Tag: Medicare Shared Savings Program

The MSSP Is No Silver Bullet for Healthcare Cost Control

Nov 19, 2018• 16

But ACOs could pave the way for more significant cost-cutting based on competition.

By KEN TERRY

The Medicare Shared Savings Program (MSSP), it was revealed recently, achieved a net savings of $314 million in 2017. Although laudable, this victory represents a rounding error on what Medicare spent in 2017 and is far less than the growth in Medicare spending for that year. It also follows two years of net losses for the MSSP, so it’s clearly way too soon for anyone to claim that the program is a success.

The same is true of accountable care organizations (ACOs). About a third of the 472 ACOs in the MSSP received a total of $780 million in shared savings from the Centers for Medicare and Medicaid Services (CMS) in 2017 out of the program’s gross savings of nearly $1.1 billion. The other MSSP ACOs received nothing, either because they didn’t save money or because their savings were insufficient to qualify them for bonuses. It is not known how many of the 838 ACOs that contracted with CMS and/or commercial insurers in 2016 cut health spending or by how much. What is known is that organizations that take financial risk have a greater incentive to cut costs than those that don’t. Less than one in five MSSP participants are doing so today, but half of all ACOs have at least one contract that includes downside risk.

As ACOS gain more experience and expand into financial risk, it is possible they will have a bigger impact. In fact, the ACOs that received MSSP bonuses in 2017 tended to be those that had participated in the program longer—an indication that experience does make a difference.

However, ACOs on their own will never be the silver bullet that finally kills out-of-control health spending. To begin with, 58 percent of ACOs are led by or include hospitals, which have no real incentive to cut payers’ costs. Even if some hospitals receive a share of savings from the MSSP and/or private insurers, that’s still a drop in the bucket compared to the amount of revenue they can generate by filling beds instead of emptying them. So it’s not surprising that physician-led ACOs are usually more profitable than those helmed by hospitals.

ACO 101: Koka Completely Misses The Mark on Medicare ACOs

May 3, 2016• 9

By LISA BARI

Recently, Anish Koka, MD, a Cardiologist from Pennsylvania, posted his anti-Accountable Care Organization (ACO) manifesto here on The Health Care Blog. [1] Koka argues that ACOs don’t work and are doomed to fail because they were designed by non-practicing physician policymakers and academics in ivory towers. He appears to be basing his judgment on a commercial ACO contract that only pays him $4 per month extra for care coordination and requires that he meet specific quality measures. He is also conflating his experience in a commercial ACO with Medicare ACOs, and interprets the initial results of one Medicare ACO program to mean that all ACOs are a failure. Finally, he relays an anecdote of caring for one of his patients, Mrs. K, a patient with chronic illness who doesn’t want to take her medication.

In his post, Dr. Koka calls out “well-meaning, hard-working folks that own a Harvard Crimson sweater…[whose] intent is to fundamentally change how health care is provided.” As luck would have it, I do own a Harvard Crimson sweater, and I’d like to respond.

The Affordable Care Act (ACA) of 2010 gave the Centers for Medicare & Medicaid Services (CMS) the authority to create ACOs in two forms. One, the Medicare Shared Savings Program (MSSP), is a large program that does exactly what its name says: it allows physicians and care organizations to share savings with CMS based on their previously-expected health care spending. The other was the Pioneer ACO model run by the CMS Innovation Center (CMMI). This five-year experiment was intended to test if physicians and care organizations could bear both upside and downside risk while still delivering high quality care. The Pioneer ACO program has ended as planned, and CMMI has incorporated its findings from the model thus far into the Next Generation ACO model. [2] Any other ACO program is a non-governmental agreement between a private insurer and group of health care providers that is neither designed nor controlled by CMS or any other part of the government.

Dr. Koka’s main point of criticism appears to be with the terms of a commercial, non-Medicare, non government ACO with which he contracts. Commercial ACOs tend to have stricter, less-generous terms for physicians; a 2014 study in the American Journal of Managed Care found that commercial ACO contracts were more likely to include both downside risk and upfront payments. [3] CMS cannot be held responsible for the terms of an ACO contract between Dr. Koka and a private insurer, but I’ll leave that aside for now.

Dr. Koka cites a recent Harvard study on the first year and a half of results from the MSSP as evidence for the failure of ACOs. [4] This study looked at Medicare claims data for two cohorts of practices–one starting mid-year in 2012 and one starting on January 1, 2013, through the end of 2013. In short, the mid-year 2012 cohort delivered a small amount of savings per beneficiary, and the 2013 cohort achieved a negligible amount of savings. Additionally, some quality measures showed improved performance, while others were the same as the control group. I do not interpret these results as a “failure” at all. These are early results from a generous program that is easing physicians and care organizations into accountable care by limiting the amount of risk that they must take on at first. Equivalent or better-quality care was delivered, along with small savings.

Leavitt Partners, a health care consulting firm, has been tracking and reporting on Medicare and commercial ACOs since 2010. In their recent report on the early takeaways from the MSSP results, they highlighted that physician group-led ACOs tended to do a better job than hospital-only ACOs, and that ACOs residing in high-cost markets were more likely to generate shared savings. [5] Based on all of these findings, I cannot agree with Dr. Koka that Medicare ACOs are a failure, and I certainly cannot extrapolate from commercial ACOs to Medicare.

The evidence is widespread and irrefutable that our current payment and delivery system has resulted in the highest health care costs in the world, along with some of the lowest-quality care. [6] We simply cannot continue to pay doctors and hospitals on an unrestricted fee-for-service basis. ACOs are the beginning of a massive shift in how we deliver, pay for, and measure health care in order to address these cost and quality issues.

Dr. Koka also fails to acknowledge a critical point about ACOs: they are generally designed with the Primary Care Physician (PCP) as the central care coordinator versus a specialist. PCPs are best situated to coordinate care for their patients and manage preventive care and population health measures. A more expensive specialist like Dr. Koka should not be the physician responsible for coordinating patient care in an ACO–it makes little sense. One reference point comes from The Accountable Care Guide for Cardiologists from the Toward Accountable Care Consortium. They highlight PCPs and good teamwork as critical central elements in any ACO. [7]

He also does not acknowledge that it takes time to get accountable care and care coordination right. A PCP or primary care organization is not going to have the tools they need or the right contracts in place with specialists and hospitals on day one. The processes and technology for effectively managing an ACO take time. The initial results from the MSSP prove this out.

Let’s say we assume for the sake of argument that Dr. Koka is right; that ACOs don’t work, and they are a colossal waste of time. Even then, his proposed solution is more than a bit ham-handed. There is no agreement among either the American public or the health care system that we should directly ration care. I suggest that we start by making PCPs the gatekeepers to specialists like Dr. Koka rather than asking him to spend many hours coaxing a patient to take her medications. Undoubtedly, this is what his commercial ACO intended. We need to do a better job of delivering the right care at the right time, from the right physician, nurse, or other provider–yes, this is care coordination.

And if all else fails, well, there is one easy, proven way to slow the growth of health care costs: making a blunt cut in reimbursement rates to providers, as we saw in the Budget Control Act of 2011. I am almost certain that Dr. Koka would not welcome another cut like this. [8]

If Dr. Koka would like to avoid this last-ditch option, perhaps it is time to partner with primary care organizations and see how he can help them to be a successful ACO…and allow Mrs. K’s PCP and case manager or health coach to field those Saturday calls.

As avid followers of federal health policy will know, this week CMS released the notice of proposed rulemaking for the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. The MACRA encompasses a massive shift in Medicare physician payment. The bad news for Dr. Koka? Accountable, value-based care is not going away anytime soon. The good news is that the proposed payment and delivery system models include more flexibility for physicians and will better reward them for high quality care.

In my opinion, the best news is that the MACRA provides a clear path for our public health care system to move away from fee-for-service once and for all. I hope that Dr. Koka can reconcile himself with a world where care providers, in partnership with patients, are asked to be more accountable for the high cost of health care. At a minimum, I hope that the difference between commercial and Medicare ACOs is now clear.

Lisa Bari is a Master of Public Health candidate at the Harvard T.H. Chan School of Public Health, and previously worked in health IT. She loves primary care health policy, health care payment reform, interoperability, and health data APIs. She never thought she’d own a Harvard sweatshirt. You can find her on Twitter @lisabari.

1 https://thehealthcareblog.com/blog/2016/04/25/the-aco-delusion/

2 http://www.brookings.edu/~/media/research/files/papers/2015/05/12-aco-paper/impact-of-accountable-careorigins-052015.pdf

3 http://www.ajmc.com/journals/issue/2014/2014-vol20-n12/aco-contracting-with-private-and-public-payers-a-baseline-comparative-analysis

4 http://www.nejm.org/doi/pdf/10.1056/NEJMsa1600142

5 http://leavittpartners.com/wp-content/uploads/2016/04/MSSP_ACOs_takeaways_whitepaper_final.pdf

6 http://www.commonwealthfund.org/publications/press-releases/2015/oct/us-spends-more-on-health-care-than-other-nations

7 http://www.ncmedsoc.org/wp-content/uploads/2014/06/ACO-Guide_Cardiologist_052814_reduced-file.pdf

8 http://www.cbpp.org/research/how-the-across-the-board-cuts-in-the-budget-control-act-will-work

9 http://www.politico.com/tipsheets/politico-pulse/2016/04/exclusive-andy-slavitt-on-macra-214014

Why ACO Savings Aren’t About Location.

Oct 8, 2014• 21

By TRAVIS BROOME

One of the big questions since the inception of the Medicare Shared Savings Program has been whether the model would only work in regions with extremely high baseline costs. Farzad’s state-level analysis of earlier MSSP results suggested that ACOs in higher-cost areas were more likely to receive shared savings. It’s one of the questions that Bob Kocher and Farzad received in the wake of the op-ed on Rio Grande Valley Health Providers last week.

So we decided to dig into the data.

We’re still waiting for CMS to make baseline costs for ACOs – and the local areas they serve – public. But in the meantime, we linked each ACO to a Hospital Referral Region using the main ACO address provided by CMS – and took a look at the region’s per capita Medicare costs as a predictor of ACO success.

How Community Health Centers are Taking on Accountable Care for the Most Vulnerable

May 12, 2014• 4

By Farzad Mostashari, MD & James Colbert, MD

Like many participants in the Medicare Shared Savings ACO Program (MSSP), Family Health ACO is sailing in uncharted waters.

All ACOs are facing significant challenges in better understanding patient utilization patterns, identifying high-risk patients, and implementing care coordination strategies.

Even more unique is that Family Health ACO (“Family Health”) is composed entirely of federally qualified health centers (FQHCs). FQHCs are community based organizations that provide critical primary and preventive care for millions of underserved and uninsured Americans, regardless of their ability to pay.

Nationwide, there are over 1200 FQHCs serving the health care needs of the working poor, the unemployed, the undocumented, and anyone else in need of primary medical care. Family Health provides care to over 200,000 patients and spans nine counties in New York State; from the bustling streets of New York City to the rural landscapes of the Hudson Valley.

Partners in the Family Health ACO include Open Door Family Medical Centers (“Open Door”), The Institute for Family Health (“The Institute”), and Hudson River Health Care (HRHCare).

Collectively the ACO includes 120 physicians, 60 advanced practice nurses and physician assistants, and nearly 100 dental providers.

These organizations have a strong history of collaboration, including their first venture in 2008 to form the Hudson Information Technology for Community Health (HITCH). HITCH enabled the organizations to pool resources and work collaboratively on cancer screening and diabetes management outreach programs.

The ACO partnership is helping to further strengthen the ties between these three community-based health care organizations and their communities.

What a Physician-Led ACO Can Teach Us about Getting It Right

Apr 14, 2014• 8

By Farzad Mostashari, MD & Anna Marcus

Several of the provisions included within the Affordable Care Act in 2011 designate Accountable Care Organizations (ACOs) as formal, contractual entities.

However, in the real world ACOs come in a variety of shapes and sizes.

When compared to larger, hospital-sponsored ACOs, rural and small physician-led ACOs face a tough challenge, because despite limited resources they need to come up with substantial upfront capital and infrastructure investment to establish a strong ACO foundation.

To help ease this burden, 35 ACOs were selected to participate in the Advanced Payment Model ACO demonstration through a grant program from the Center for Medicare and Medicaid Innovation (CMMI). The grants provided a portion of upfront capital to determine whether or not this financial assistance would help ease the startup burden for smaller ACOs, and increase their success rate.

One of those 35 organizations includes the central Florida-based Physicians Collaborative Trust ACO, LLC (PCT-ACO). They are participants in the January 2013 Medicare Shared Savings Program (MSSP) ACO cohort, along with 106 other ACOs.

Larry Jones, PCT-ACO’s CEO, describes his personal mission as an effort to “preserve and protect the independent practice of medicine.” For over 25 years he has been advocating for physicians through their efforts to organize, negotiate with health plans, and other challenges.

The ACO Hypothesis: What We’re Learning

Mar 12, 2014• 31

By Farzad Mostashari, MD & Ross White

Last month, the Center for Medicare and Medicaid Services (CMS) reported first-year results from the Medicare Shared Saving Accountable Care Organization Program (MSSP).

As noted in a previous post, shifting to an accountable care model is a long-term, multi-year transition that requires major overhauls to care delivery processes, technology systems, operations, and governance, as well as coordinating efforts with new partners and payers.

Participants in the MSSP program are also taking much more responsibility and risk when it comes to the effectiveness and quality of care delivered.

Given these complexities, it is no surprise that MSSP’s first year results (released January 30, 2014) were mixed. The good news? Of the 114 ACOs in the program, 54 of the ACOs saved money and 29 saved enough money to receive bonus payments.

The 54 ACOs that saved money produced shared net savings of $126 million, while Medicare will see $128 million in total trust fund savings.

At the time, CMS did not provide additional information about the ACOs with savings versus those without.

While a more complete understanding of their characteristics and actions will be necessary to understand what drives ACO success, the recent disclosure of the 29 ACOs that received bonus payments allows us to offer some preliminary interpretations.

Measuring What Matters for ACOs

Feb 4, 2014• 9

By Fisher, Schpero & Corrigan

More than 55 percent of the U.S. population now lives in a local area with an accountable care organization (ACO), in which a group of providers is held accountable by a payer for the total cost and quality of care for a defined set of patients. The spread of ACOs, however, by no means ensures their success.

Significant questions remain about whether the goals of the model—better care at lower costs—will be achieved.

There are some signs that the ACO model—by rewarding provider organizations for implementing high quality mechanisms for care delivery that lower overall costs—is driving innovation in the marketplace. For example, the Montefiore ACO in New York City is using special scales in the homes of patients with congestive heart failure to monitor for changes in weight that could indicate trouble.

Walgreens has formed three ACOs and is using its retail pharmacies as low-cost care centers. In addition, the Beth Israel Deaconess Care Organization created a high-touch care management system in which nurse practitioners visit the ACO’s sickest patients at home to reduce the number of hospital readmissions.

Yet, there are also challenges inherent in the adoption and implementation of the ACO model. There have been several wide-ranging proposals on how to enhance accountable care, especially in Medicare, but we believe that developing policies to standardize measurement is an important first step.

First, we need to promote adoption of a core set of effective measures across payers. Current measures, such as screening for high blood pressure, are limited in scope and fail to incorporate important dimensions, including health outcomes meaningful to patients and the total cost of care for those within the ACO. Proposals for more advanced measures have been developed but not yet adopted, in part because of provider concerns about being held accountable for aspects of performance they do not fully control.

These issues could be addressed by operationalizing the concept of “shared accountability” through patient engagement and partnerships, as with local, multistakeholder community health coalitions, and embracing a core set of more challenging and meaningful metrics, such as functional health and total costs per capita.

The Eight-Year Journey to Accountable Care

Nov 6, 2012• 1

By Justin Barnes

Now that the healthcare industry can work with clarity on care coordination strategies and programs, a new expansion of ACO models, trends in patient behavior and the companion issue of provider scope of practice have quickly emerged as critically-relevant spotlights. Historical perspective helps.

Simply put, even with the political tumult this fall, there is strong bipartisan support for aligning payment and care delivery models with improving quality to create a smarter and sustainable healthcare system, backed by historical precedent.

For me and my colleagues in the trenches of pursuing fiscally sound care delivery nearly a decade ago, it is well remembered that the origins of accountable care reside within a 2004 HHS document entitled “The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care.” This “Framework for Strategic Action” (as it is also known) was delivered to then-HHS Secretary and GOP-appointee Tommy Thompson. And it was delivered by the nation’s first National Coordinator for Health Information Technology, Dr. David Brailer.

The document’s goals of introducing health IT solutions to clinical practices, electronically connecting clinicians, using “information tools” to personalize care and advance population health reporting followed an executive order calling for widespread adoption of interoperable EHRs within 10 years.

Health Plan Case Studies: A New Florida Blue

Oct 8, 2012• 1

By Kent Bottles, MD

One of the perks of giving keynotes all over the country is being able to hear what other health care leaders are saying without having to pay the conference fees. One of my major keynote themes is that everyone (patients, doctors, hospitals, employers, and health plans) will have to change in order to thrive during the current health care delivery system transformation.

Recently in Delray Beach, I stayed after my keynote to hear Florida Blue CEO Patrick Geraghty describe his first year of trying to change the Blue Cross/Blue Shield franchise to respond to health care reform. I have written elsewhere about the health plan response to the changing environment, but Geraghty’s speech highlighted how urgent and how difficult change can be when an industry business model is disrupted by federal legislation and market forces.

Geraghty has led the Blues effort in Florida to update their name, mission, vision, and values. Focus groups revealed that the new name Florida Blue was easier to say and communicated a less corporate, more friendly image than the old name Blue Cross Blue Shield which brought to mind adjectives such as corporate, distant, and expensive.

A four paragraph mission statement was replaced by a single sentence: “To help people and communities achieve better health.” The vision statement was rewritten to now describe the company as “a leading innovator enabling healthy communities.” The five corporate values now include the familiar “respect,” “integrity,” and “excellence,” and the more unusual “courage” and “imagination.”

What I found most intriguing and revealing was how these new efforts are being translated into concrete tactics such as opening retail centers and partnering with Disney on a new innovation institute.

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