Medi­care ACOs gar­ner bonuses and penal­ties

Modern Healthcare - - NEWS - By Melanie Evans

Medi­care’s ac­count­able care or­ga­ni­za­tion ini­tia­tives have im­proved qual­ity of care, but cost sav­ings have proved more elu­sive.

ACOs that started in 2012 have so far re­duced Medi­care spend­ing by $817 mil­lion, with hos­pi­tals and physi­cians keep­ing $445 mil­lion for their ef­forts, the CMS re­ported last week.

Those fig­ures, which in­clude re­sults for about 250 Medi­care Shared Sav­ings and Pi­o­neer ACOs, un­der­score the chal­lenges of th­ese ex­per­i­men­tal pay­ment and de­liv­ery mod­els. The ACO pro­grams, launched un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act, re­ward doc­tors and hos­pi­tals that meet cost and qual­ity tar­gets for a de­fined ben­e­fi­ciary pop­u­la­tion; some ACOs face fi­nan­cial penal­ties for not meet­ing tar­gets.

Eleven of 23 Pi­o­neer ACOs earned fi­nan­cial bonuses that to­taled $68 mil- lion dur­ing the pro­gram’s sec­ond year, while three faced penal­ties. Per­for­mance on qual­ity im­proved for 28 of 33 mea­sures.

In the Shared Sav­ings Pro­gram, 53 of 204 or­ga­ni­za­tions with avail­able data slowed spend­ing enough to re­ceive bonus pay­ments that to­taled more than $300 mil­lion. One will face a penalty of $4 mil­lion.

Medi­care started with slightly more than 110 ACOs in 2012 and now con­tracts with nearly 350 hos­pi­tals and health sys­tems. The launch and op­er­a­tion of Medi­care ACOs has been some­what rocky. In June, the Brook­ings In­sti­tu­tion re­leased eight pro­posed pol­icy changes.

New York’s Mon­te­fiore Med­i­cal Cen­ter ACO will keep $13 mil­lion of $24.5 mil­lion it saved last year in the Medi­care Pi­o­neer pro­gram, said Dr. An­drew Racine, Mon­te­fiore’s chief med­i­cal of­fi­cer.

The or­ga­ni­za­tion con­tin­ues to invest in pri­mary and pre­ven­tive care to re­duce com­pli­ca­tions and pre­vent hos­pi­tal­iza­tions among the chron­i­cally ill.

Banner Health’s Pi­o­neer ACO will keep $9 mil­lion of the $15 mil­lion it saved dur­ing its sec­ond year in the pro­gram. Chuck Lehn, CEO of the Phoenix-based sys­tem’s ACO, said Banner is pleased with its progress.

But Sharp Health­Care in San Diego re­cently said it would exit the Pi­o­neer pro­gram, fol­low­ing nine other par­tic­i­pants that with­drew at the end of the first year. The largest player in the Shared Sav­ings Pro­gram—in­surer Univer­sal Amer­i­can—has backed out of sev­eral of its ACO ven­tures that strug­gled to pro­duce a re­turn.

The CMS in­tro­duced pro­posed changes to ACO qual­ity re­port­ing in July and is ex­pected to re­lease new rules for ACOs soon. It pro­poses of­fer­ing ACOs a new bonus based on qual­ity im­prove­ment.

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