Medicare ACOs in the Trenches: How to Survive in Healthcare’s Changing World (Part 1)

Oct. 4, 2016
In Part one of a two-part series, Healthcare Informatics takes a look at certain Medicare ACOs that are thriving in a care delivery space that has proved difficult for many.

When the Centers for Medicare & Medicaid Services (CMS) released 2015 financial and quality performance results for accountable care organizations (ACOs) in two federal programs late last month, the data mostly revealed varying degrees of success.

Indeed, a Healthcare Informatics visual analysis of how organizations performed in the two models—the Medicare Shared Savings Program (MSSP) and the Pioneer ACO program—found that financially, many ACOs (69 percent) are struggling to generate shared savings for Medicare and their organization, while a significant amount (48 percent) are finding it difficult to produce any savings at all. On the contrary, however, there were positives to take out of the data. For one, ACOs with more experience tend to perform better over time. Further, ACOs in both programs continued to showed improvements in their quality scores.

There are now more than 400 federal ACOs across the two models, and the number of Medicare beneficiaries served by ACOs continues to grow, according to CMS officials. They get judged on their performance, as well as their improvement, on an array of metrics that assess the care they deliver. Those metrics include how highly patients rated their doctor, how well clinicians communicated, whether patients are screened for high blood pressure, and their use of electronic health records (EHRs).

In sum, while many ACOs are finding it tough to deliver results, others have been able to succeed. In the Pioneer model, which is now down to 12 participating organizations after starting with 32 in 2012, Newton, Mass.-based Atrius Health is one patient care system that been able to hold its own in a program that has seen two-thirds of its members leave.  

Atrius Health, whose participating Pioneer ACO clinicians serve more than 25,000 Medicare beneficiaries in the central and eastern parts of the state, achieved a 95 percent quality score from CMS and saved Medicare $6.8 million compared to its target, returning $4.4 million in savings to the organization last year. It was only one of six Pioneer ACOs to generate shared savings in 2015. And, this was the fourth year in a row that Atrius Health has seen improved financial performance while in the Pioneer model.

Regarding quality, CMS chooses 33 quality measures to represent patient/caregiver experience, care coordination, and patient safety, preventive health, and risk for patients with diabetes, hypertension, ischemic vascular disease, and heart failure and/or coronary artery disease. On 30 of the 33 measures, Atrius Health scored above the mean, while performing over the 90th percentile benchmark on several measures across all care domains examined. For both financial and quality results, Atrius Health officials note that 2015 was the best year for the ACO, which was one of the original 32 Pioneer program members.

Going “All-In”

According to Emily Brower, vice president of population health at Atrius Health, the organization’s ACO story has been one of focus, quality and partnership. One of the keys, Brower notes, was bringing traditional Medicare fee-for-service patients who were not part of any value-based payment model into the existing risk-based programs that Atrius Health was already partaking in. After all, the health system has been involved for years in working with its health plan partners on moving as much of its business into value-based payment models as possible. “Considering the place we were coming from, a lot of the reason our performance has been sustained is that part of what we do is not new work for us,” says Brower.

Emily Brower

Indeed, for many organizations, their participation in a Medicare ACO is an early or initial step into value. For them, it will take years to build year-over-year savings, says Brower. “We have seen this in the Medicare ACO results that have been published so far over the four years,” she says. “Earlier beginners have gotten better results. There are no shortcuts; this is hard work that will take years of investment. Healthcare is going through a huge shift as an industry, so the idea that you would expect to get nationwide achievement at some very high level would be really unusual,” she says, responding to ACO naysayers. Even in the first two years that Atrius Health was in the Pioneer model, its results were up-and-down, and wasn’t able to exceed its minimum savings rate, despite coming in with a “really strong foundation in value-based care delivery,” Brower notes.

What’s more, Brower says that getting most of its contracts in value-based models, compared to only some, makes it easier to embrace a care delivery process centered around quality. “It’s not something we are doing a little of; we’re all in,” she says. “It is so hard to do business in two very different streams for how you’re delivering the service and how the service is paid for. And that goes for any business. A lot of it is about embracing that model across payers, as you get more bang for your buck.”

Brower refers to Atrius Health as an “independent, physician practice, primary care foundation delivery system,” meaning that it needs to be a strong partner in its market, with patients, hospitals, home health agencies, and skilled nursing facilities. “We have to build a lot of clinical collaboration and partnerships, and health IT feeds, so we need a lot of support and infrastructure in order to coordinate care across the continuum for our patients. We think one of our core strategies and competencies is to be a strong partner in the community, but that takes a lot of work. We can’t make decisions for those other entities, of course, since they are not us, so we have to engage them around clinical delivery and improving clinical outcomes for populations,” Brower explains.

Indeed, part of whether or not an ACO earns savings is what its threshold is for savings that it has to meet. In the Medicare Shared Savings Program, that threshold can be fairly high, while in the Pioneer program, it can be lower if the delivery system chooses that option—an option unavailable in the MSSP model. As such, Atrius Health’s cost of care is now the lowest among Massachusetts Pioneer ACOs.

The organization’s strong historical performance is due in large part to decreasing unnecessary hospital admissions and helping people recover safely at home, its officials attest. “We came into the Pioneer ACO model with a very low historic cost, as most of our business is in value-based payment models even before we started Pioneer. So that meant that it took us a few years to really drive even more value out of those healthcare dollars,” Brower says. She adds how this was a particular challenge for Atrius Health to be a low-cost provider in a relatively high-cost market. “We were already doing a lot of that work, such as delivering care in the right place, partnering with our patients to help them recover sooner, and working on screening for risk, so we were working extra hard to deliver savings above and beyond the good performance we had coming into the model,” she says.

In the first year of the program, 2012, knowing the Pioneer model would be hard, Atrius Health came in with a low historical cost, and set the threshold at a higher rate, but has since come down each year, now with a minimum savings threshold of 1 percent, the lowest it could be, Brower says. “Other organizations make different choices, including an upside only model. So if you’re less risk tolerant, you can take on less risk, with also less reward there. It’s a business decision,” she says. “In all those numbers that Medicare publishes, I focus less on who has exceeded the threshold, because that’s up to the specific organization, but instead I look at if the model is generating savings for Medicare and for taxpayers, and are we improving the value of the healthcare dollar? If so, that’s a win.”

To this end, Brower doesn’t make much of the criticism when people point to all of the organizations that didn’t meet their savings threshold, as well as those that left the Pioneer program. She sees that many of the “dropouts” have moved into other ACO models, such as the Shared Savings Program or the Next Generation program, which kicked off in January.  “Within the models, there is a broad spectrum in which an organization can choose where it feels comfortable in terms of the level of risk it wants to take on,” she says. The different models have slightly different ways they calculate the benchmarks or budgets, she notes, adding that the Pioneer program offers the flexibility to change those each year, and move year after year among models. “So that is why you have seen a lot of movement among Pioneer ACOs, since organizations can choose what works for them each year. I think that gets lost when people talk about [them].”

With that said, Brower feels strongly that these ACO models will likely qualify going forward for advanced alternative payment models (APMs) under the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA), meaning this is where health systems will get the most value from in the future. “They are likely to line up more with what commercial payers are offering in the market, and that has sort of happened already. The market has changed, and things are moving in this direction,” she says.

Brower predicts that there will be more options and clear choices about how much risk and reward organizations take on, and who they want in these models. “You might see additional flexibility, but it will be in some sort of a value-based payment model. I just don’t see traditional fee-for-service as the place people want to be. That will be the default if you can’t figure out how to do something different.”

Part 2 of this series on Medicare ACOs will be published later this week

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