicare Shared Savings Program: Track 1 or Track 2. Track 1 allows providers to take on one-sided shared savings, which means no risk of financial losses during the initial three years of operation. Most ACOs choose Track 1. For Track 2, the ACO must take part in a two-sided shared savings model in exchange for a greater portion of savings but also greater risk in financial losses.
The CMS Advance Payment Model consists of assisting rural providers and physicians who provide high quality care for Medicare beneficiaries. Selected providers from rural areas receive upfront, monthly payments from CMS to further invest in their care coordination platforms.
Commercial payers can follow some of the payment models CMS has set for accountable care organizations. Some common ACO payment models for commercial payers include one-sided shared savings, two-sided shared savings, bundled or episode payments, partial capitation payments, and global payments.
Bundled payments consist of reimbursing providers after an episode of care, which could include a payment covering the entirety of a hospitalization, surgery, recovery, and rehabilitation. Partial capitation consists of a fixed dollar amount for specified medical services that patients obtain in a given time period, according to Catalyst for Payment Reform.
Global payments or full capitation with quality ensures that providers receive a fixed dollar payment for medical care patients obtained over a specific time period with the ability to receive payment adjustments based on quality performance and patient risk.
Payers will need to slowly position providers to take on more financial risk over time. Managing financial risk in an ACO can be complex especially when working with providers who have not had much experience with taking on monetary risk.
As seen with the Medicare Shared Savings Program, more providers are choosing the safer route and sticking with the one-sided savings model when treating patients within an accountable care organization. As many as 98 percent of ACOs are choosing one-sided shared savings in the Medicare Shared Savings Program. How can payers successfully transition to alternative payment models within an ACO and position financial risk onto providers?
When payers are seeking to create a successful ACO, partnering with the top-performing specialists, hospitals, and primary care practices will be key to allowing payers to position more financial risk onto providers with experience in value-based care reimbursement and who are more prepared to take on new payment models. Additionally, payers and stakeholders should invest in patient outreach, provider engagement, and community-based initiatives.
Accountable care organizations that take on more financial risk have shown positive results. These providers end up with more shared savings, according to findings from the 2015 program year for the Pioneer ACO Model and the Medicare Shared Savings Program.
In 2015, ACOs garnered more than $466 million in program savings, which includes both Pioneer ACOs and those operating through the Medicare Shared Savings Program. Pioneer ACOs are the ones with greater experience in care coordination and have been able to take on more financial risk based on quality performance.
During the fourth performance year, nine out of the 12 Pioneer ACOs met quality performance scores above 90 percent. Results further show that ACOs with greater experience tend to perform better over time. In 2015, Pioneer ACOs brought in more than $37 million in savings for the Medicare program. Since Pioneer ACOs have taken on more financial risk and have greater experience, these accountable care organizations have garnered more shared savings.
Tracking quality improvement measures
When forming an accountable care organization and implementing a new payment contract, payers and providers will need to decide which measures to track and what type of thresholds to meet in order to set benchmarks for financial arrangements and improve the health outcomes of their patient population.
Within the Medicare Shared Savings Program, providers have found it difficult to meet the thresholds for certain quality metrics. For example, the Advisory Board reports that, at the end of 2015, a total of 65 accountable care organizations participating in the Medicare Shared Savings Program learned that they had missed out on bonus payments from CMS for not meeting their quality improvement benchmarks. These providers had not met measures regarding avoidable hospital admissions for heart failure patients and patients with chronic obstructive pulmonary disease.
In order to improve ACOs ability to meet quality performance metrics, payers and providers will need to incorporate patient attribution in population health management. Patient attribution involves assigning a provider operating in an ACO to be held accountable for the cost and quality of care for a member based on their claims data.
This provider is often the primary care doctor and many health plans today require members to choose their PCP before enrolling. Primary care physicians play a key role in patient attribution and population health management, which should help ACOs meet quality metrics.
Payers will also need to meet HEDIS measures and claims-based quality metrics. In order to successfully meet these benchmarks, payers should work with their accountable care organization to incorporate electronic health records (EHRs) and data-driven protocols. Such technology and medical data will help ACOs boost their quality improvement scores.
“There are a number of quality measures that are specific to the Medicare Shared Savings Program several of which are clinical in nature and others are more claims-based measures,” explained Dan Bowles, ACO Executive Director at Aledade, Inc. “The measurements are really being taken directly through technology interfaces such as EHRs.”
“Provided that the system is meaningful use certified, we’ll partner with a practice that is on any electronic health record and we’ll build an interface there to access that data and help assess various quality measures.”
“With respect to some of the other data points that we’re working with the various practices on, a lot of it begins and ends with the claims data,” Bowles continued. “That gives us good surveillance into various quality metrics and allows us to put together data-driven and evidence-based protocols that allow for better patient care and improved quality measures.”
Thomas Mackey, PhD, a Nurse Practitioner from the University of Texas Health Services, also discussed the importance of electronic medical records (EMRs) with HealthPayerIntelligence.com in November 2016. In order to meet HEDIS quality measures, payers and providers will need to update EMR health maintenance templates and use it to drive provider behavior, said Dr. Mackey.
“[Providers need to] have HEDIS measures all adequately listed in their electronic medical record. When a physician hasn’t met a particular HEDIS measure, it turns up in red,” noted Mackey. “Doctors need to make sure that the EMR health maintenance templates are up to date with the current HEDIS measures. The EMR is so important because they drive provider behavior.”
Additionally, payers can send out mailings to remind their members of health maintenance check-ups. Since many HEDIS measures are focused on preventive screenings, sending reminders will increase the likelihood members will obtain diagnostic testing and payers could reach higher HEDIS scores. Healthcare payers are also advised to boost engagement with clinicians and medical staff to meet HEDIS measures.
“The number one thing I would suggest is to make sure your staff is engaged,” Mackey continued. “The challenges have to do with getting the practice and the people in that practice—I don’t mean just the physicians or the nurse practitioners but I mean the front desk as well as the nurses in the back—to help meet the HEDIS measures when a patient comes in.”
Finally, strong data sharing protocols between providers and payers is imperative for improving quality performance scores. Better data sharing leads to better management of patients’ health and improved HEDIS scores.
Managing care coordination with provider organizations
Payers and providers often find it challenging to coordinate services within the healthcare system as well as effectively share medical or claims data. However, Bowles explained that care coordination could be improved when ACOs partner with a health information exchange and other large healthcare systems. Additionally, ACOs could also create their own health information exchange. Such actions could help since these organizations would be more capable of efficiently sharing claims data among multiple providers and payers.
“In terms of the challenges we’ve overcome or some of our big wins in terms of milestones, I would say a big one has been in trying to identify different ways to coordinate with other provider organizations in the healthcare system. We’ve got a partnership for data exchange with Baptist Health, which is the largest health system in the state. We’ve also partnered with SHARE, which is the health information exchange for the state,” added Bowles.
Through partnerships with a health information exchange, primary care physicians were able to get more information about patient discharges and hospital admissions. Additionally, payers providing comprehensive claims data led to better patient care coordination for providers, said Bowles.
“[Partnering with a health information exchange] really allowed our providers to get access to information on discharges and other hospital-based episodes that their patients may encounter. In terms of working with the payer specifically in the MSSP, the access to the claims data in a more comprehensive format has really given the providers access to information that’s vitally important to delivering better and more coordinated patient care,” Bowles noted.
One of the biggest challenges for accountable care organizations is generating shared savings. This is especially true among Medicare ACOs. While results from 2015 show that 433 ACOs participating in the Medicare Shared Savings Program and 12 Pioneer ACOs brought in $466 million in savings, only half of Pioneer ACOs and 119 MSSP ACOs actually shared in these cost savings.
Payers and providers are finding that earning shared savings, reducing spending, and meeting quality benchmarks are relatively complex and more strategies need to be adopted to overcome these challenges. However, data sharing through a health information exchange could enable ACOs to earn shared savings through greater care coordination.
Health data exchange between payers and providers is an important part of ensuring that spending can be cut and quality measures can be reached, said Erin Page, President of the Accountable Care Coalition of Texas.
“A big challenge when you get into ACOs is the availability of data,” Page said. “Making sure hospitals let you know when patients are admitted. That has been a real challenge where the hospitals don’t want to be as open with their data. There are many hospitals who we work with that we get information on a daily basis so we do know who’s in the hospital. But we have many other hospitals that basically say, ‘Unless your doctors are going to act as hospitalists, we’re not going to let you know who’s in the hospital.”
“[The challenges include] consistent availability of data [and] making sure we know where the patients are,” Page added. “Part of the way we solve for that is making sure we engage directly with the physicians on EMRs and even sending clinical folks into the physician practices so that we can get data and also help them coordinate care.”
Some solutions for generating more cost savings and meeting quality metrics include improving engagement with physicians by sharing data through EMRs and bringing hospitals into the ACO network.
A Commonwealth Fund study discovered that ACOs with participating hospitals have three times as many specialty physicians and twice as many primary care doctors while 63 percent of these ACOs provide more comprehensive care.
Incorporating hospitals within an ACO network and engaging with physicians through greater health information exchange could help payers reduce spending while accountable care organizations could earn more shared savings.
The factors necessary for success in accountable care models
In recent years, more commercial payers have become interested in expanding the use of value-based care payment contracts as well as increasing ACO participation. However, payers have seen a number of challenges emerge when beginning their journey in accountable care.
Payers may find that their patients need greater engagement in order to improve overall population health outcomes but are unsure of where to begin. Creating patient or member portals, incorporating wellness incentive programs, and mobile health applications could go a long way to improving patient engagement. For instance, a simple text message could remind patients to take their daily medications. Mailings could be used to emphasize the importance of preventive health screenings.
Another challenge for private payers is the fact that they’re behind public programs in terms of alternative payment models. However, there are a number of new payment structures that payers interested in accountable care should begin to familiarize themselves with such as one-sided shared savings, two-sided shared savings, bundled or episode payments, partial capitation payments, and global payments.
In order to achieve greater success, payers will also need to incentivize providers to slowly take on more financial risk. Working with top-performing hospitals will also help since these providers are more experienced in accountable care and alternative payments.
One difficulty payers may face when running an accountable care organization is the potential to lose out on shared savings as a result of missing the mark on quality benchmarks. Greater focus on population health management and claims data analysis will be key to meeting quality performance measures.
Medical data sharing and care coordination may also pose certain complications for payers and providers operating in an accountable care organization. One potential solution is to partner with a health information exchange and large hospital systems. That way, payers would be working with entities already experienced and capable of improved clinical and claims data sharing.
Some accountable care organizations operating through the Medicare Shared Savings Program have also been unable to earn shared savings. Experts advise such ACOs to improve medical data exchange, boost provider engagement, and contract with hospital systems. These factors could bring healthcare spending down, help providers meet quality benchmarks, and earn shared savings.
When payers incorporate factors such as strengthening patient engagement and improving care coordination, ACOs are likely to generate savings and bring greater patient satisfaction.