The truth about managing Medicare ACOs

Medicare Accountable Care Organizations are in full swing and healthcare systems are starting to fully grasp what it takes to manage them.

A recently published article in JAMA Internal Medicine explored the largest and most pressing problem with Medicare ACOs: managing the member population. The authors explored the stability of the member populations, network leakage, and proportion of care provided to ACO beneficiaries relative to other patients.

The results from the JAMA research were unsurprising. Medicare ACO populations are extremely unstable, with one in three patients moving in or out of the ACO year-to-year. Leakage to other networks is also extraordinarily high, with 67% of specialty visits occurring outside of the ACO network. Lastly, the amount of care devoted to ACO beneficiaries is only about 38% of the total care provided at a system. These are not the results anyone wants to see - neither Medicare nor providers.

The implications of the Medicare Shared Saving Program (MSSP) structure are critical. With no incentives for members to stay in-network, organizations are left to corral the patients themselves. The JAMA research clearly shows that network leakage is a problem. But what's more, that leakage number actually increases with acuity, compromising the continuity of care for the highest-risk patients.

Even primary care - the backbone of the ACO - suffers from leakage. One in twelve beneficiaries seeks their primary care outside of the ACO. It doesn't appear that CMS is willing to put any structure in place that has been successful with commercial ACOs to solve the problem, like assigning primary care physicians, instituting financial incentives for patients, or creating narrow networks. With no guardrails in place from CMS to keep patients in-network, the financial and clinical risk of managing complex care is overwhelming.

In the journey toward value-based care, CMS has nudged our nation's largest insurance program toward risk management with the MSSP. Rather than taking a leap toward value-based care, CMS chose small, incremental steps, and preserved the status quo for patients. Its half-hearted attempt at structuring value-based reimbursement has been received with poor results, and healthcare organizations are stuck with a half-baked, costly program.

Healthcare organizations can't wait until regulations change or next generation ACOs are rolled out. They must proactively take on management of their populations where Medicare has failed. They must contain patient leakage, coordinate care, and manage financial risk. The tools to do it already exist. The simplest, most effective solution is to actively manage the referral process within the ACO network. Implementing a referral management tool can be an effective first step in the journey toward truly accountable care.

About author:

As CEO, Scott leads Fibroblast's strategy, business development, sales, and customer success efforts, among other things. Scott is deeply committed to Fibroblast's mission of ensuring that no patient falls through a crack in the healthcare system, and he is passionate about healthcare innovation and reform. Prior to co-founding Fibroblast, Scott was a senior commercial litigation associate with an AmLaw 100 law firm, serving as trial counsel for Fortune 100 companies and national financial service firms in state and federal courts and before the SEC, NYSE, and FINRA. Scott also served as a Managing Director of a premiere Chicago-based legal search and consultancy firm. Scott graduated from Washington University School of Law, after receiving a BA from the University of Illinois. Scott has also studied at the University of Chicago's Booth School of Business.

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