Population Health Vital for Medicare ACO Models to Succeed
The Medicare ACO models are currently facing some significant challenges such as taking on more risk while still early in their development.
By - Accountable care organizations (ACOs) have taken on a larger role in delivering services throughout the continuum of care. Initially, these establishments were created under the Medicare Shared Savings Program but have slowly moved toward contracting with private payers. Nonetheless, Medicare ACO models are still some of the more impressive accountable care initiatives established in the country.
However, a recent report from the National Association of ACOs (NAACOS) stated that Medicare ACO models currently stand “at a crossroads” and new policies may need to be implemented in order to keep these accountable care organizations flourishing for years to come.
First, the NAACOS report recommends the Centers for Medicare & Medicaid Services (CMS) to incorporate the initial investment that Medicare ACO models make when calculating accountable care risk.
Also, it is advantageous to include all CMS accountable care organizations taking part in advanced alternative payment models. Additionally, the paper outlines the importance of prioritizing population-based payments including ACOs among the many CMS programs currently operating.
The future of Medicare ACO models will depend upon ongoing reforms to the Medicare Shared Savings Program. With MACRA modifying the healthcare setting and ongoing efforts by the Republican base to repeal the Affordable Care Act, a wide number of reforms are affecting the Medicare program and CMS will likely need to strengthen the way it operates with accountable care organizations.
The Medicare ACO models are currently facing some significant challenges such as taking on more risk while still early in their development as well as their struggle to compete among multiple CMS programs in an effort to guarantee shared savings.
There are currently three tracks for ACOs to take in the Medicare Shared Savings Program and only the first track has no downside risk for the healthcare delivery system. ACOs can remain in the first track for no longer than six years. CMS has often encouraged ACOs to take on more downside financial risk, which is expected to benefit the patient population.
While CMS may need to provide more regulatory assistance to Medicare ACO models, hospitals that are partnering with accountable care organizations may also need help meeting the many challenges of the changing healthcare landscape.
The American Hospital Association and the Robert Wood Johnson Foundation released a report outlining how accountable care organizations are affecting the operation of hospitals around the country.
Risk-sharing payment models often seen within the ACO tend to have a large impact on the revenue cycle of hospitals. There have been a variety of different risk-sharing options and programs open for hospitals to implement for their Medicare beneficiaries. Medicare ACO models have also had to compete with bundled payment programs based on reimbursing an episode of care.
In order to keep hospitals sustainable and profitable in the midst of a changing landscape and new programs like accountable care organizations, the report describes the importance of leveraging population health management. Using population health, disease prevention can be incorporated and the rate of acute care costs may decline over time. Incorporating health information technology and more effective patient data analysis could also lead to better health outcomes.
Gregory Scrine, Managing Principal at healthcare consulting company Lumeris, offered his perspective in an interview on how to design an effective accountable care organization.
“Several criteria need to be met in order to set up a successful and workable accountable care organization. The first core component is having the right organizational design and leadership governance. Physician engagement is key to the success of an ACO and, consequently, the efforts of setting up an ACO need to be physician-driven in order to achieve the desired results,” said Scrine.
“Substantial physician participation and governance, including a majority of the board on a clinical-integrated network entity pursuing ACO activities is absolutely critical,” he continued. “The second key element is securing the necessary organizational structural components. Whether this is in the context of risk-contracting on behalf of network members via the shared savings model with CMS, or a relationship with a commercial payer, having the right legal organizational set-up for the network is essential.”
“The third element is a care management function that is essentially a set of resources and programs that work with member provider organizations,” Scrine added. “This set-up is centered on achieving the Triple Aim.”
“The fourth key element for ensuring the success of an ACO is a payer strategy and a payer market that has willing payer partners. Having access to covered lives either through a Medicare plan or through a commercial payer makes it possible to set up value-based compensation arrangements. The final element is having an infrastructure for well-functioning data. Information is the oxygen that helps an ACO thrive,” concluded Scrine.
CMS and partnering organizations could bring greater success for Medicare ACO models and hospitals by addressing the challenges, especially risk-based payment strategies, that these entities must face. Only when this is accomplished will the Triple Aim of Healthcare become more achievable and healthcare spending could be reduced while quality of care moves upward.
Dig Deeper:
How CMS Could Boost Operation of Accountable Care Organizations
New Ruling in Medicare Shared Savings Program Changes Payment
