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The Importance of The Shared-Savings ACO Model

By Ron Klar

Certainly no Medicare provision of the Affordable Care Act (ACA) has generated more interest among health care providers, policy analysts, and consultants than the Medicare Shared Savings Program (MSSP) for accountable care organizations (ACOs).  Because there are so many design elements for which the Secretary of Health and Human Services must “determine”, “establish”, and “specify” the details, all potential participants have been anxiously awaiting the proposed rule before deciding how, and if, to proceed.  These details will have important implications for the future of traditional fee-for-service (FFS) Medicare and the program’s acceptance by physicians and beneficiaries.

The MSSP is based on the Physician Group Practice (PGP) Demonstration and incorporates a “shared savings” model (SSM) of potential bonuses for eligible groups of providers that meet annual performance standards of beneficiary quality and per capita expenditures.  Payment for covered services will remain fee-for-service, and all of the fundamental and enduring FFS freedoms of choice, equality, and privacy are to be preserved.  There will be no financial penalties or down-side risks for these groups other than their unreimbursed services and other investments.  The SSM is not yet another version of managed care by at-risk entities for enrolled beneficiaries.

In spite of the clear Congressional intent to include this model, some are now questioning its adequacy to achieve delivery system “transformation” and its possibility for “unearned” bonuses, i.e., groups participate – do nothing – hope for a favorable random outcome.

Therefore, now being considered for the MSSP is the “option to use other payment models”, as authorized but only cryptically referenced, such as “partial capitation”, or “two-sided risk” recently suggested by MedPAC.

The “sentinel” issue should not be which model to promote, but which models and their differentiated design elements.  This would optimize initial participation, ongoing “upward” progression (from one model to the next), and ultimate program impact.

The SSM will allow interested groups that are not willing or able to…. (Read complete article at Health Affairs).

Dr. Klar was recently named Chief, Health Systems Innovation & Performance, by the GW Medical Faculty Associates to lead their implementation of integrated, coordinated, patient-centered, and accountable care initiatives.

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