Value Based Payment

Latest ACO Trends Identified

April 23, 2018 1:21 pm

Recent Medicare ACO data indicate that few beneficiaries have been opting into ACOs, most ACO savings have come from post-acute care, and specialists have comprised a large share of physician participants.

April 20—Although private accountable care organizations (ACOs) appear to be gaining ground, the Medicare versions are still leading—amid challenges.

About one-fifth of large employers are contracting with or promoting ACOs offered by health plans, according to the most recent member survey by the National Business Group on Health (NBGH). And that movement into ACOs could accelerate, with another 26 percent of companies saying they were considering promoting or contracting with ACOs as soon as 2019.

“ACO strategies are becoming more common,” Alisa Ray, a vice president of NBGH, said this week at a Washington, D.C. meeting.

Many ACOs that work with employer-sponsored insurance plans are a “market-specific implementation” or “pilots in a handful of locations where you have appropriate scale to test capability and effectiveness,” she said.

Aspects of ACO participation in which employers still have large degrees of uncertainty include profit, care delivery, consumer experience, and overall cost.

“There’s a lot of play in all of those variables, a lot of wobble,” Ray said in an address to business leaders. “I think a lot of you are feeling you’re just not quite ready to jump in yet until you understand those variables a little bit more.”

More robust ACO expansion has occurred in Medicare, where one-third of fee-for-service (FFS) beneficiaries are enrolled.   

Medicare Shared Savings Program (MSSP) ACOs increased from 480 in 2017 to 561 for 2018, according to a Centers for Medicare & Medicaid Services (CMS) fact sheet. The number of Medicare FFS enrollees who were included in those ACOs increased by 1.5 million to a total of 10.5 million.

However, there has been a small pullback since the start of 2018, with seven of 58 Next Generation ACOs dropping out of the program.

Other recent controversies have included disagreements over whether ACOs save money for Medicare, which is a key point because that assessment could determine how hard regulators push participating providers to take on downside risk.

Latest ACO Findings

Among the ACO findings that Congress’s leading Medicare advisory group reported this month were that few beneficiaries have opted into ACOs, most of the savings have come from post-acute care, and a large share of physician participants are specialists.

Only “a couple thousand” Medicare beneficiaries have opted to join an ACO since Medicare presented that option at the beginning of 2018, according to the staff of the Medicare Payment Advisory Commission (MedPAC). And most of the beneficiaries who opted to join would have been assigned retroactively through the automatic, claims-based process that ascribes the patients of ACO physicians to the entities, MedPAC staff said at a meeting this month.

To opt in, beneficiaries visit the website and designate their primary care clinician who is in an ACO, staff said.

Having inquired of previous focus groups, MedPAC staff found that Medicare beneficiaries generally are unaware of whether they are in an ACO.

The importance of allowing beneficiaries to opt in could increase in coming years, MedPAC commissioners have said, if the program adds limited ACO networks or premium reductions for ACO enrollees. Already, risk-bearing ACOs have a new option to make $20 incentive payments to enrollees for each primary care service that they receive in the ACO, according to a Kaiser Family Foundation fact sheet.

For providers, the voluntary opt-in feature was expected to allow ACOs to develop a more consistent member base, according to an assessment by Milliman.

Officials at CMS are being cautious because previous efforts to tell Medicare beneficiaries that they had been assigned to an ACO caused widespread concern and confusion, according to MedPAC staff.

“I do think there are a lot of advantages for beneficiaries to be in an ACO overall and individually, but it has to be a lot more clear if we want to really have increased interest in it,” said Rita Redberg, MD, a MedPAC commissioner and professor of clinical medicine at the University of California at San Francisco (UCSF) Medical Center.

Another recent finding by MedPAC was that—contrary to the belief of some—specialists are participating in ACOs. In fact, about half of the providers in the MSSP are specialists, MedPAC staff said.

However, it was not clear that ACOs are deriving the maximum benefit from the inclusion of specialists, according to MedPAC commissioners.

“And I don’t know that specialists are, again, aware of even if they are in or not in an ACO—and they don’t have any particular education on it, and I don’t know that they are sharing in the savings, even if they are in the ACOs,” Redberg said.

She urged the creation of incentives for individual participants as well as for ACO entities.

MedPAC staff also recently identified reductions in costly post-acute care as the primary savings route for most ACOs—echoing earlier research findings.

The finding raised concern among commissioners that hospitals may not be ideal long-term participants in ACOs.

Possible ACO Changes

MedPAC this month discussed a range of changes that members thought should be implemented in the Medicare ACO program.

For instance, Craig Samitt, MD, a MedPAC commissioner and executive vice president and chief clinical officer for Anthem, suggested that Medicare address perceived hospital unwillingness to cut inpatient admissions by barring hospital-sponsored ACOs from the bonus-only model. Upside-only ACOs comprise 82 percent of all Medicare ACOs in 2018, according to CMS.

“Hospital-sponsored ACOs must take downside risk as a way to really advance the model,” Samitt said.

That was one of a range of changes needed to jump-start a stagnating Medicare ACO program, commissioners said.

“We need to do more, and we need to be bolder, because after six years I admittedly have to say that I feel we’ve made very little progress,” Samitt said.

David Grabowski, PhD, a commissioner and professor of healthcare policy at Harvard Medical School, has studied ACO results.

“We all know the ACO model has not been perfect; yet even in the case of one-sided risk, well-designed studies have suggested savings there, and I think the savings there don’t account for any kind of spillover to other patients in those markets,” Grabowski said.

The debate over what changes to ACOs are needed, Grabowski said, stems from competing desires for the models to generate more short-term savings versus establishing a model that achieves long-term success.

“But I also don’t want to set up a model where we know it’s going to show savings for participants, yet nobody wants to join this because it’s just having to get over this huge hurdle—and so how do we strike that balance?” Grabowski said.

Dana Gelb Safran, chief performance measurement and improvement officer and senior vice president for Blue Cross Blue Shield of Massachusetts, has seen how ACOs influence the way providers negotiate rate increases with her employer “because of wanting to have rates that aren’t so high that others won’t refer to them.”

“You only have to have a couple conversations with hospital executive leaders to know that they are conflicted, and they’re very honest about that, at least behind closed doors,” Safran said.

The insurer recently launched a pilot that aims to “fundamentally change” the incentives for hospitals to reduce inpatient care, she said.

Others discussed eliminating a minimum participation threshold in advanced alternative payment models (APMs) that physicians must meet to receive a 5 percent bonus on their total Medicare payments. Instead, physicians working with APMs would get the bonus based on their APM patients. The proposal was seen as gaining traction when it was included in the latest proposed budget from the Trump administration.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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