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Commentary

ACOs Matter More Than Ever Despite Uneven Growth


June 28, 2019

By Robin Lloyd, chief commercial officer, Health Fidelity

Robin LloydRobin Lloyd, chief commercial officer, Health Fidelity, discusses the latest trends and policy changes impacting ACOs and reflects on new federal policies, highlighting future opportunities in value-based care.

While CMS Administrator Seema Verma’s broadsides against Medicare for All may grab headlines, her keynote at the National Association of Accountable Care Organizations (NAACOs) 2019 spring conference affirmed the Centers for Medicare & Medicaid Services’ (CMS) commitment to expand, improve, and eventually mandate value-based care models.

For those of us supporting providers through this complex and changing reimbursement landscape, the headline was the inevitability of providers taking on downside risk under the Pathways to Success models.

Value-based care’s broad implementation is no longer a matter of “if,” but “when and how.” These details remain unclear, but CMS is clearly focused on accelerating the pace of adoption through model innovation.

First, some context: As Ms Verma addressed in her keynote, adoption of value-based care and downside risk are significant challenges for providers. Only 10% of clinicians are participating in Advanced Alternative Payment Models and/or taking on significant risk.

This is largely a matter of implementation, not value. Many providers are hesitant to take on risk, blaming regulatory uncertainty and the high cost of capturing and reporting required measures. Nonetheless, within the Medicare ACO models, covered lives have increased to 12.3 million in 2018. That’s up from 7.7 million in 2015 and 3.87 million in 2012 and 2013.

What’s more, CMS credited the Medicare Shared Shavings Program—the largest ACO model—as saving $314 million in 2017. That’s the first round of savings for the program since 2013, but it marks a big step in the right direction. This paints a promising picture for accountable care organizations (ACOs).

There have also been documented material improvements in quality. Between 2016 and 2017, 67% of ACOs improved quality scores. A March study of two primary care physician-led ACOs,  published in the American Journal of Managed Care, found annual wellness visits were associated with reduced hospital and outpatient spending while improving patients’ health.

And while some provider organizations are leaving the ACO programs, new research published in Health Affairs, shows ACOs are less likely to leave the program after their third year. This suggests organizations that commit to value-based care as part of a multiyear strategy are realizing the benefits these programs are designed to deliver.

CMS is now looking to expand on the success of these value-based programs and push more organizations to join risk-bearing arrangements. During the keynote at NAACOs, Ms Verma strongly hinted that mandatory two-way risk models are on their way. The administrator acknowledged that what works for a large hospital doesn’t work for a small, physician-led practices, and different models are necessary to drive maximum participation.

This was a primary driver behind the newly announced Primary Cares Initiative (PCI), a major topic of conversation at NAACOs. The PCI objective is stated to, “Improve quality, improve patient experience of care, and reduce expenditures…by increasing patient access to advanced primary care services.” To do so, the PCI offers two different models for primary care practices to transition into risk-based payment arrangements, specifically addressing practices caring for patients with complex chronic needs or serious illness. It’s an overdue step in laying out pathways for small, resource-limited, primary care practices to embrace risk, taking advantage of shared savings while maintaining revenue continuity.

Still, there are questions about payment model redesigns and their impact on the ideal structure for delivering care. How will joint incentives, shared savings, and technology be integrated in a way that makes these efforts viable and measurable?

Ideally, technology bears the burden of capturing, understanding, and facilitating action on critical disease risk and outcomes data. This enables provider staff to focus on their areas of expertise (coders code, doctors treat patients, etc), while organizations experiment with care delivery models that maximize performance.

Risk capture and risk adjustment solutions have become must-have tools for ACO success under this (or any) risk-bearing arrangement. With more lives being covered by ACOs, identifying risk-based populations is a necessity for provider business strategies going forward. Once disease risk is more accurately identified, providers can more effectively treat those populations through coordinated care across locations and specialties.

It’s a win-win. That’s why despite the challenges, limits, and unintended consequences of current value-based care models, the NAACOs conference left me even more excited about the opportunities ahead.

Beneath the bluster in Washington, the regulatory environment is becoming more stable, committed, and responsive to those driving the implementation of accountable care models. Providers are innovating and adapting to this environment, leaders are demonstrating success at improving both costs and outcomes. Best practices are being established and shared, and social factors—food or housing insecurity, for example—are even starting to be quantified and addressed.

The key for those of us striving to enable this progress is to continue helping providers address complex medical conditions, focus on patient outcomes, and do so with the confidence that their organizations will achieve financial success as well.

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