Lured by MACRA bonuses, more Medi­care ACOs ven­ture into risk

Modern Healthcare - - NEWS - By El­iz­a­beth Whit­man To ex­plore Medi­care ACOs by pro­gram and risk level in 2017, visit ModernHealth­care.com/ Medi­careACO

“The ACOs con­sis­tently tell us that there is still a lot of un­pre­dictabil­ity in the bench­mark­ing, and they need time to im­ple­ment all of their pop­u­la­tion health best prac­tices and clin­i­cal trans­for­ma­tion tools.” Clif Gaus, CEO of the Na­tional As­so­ci­a­tion of ACOs

For the Ac­count­able Care Coali­tion of South­east Texas and the Ac­count­able Care Coali­tion of Ch­e­sa­peake, join­ing Medi­care’s Next Gen­er­a­tion ACO model sim­ply made sense. They took on sig­nif­i­cant fi­nan­cial risk in that new model, but it also gave them a great deal of flex­i­bil­ity to change the way they cared for pa­tients.

“We felt this was a great next step for our physi­cians,” said Jeff Spight, the pres­i­dent of Col­lab­o­ra­tive Health Sys­tems, a divi­sion of Univer­sal Amer­i­can that runs those ACOs and 16 oth­ers as joint ven­tures with physi­cians. “It gives physi­cians a lot more tools and ca­pa­bil­i­ties, and it gives them struc­ture to take the next steps in terms of man­ag­ing pop­u­la­tions.”

And it didn’t hurt that by join­ing Nex­tGen, physi­cians qual­i­fied for bonus pay­ments start­ing in 2019 un­der the Medi­care Ac­cess and CHIP Reau­tho­riza­tion Act. “MACRA’s been a won­der­ful cat­a­lyst” for con­ver­sa­tions with physi­cians who are in­ter­ested in fig­ur­ing out how to suc­ceed in APMs, Spight said.

The prospect of that re­ward is lur­ing a small but grow­ing number of ACOs into riskier con­tracts with Medi­care to qual­ify as par­tic­i­pat­ing in ad­vanced al­ter­na­tive pay­ment mod­els.

But that trend still ap­plies to a small mi­nor­ity of ACOs. The vast ma­jor­ity of Medi­care ACOs re­main in up­side-

only mod­els—they get to share in any sav­ings they achieve (as long as they also hit qual­ity tar­gets) but don’t risk los­ing money if costs in­crease. It’s also not clear that all ACOs tak­ing on more risk are fully pre­pared to do so.

“The ACOs con­sis­tently tell us that there is still a lot of un­pre­dictabil­ity in the bench­mark­ing, and they need time to im­ple­ment all of their pop­u­la­tion health best prac­tices and clin­i­cal trans­for­ma­tion tools,” said Clif Gaus, CEO of the Na­tional As­so­ci­a­tion of ACOs, a Wash­ing­ton, D.C.based or­ga­ni­za­tion rep­re­sent­ing more than 195 ACOs. “As ACOs gain ex­pe­ri­ence, they’re will­ing to take on more risk,” he said, but it takes time.

In January 2015, HHS set the tar­get of fun­nel­ing 50% of Medi­care pay­ments through al­ter­na­tive pay­ment mod­els and ty­ing 90% of fee-for-ser­vice pay­ments to qual­ity or value by the end of 2018. MACRA is part of that shift by chang­ing the way Medi­care pays physi­cians.

Un­der MACRA’s new Merit-based In­cen­tive Pay­ment Sys­tem, physi­cians must re­port on qual­ity, re­source use, clin­i­cal prac­tice im­prove­ment ac­tiv­i­ties and mean­ing­ful use of elec­tronic health records. Medi­care con­sol­i­dates those re­sults and then ad­justs pay­ments ac­cord­ingly. In 2019, physi­cians can re­ceive penal­ties or bonuses of up to 4%, a per­cent­age that will rise in­cre­men­tally to 9% in 2022. But providers can free them­selves of those re­quire­ments and qual­ify for bonuses if they have a sub­stan­tial amount of busi­ness in el­i­gi­ble al­ter­na­tive mod­els, which in­clude the riskbased ACO mod­els. This av­enue prom­ises bonus pay­ments of 5% for five years start­ing in 2019.

Most providers aren’t there yet. The CMS has es­ti­mated that in 2017 only about 10% of physi­cians will qual­ify as par­tic­i­pat­ing in ad­vanced APMs.

Three Medi­care ACO mod­els cur­rently qual­ify. But most of the par­tic­i­pants in the gov­ern­ment’s ACO ex­per­i­ments are in the one model that doesn’t.

In 2017, only 42 of 480 ACOs in the Medi­care Shared Sav­ings Pro­gram are in tracks that qual­ify as ad­vanced APMs. Twenty-eight new ACOs joined the Next Gen­er­a­tion model, bring­ing that pro­gram to 45. The CMS also has rolled out an ac­count­able care model in­tended to im­prove qual­ity and ef­fi­ciency in the treat­ment of end­stage re­nal dis­ease. This year there are 37 par­tic­i­pants in the Com­pre­hen­sive ESRD Care pro­gram, which also qual­i­fies as an ad­vanced APM.

Be­gin­ning in 2018 the CMS will of­fer Track 1+, a two-sided model with less down­side risk that’s meant as a bridge to the more ro­bust op­tions while also al­low­ing providers to choose the APM av­enue un­der MACRA.

“More and more (ACOs) are as­sum­ing more risk,” said Steven Short­ell, a pro­fes­sor of health pol­icy and man­age­ment at the Univer­sity of Cal­i­for­nia at Berke­ley. “My pre­dic­tion is that the pace of that change is go­ing to ac­cel­er­ate.” But, he said, “I don’t think it’s go­ing to hap­pen overnight.”

Some ACOs are con­fi­dent about tak­ing on down­side risk. They share cer­tain hall­marks, namely that they are of­ten physi­cian-led and have ac­cu­mu­lated years of ex­pe­ri­ence through other Medi­care ACO pro­grams.

Both the Ac­count­able Care Coali­tion of South­east Texas and the Ac­count­able Care Coali­tion of Ch­e­sa­peake were cre­ated as Next Gen­er­a­tion ACOs, Spight said. But they were not en­tirely new to the world of ac­count­able care when they joined Nex­tGen, which South­east Texas did in 2016 and Ch­e­sa­peake in 2017. The Ch­e­sa­peake ACO, for in­stance, com­bined four ACOs in Mary­land and Vir­ginia that had op­er­ated in Track 2 of the Shared Sav­ings Pro­gram in 2016.

Sev­eral el­e­ments of the Nex­tGen pro­gram were ap­peal­ing, Spight said. It of­fers waivers, such as ex­emp­tions to the rule that Medi­care ben­e­fi­cia­ries must spend three nights in a hospi­tal be­fore Medi­care will pay for a skilled­nurs­ing fa­cil­ity. Over­all, it ex­panded physi­cians’ abil­ity to con­trol pa­tient care be­yond the typ­i­cal clin­i­cal realm.

“Our physi­cians can now fo­cus on how the de­liv­ery sys­tem should look out­side the clinic walls. It’s putting them in charge of which spe­cial­ists, which post-acute care fa­cil­i­ties, which home-care set­ups do we re­ally want to home in on,” Spight said. “Nex­tGen gives us an eco­nomic way to do that, a le­gal way to do that, and it gives us vol­ume to do that.”

An­other or­ga­ni­za­tion that started in Nex­tGen in 2017, APA ACO, had sim­i­lar ex­pe­ri­ence be­fore join­ing. As a joint ven­ture between Apollo Med­i­cal Hold­ings and Net­work Med­i­cal Man­age­ment, which merged in De­cem­ber, it com­bined the ex­per­tise of both.

Apollo Med­i­cal’s Apollo-Med ACO was an early par­tic­i­pant in the Medi­care Shared Sav­ings Pro­gram. As a group of hos­pi­tal­ists, Apollo Med­i­cal had been shar­ing risk with hos­pi­tals for over five years and had al­ready in­vested in the tech­nol­ogy nec­es­sary to man­age high-risk pa­tients, said Gary Au­gusta, ex­ec­u­tive chair­man of Apollo Med­i­cal Hold­ings, an in­vestor-owned com­pany based in Glen­dale,

GETTY IM­AGES

More Medi­care ACOs are ac­cept­ing fi­nan­cial risk as MACRA ratch­ets up in­cen­tives. But they’re still just 17% of the to­tal.

Source: Na­tional As­so­ci­a­tion of ACOs

Note: Track 3 was in­tro­duced in 2016. The Pi­o­neer model is no longer ac­tive.

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