ACO Measurement Helps Payers, Providers Achieve Risk-Sharing Goals

October 30, 2017

During a presentation at the NAMCP Fall Forum 2017, David V Axene, FSA, FCA, CERA, MAAA President and Managing Partner Axene Health Partners, outlined strategies payer can use to get the most out of risk-sharing contracts.

Mr Axene’s presentation, entitled “Evaluating ACO Performance: How to avoid getting ripped off in your risk deals,” began by outlining how ACO participation can be beneficial for patients, providers, and health plans. These partnerships, he explained, reward providers who meet goals tied to quality measurements—which, in turn proliferate the use of valuable, quality care.

He explained that in order for payers to adequately take advantage of ACO participation, they need to be able to accurately and reliably measure ACO performance. Through better measurement, payers will gain the leverage to withdraw from or improve ACOs that are performing poorly and maximize participation with providers who exceed goals.

“Improvement tends to follow measurement,” Mr Axene said during the presentation. “We need to understand who is performing and who isn’t. This enables ranking of ACOs to see what works and what doesn’t.”

During the presentation, he outlined some measurement strategies including using the Healthcare Improvement’s Triple Aim. He noted that ACOs are often measured using per member per month costs, targeted rate trends, and medical loss ratios.

“[It’s] Important that the target is reasonable, so performance against that target is meaningful,” he said. According to the presentation, payers must also take into account geographic differences, network differences, and the scope of services—and calibrate measurement to account for these differences.

He explained that through accurate measurement of ACOs, health plans will then be in the position to ask how ACOs are containing costs, and how they are impacting membership growth.

David Costill

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