The ‘NexGen ACO': CMS Speaks [again]

By Gregg A. Masters, MPH

At one level you have perhaps the most risk savvy and successful operators in the Medicare Advantage space aka ‘CAPG‘ (the California Association of Physician Groups) closely tethered to it’s less geographically constrained though California domiciled partner IHA as in ‘Integrated Healthcare Association’ explicitly advocating for the preservation of the Medicare Advantage program (MA) aka ‘Part C‘ even though the pre-ACA historical cost to the Medicare Trust fund ‘overfunded’ the program by 114% (estimated in 2014 at 106%) vs. historical FFS program payouts. CAPG’s value prop statement is in part reflected below:

Medicare Advantage is a critical element in the nation’s movement from volume to value in healthcare. With its emphasis on risk-based contracting and clinically integrated care, Medicare Advantage is paving the way for the advancement of coordinated care in every other healthcare program. Medicare Advantage has motivated the deployment of electronic medical records, the expansion of robust quality measurement and reporting, and the movement to team based care, all of which have resulted in better care for seniors. In addition to improving care and quality of life for seniors, this risk-based coordinated care model has the ability to rein in Medicare spending, unlike fee-for-service and its volume-driven incentives.

ACO Next Generation Model

Whereas, under the new if not ‘Deputy’ leadership since the departure of Marilyn Tavenner, former CMS Administrator, Patrick Conway, MD, recently announced the launch of a ‘new and improved’ ACO tagged the next generation ACO – which at some level may be virtually indistinguishable from it’s more mature MA program.

So the question remains, where is this program going and what if any difference will there be between Medicare Advantage and ‘Next Generation of ACOs?’

Quoting from CMS, the initiative details are:

The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. It will allow these provider groups to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP). The goal of the Model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.

Included in the Next Generation ACO Model are strong patient protections to ensure that patients have access to and receive high-quality care. Like other Medicare ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. This is in accordance with the Department of Health and Human Services’ “Better, Smarter, Healthier” approach to improving our nation’s health care and setting clear, measurable goals and a timeline to move the Medicare program — and the health care system at large — toward paying providers based on the quality rather than the quantity of care they provide to patients. In addition, CMS will publicly report the performance of the Next Generation Pioneer ACOs on quality metrics, including patient experience ratings, on its website.

CMS expects approximately 15 to 20 ACOs to participate in the Next Generation ACO Model with representation from a variety of provider organization types and geographic regions. The Model will consist of three initial performance years and two optional one-year extensions. Specific eligibility criteria are outlined in the Request for Applications (PDF).

Clearly this may be an inflection point, or more aptly stated, a convergence of what has been a parallel track (excluding the Pioneer ACO program) between ACOs in the Medicare Shared Savings Program (aka ‘HMO-lite’) and their more risk savvy competitors in the MA space.

For a 2014 analysis of the costs of the Medicare Advantage vs. traditional Medicare program see: ‘Medicare Advantage Program in 2014‘.

As tweeted to me earlier this week by James Hansen, VP of the ACO and MA operator company Lumeris:

‘Next generation ACO, finally a starter or more kissing your cousin?’

No doubt CMS is being responsive to provider (contractor) market input from both the Pioneer program exits as well as the overwhelming election by ACOs to NOT assume downside risk under the current terms of the MSSP.

Like it or not, [ACO/HMO] convergence is coming. Clinical and financial integration including partial or full risk assumption are the business models that will succeed in the pursuit of sustainable healthcare financing and delivery business models. I view this latest CMS announcement as confirmation of this macro directional trend.

 

 

 

 

 

 

Value Based Care: what we can learn from those who succeeded (and failed) in Year 1 of the Medicare Shared Savings Program?

By Randall Williams, MD*

“The definition of insanity is doing the same thing over and over again and expecting different results.” — Albert Einstein

einsteinIf you want to lead your organization to success with value based care, I’d like to help you avoid the mistake of committing organizational insanity. As I’ve written before, all value based contracting will require a different and diligent focus on reducing cost. In order to win, you need a model that will help you do that. But first, there’s a lot to learn from those who succeeded (and failed) in the first year results of the Medicare Shared Savings Program (“MSSP”).

The first year impact of MSSP has received lots of attention in the media. To sum it up:

Only ¼ of all MSSP organizations achieved ANY financial success, as measured by receiving shared savings.

cms_logoThat statistic is concerning and has caused hand-wringing inside and outside the Beltway, but it is not surprising. Why? It’s simple really — most ACOs are still working on basic organizational issues like:

  • integrating their doctors
  • getting CMS claims data into a format that can be analyzed
  • documenting and reporting quality performance metrics

While that work is necessary, it is not at all sufficient. It won’t generate the cost savings required to get to the shared savings bonus opportunity. MSSP organizations, depending a bit on their size, must reduce the total beneficiary cost (Medicare Part A and Part B) by at least 2.5 – 3.5%. Yet few are focusing on doing things differently when it comes to managing their population’s utilization and costs.

Imagine the following scenario:

The average beneficiary in your ACO spends $9,000 per year.

You have 10,000 beneficiaries.

Your savings threshold is 2.8%.

In order to get into the bonus category, you will need to avoid at least $2.5 million a year in medical expenditures. That doesn’t just happen on its own.

Sounds like tough work, you say. Maybe we can’t get there, you say. But some of your peers actually accomplished that in their first year.

Were they simply lucky, perhaps having the “good” fortune of a high starting point to work from? Or might their success be a result of the Medicare reconciliation “Black Box”? Evidence and analysis elsewhere suggests these aren’t the explanations. So what is?

Medicare’s own analysis of the Year One winners (those who got bonuses) gives some important insights to the real answer. From that data, we can see that:

  • Winners saved about 6% per beneficiary overall
  • Winners reduced hospitalizations by 52%, ER visits by 41%, and inpatient costs by 69%
  • Winners achieved a 40% decrease in admissions for heart failure patients and a 25% decrease in admissions for COPD patients
  • Winners dropped hospital readmission rates by 26%

What does this mean to organizational leaders looking to achieve savings bonuses?

  • Get your organization focused on avoidable admissions and readmissions to the hospital
  • Eliminate enough admissions to drive down overall costs by >5%
  • Establish a monthly goal of averted admissions that you can measure and manage over the course of each performance year
  • And whatever else you decide to do, don’t simply assume that doing what you’ve always done will get you different results!

For other useful analysis of MSSP results, I recommend reading insights from the Brookings InstituteMedicare ACOs Continue to Improve Quality, Some Reducing Costs‘. Please feel free to share your thoughts about winning with value based care in the comment section.

***********************

Dr. Williams is the founding Chief Executive Officer of Pharos Innovations. He is responsible for setting the vision and overseeing the execution of Pharos’ mission to transform healthcare through patient engagement in self-care. He has 16 years of executive experience developing chronic care monitoring programs.

The above is a guest post originally published here.

Meet Redwood Community Care Coalition: A Health Center Nested ACO

By Gregg A. Masters, MPH

Wrapped in the ‘population health’ angle but clearly a unique play in the ACO space – at least from the participation point of view of Federally Qualified Health Centers (FQHC), former CEO Steve Ramsland (a 10% allocated FTE) addresses the audience about their market, approach to ACOs and the deployed healthIT spine (they use cClinical Works CCMR).

More information on Redwood Community Health is available here and via 2012 Annual Report. The ACO is an interesting construction of member entities up to and including ‘a doc in private practice’.Redwood Community Care Coalition ACO HealthIT

In the article noticing the Ramsland resignation – which is interesting on it’s face in terms of back-story if any, the service area for the FQHC includes:

…health centers in Marin, Sonoma, Napa and Yolo counties, including some of the largest FQHCs such as Petaluma Health Center, Marin Community Clinics, Clinic Ole in Napa and West County Health Centers in Sonoma County, among others.

The Redwood Community Care Coalition ACO is NOT aligned with a hospital partner, it is solely sponsored by its founding members.

The 5th Annual ACO Summit

By Gregg A. Masters, MPH

Can’t make the annual gathering in DC? Why not follow the conference via Twitter?

ACO Summit 5th Annual MeetingIn years past, I registered the ACO Summit as a conference with the healthcare hashtags registrar @Symplur.

While the dashboard has not been updated with current information (the program description dates back to 2012), the conference hashtag remains #ACOsummit.

So check out the twitter stream, pull real time analytics including ‘reach’, impressions’ and tweet frequency here.

 

Universal American: A Sign of Things to Come?

By Gregg A. Masters, MPH

Per the recent investor call [to listen via archive replay click (and register) here] the theme was perhaps best set via the following comment:

We just want to stop the bleeding… Robert Waegelein

UAM P&L Q1 2014When CMS issued the final rule for ACOs one of the first enterprising companies out of the gate to proactively roll-out an ‘ACO template’ of sorts, that was market specific yet spawned by a ‘mega MSO corporate parent’ was Universal American (UAM).

Branded via the ‘healthy collaboration’ moniker, the company was a first mover into the ‘ACO space’ intent upon building multiple regional if not an assembled national footprint.

As an experienced Medicare Advantage operator, UAM’s approach was to leverage their network and risk management core competencies and structure ACO ‘win/win’ gain sharing scenarios with their network partners – principally physicians who were not risk averse with perhaps some prior or current involvement in the Medicare Advantage program. Afterall, ACOs are merely ‘MA lite’, no?

The UAM collaboration philosophy was detailed in a prior post titled: ‘Universal American: A Healthy Collaboration?’

Who can argue with aligning incentives and sharing the savings? This is a perfect fit for the foundational principles enshrined in the Affordable Care Act and articulated in Medicare Shared Savings Program. It should work, no?

With some baseline experience UAM and other ACOs are beginning to see what works, what doesn’t and perhaps even discerning the reasons why.

Suffice it to say, the clear lessons UAM is drawing from these early ACO results (at least as reported in this conference call) include the need for scale (member concentration) in the market. A couple of hundred Medicare beneficiaries distributed over a loosely tethered provider network neither gets attention nor provides the pricing leverage the company needs to manage to a margin.

Below is a snapshot of UAM’s operations and financial position:

UAM Operating Profile 2014

 

For additional context and speculation as to the meaning of UAM’s market exits on the continued growth and expansion of ACOs, see: ‘Reform Update: Insurer’s retreat from ACO investment raises questions about Medicare’s program.’

Quoting from the piece:

‘Universal American, a publicly traded insurance company that has invested heavily to become the largest operator of Medicare accountable care organizations, will no longer finance existing ACOs where its executives see little hope of financial return. The decision raises UAM Operating Profile 2014questions about Medicare’s ability to expand the program as the agency continues to seek new participants and hold on to those already experimenting with accountable care.

“Where we’re seeing it’s not working, we’re going to stop investing,” said Robert Waegelein, chief financial officer for Universal American, which contracts with local physicians across 13 states to operate 34 ACOs in the Medicare Shared Savings Program. That’s about one out of 10 ACOs launched under the program since 2012. “We just want to stop the bleeding,” he said.

We are at best in the bottom half of the first inning. There is a long way to go on this journey towards sustainability. So before we get too carried away and perhaps even write ‘the ACO obituary’, I say ‘more will be revealed’ –  so stay tuned!

 

My Chat with Nicole Bradberry

This Week in Accountable Care Meet Nicole BradberryOn the anniversary of the launch of the Florida Association of ACOs and the vital role of MSOs in supporting the operations of disruptive business models chasing the sustainable healthcare ecosystem I had a round two conversation with Nicole Bradberry, President and Chief Operating Officer of Orange Health Solutions and CEO of the Florida Association of ACOs.

Listen as we learn more about the accountable care market one year later, including insights on the investment by Great Point Partners in Orange Health Solutions enabling the acquisition of MZI Healthcare including it’s suite of products built on the EZCAP chassis.

 

 

The Medicare Shared Savings Program: Class of 2015

By Gregg A. Masters, MPH

The clock is ticking and the CMS continues its community outreach via their series of National Provider Calls on the application process for ACOs interested in submitting for the Medicare Shared Savings Program.Medicare Shared Savings Program

The deadline for the class of 2015 is approaching with the next call scheduled for Tuesday, April 22nd 2014 from 1;30 – 3PM Eastern.

You can register for this call here.

Space is limited and demand for these calls often exceed available slots, so get your registration in early.

Meanwhile, the description of the program is as follows:

During this MLN Connects™ National Provider Call, CMS subject matter experts cover helpful tips on completing a successful application, including information on how to submit an acceptable ACO Participant List, Sample ACO Participant Agreement, Executed ACO Participant Agreements, and Governing Body Template for the Medicare Shared Savings Program application. A question and answer session follow the presentation.

The Shared Savings Program Application web page has important information, dates, and materials on the application process. Call participants are encouraged to review the application and other materials found on this web page prior to the call.

Target Audience

Potential 2015 ACO Applicants

Presentation

The presentation for this call will be posted at least one day in advance of the call on the MLN Connects™ National Provider Calls and Events web page. Select the call date and scroll to the “Call Materials” section to locate the slide presentation. A link to the audio recording and written transcript of this call will be posted under the “Calls Materials” section in approximately 2 weeks following the call.

Registration will close at 12:00 p.m. ET on the day of the call or when available space has been filled.