A Closer Look At Iowa Health's ACOs: 5 Ways Medicare, Commercial Agreements Differ

Both commercial payors and CMS are actively seeking ways to cut the cost of healthcare, apparent in the fast rise of accountable care organizations. It's a trending topic of today's healthcare industry, and many hospitals and health systems are gravitating to ACO models in an effort to cut costs and improve quality of care.

Given accountable care's rapid accent as both a Medicare initiative and a series of unique ventures among private payors and providers, it's important perhaps to distinguish Medicare ACOs from commercial ones. The two are similar in theory but different in practice.

Iowa Health System's ACOs at a glance

Des Moines-based Iowa Health System has had experience in CMS' Pioneer ACO program; one of its affiliates, Trinity Health Systems in Fort Dodge, Iowa, participates in one of the 32 original CMS Pioneer ACOs.  Additionally, Iowa Health System has applied to become a part of the Medicare Shared Savings Program. When it created a commercial ACO with health insurer Wellmark Blue Cross Blue Shield, Iowa Health joined a select group of healthcare systems that can comment on establishing and operating commercial ACOs and working with CMS to share savings.

CFO of Iowa Health System Kevin Vermeer shares several key distinctions between the commercial ACO venture with health insurer Wellmark and Medicare ACOs.

  • Attribution model — The Iowa Health System-Wellmark ACO agreement attributes members to primary care only. The Medicare ACO agreement is potentially more expansive and could attribute members to specialists that bill certain primary care codes in their office, such as cardiologists.
  • Quality indicators — Medicare has 33 prescribed quality indicators, whereas the Wellmark ACO has six "domains around quality," with several indicators in each domain. Medicare and the Iowa Health-Wellmark ACO have similar — but not identical — quality measures to gauge success.
  • Payment — Both Wellmark and Medicare have an underlying fee-for-service structure, but the Wellmark contract includes a provider quality incentive in addition to the shared savings opportunity. Further, there is a quality "trigger" in the Wellmark agreement that says the ACO will not receive shared savings if quality scores decline over time. Medicare uses quality scores as a factor in the amount of shared savings percentages an organization is eligible for but not as a "trigger".
  • Governance — Medicare ACOs have many more governance and administrative components attached to them that the Wellmark ACO does not.
  • Adding partners — Medicare ACOs allow participants to be added to the organization at any time; Wellmark allows Iowa Health to add new regions and/or providers on an annual basis.

Challenges implementing a Medicare ACO

Mr. Vermeer says the hardest part about setting up a Medicare ACO is complying with CMS' rules. "The program is prescriptive in many areas, and staying on top of the rules and adhering to the requirements of the program created challenges at times while getting prepared to participate in the program," he says. What gave Iowa Health a leg up from others applying for the Medicare Shared Savings Program was working with Trinity’s Pioneer ACO in Fort Dodge. "Having experience with the Pioneer ACO in Fort Dodge, Iowa, has helped us considerably in moving forward with the application to participate in [the MSSP] in six other regions," Mr. Vermeer says.

Challenges implementing a commercial ACO

Participating in an ACO with the private payor Wellmark meant Iowa Health needed to build a collaborative relationship based on trust and a common goal of providing better care while reducing costs. "The two organizations have had a historical provider-payor relationship over the years," Mr. Vermeer says. "This agreement forms a new relationship and one that needs to be very collaborative in driving improvements that will benefit our communities." The historical relationship makes the challenge that come with building trust and sharing a common vision surmountable..

Another challenge with making the Wellmark-Iowa Health ACO work is connecting data and getting it reported in a manner that can drive results.

Moving forward with both ACOs
Both the Wellmark and Medicare ACOs will require sufficient, reliable and timely data in order for providers to drive results, Mr. Vermeer says. Both ACOs will "create unique challenges in driving clinical improvements through enhanced care coordination models with very different populations who will have different opportunities and getting enough resources supporting our physicians in driving improvements in very diverse and distinct populations will be a challenge," he says.

However, Mr. Vermeer believes that many of the challenges the Medicare and Wellmark ACOs face will ultimately be similar in nature.

"Participation in both types of ACOs will create energy around breaking down historical care delivery silos, resulting in better care for all of our patients," Mr. Vermeer says.

And that's the ultimate goal of any ACO.

More Articles on ACOs:

Patient-Centeredness Crucial to ACO Success
Turning Today's PHO Into Tomorrow's ACO
7 Recently Formed ACOs

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