Overhaul of Accountable Care Organization Rules: Implementing in a New Sysytem
ACOs improve with age: In 2018, 29.8% that were 1-4 years old received shared savings as compared to 55% of ACOs 5-7 years old.
Summary
The Medicare Shared Savings Program has undergone significant design changes starting in 2020.
Eventually all ACOs will be in a shared savings and shared losses relationship with Medicare
Success in the new payment model is possible, but requires getting oriented to a vastly different approach to managing clinical services.
Background
The new Medicare (CMS) Shared Savings Program known as the “Pathway to Success” began January 1, 2020. The goal is to transition all ACOs to a value and outcomes based payment model where savings and losses are shared between CMS and the ACO. A contributing factor to this change may be the rise in spending by CMS under the current ACO plan. It is estimated the Pathway to Success plan will generate $2.24 billion in savings over 10 years, but 109 of the current 561 ACOs will exit the program.
Original Model
The original goal of ACOs was to hold providers accountable for total cost and quality of outcomes within a patient population. Once certain quality indicator benchmarks were attained, the ACO receives a share of any savings generated.
There were 4 tracks to this model. Track 1, also known as the one-sided track, shared savings but was not required to share any losses. Tracks 2 & 3, known as two-sided tracks, shared a larger portion of the savings but also shared in the losses if spending exceeded the benchmarks. A limited available Track 1+ began in 2018 with elements of both Track 1 and 3. ACOs in Track 1+ shared in the savings but also had a downside risk which was more limited than Tracks 2 or 3 (Table 1). As of 2018, the majority of ACOs were of the one-sided type with 66% below the benchmarks.
Review
REVIEW OF PATHWAY TO SUCCESS MODEL (Table 2)
The new model will condense the 4 existing tracks to 2 tracks:
Basic Track with 5 levels (A, B, C, D, E)
Enhanced Track
The typical agreement period will be for 5 years with a phase-in of increasing risk exposure.
Basic Track Levels A & B are one-sided models for the first 2 years
Basic Track Levels C, D, E are two-sided models starting in year 3 and have progressively higher risk sharing levels through year 5.
Enhanced Track is equivalent to Original Track 3 with additional tools and flexibility.
Ultimately all ACOs are expected to transition to the Enhanced track
The extensive new rules preclude a full review, the reader is referred to the full 607 page revised ACO rules. This is intended to be a brief summary.
CMS also has criteria to determine if an ACO is (Table 3):
Low Revenue (usually a physician led ACO or rural hospital)
High revenue (usually a hospital led ACO)
Experienced or Inexperienced with Medicare health performance based risk initiatives
Currently, low revenue ACOs have a higher shared savings rate (49%, n=235) than higher revenue ACOs (28%, n=313)
Other Considerations:
Beginning in January 2020, CMS has added additional flexibility into their rules. Two are outlined here.
Telehealth
All Basic two-sided tracks and the Enhanced track with eligible physician and practitioners will receive payments for telehealth services even if the geographical limitations are not met, including when the beneficiaries home is the originating site.
SNF 3-Day Rule Wavier
All ACOs at risk within the Basic track or in the Enhanced track are eligible to apply for a waiver to the requirement of a 3-day inpatient hospital stay prior to transfer to a Medicare covered nursing home.
ACO CHALLENGES & STRATEGIES
To be successful, ACOs must think and act differently. The most common challenge ACOs must overcome is the design and implementation of changes in the care delivery process. This is not an easy task.
A 2018 survey of 201 ACOs report the top strategies used by systems to improve efficiency and reducing costs (Figure 1).
Reduce avoidable emergency risks
Active management of high need/high cost patients
Prevent readmissions
Manage post-acute spending & quality
Reduce network leakage
Conclusions
ACO results improve with experience.
Implementing change in our complex medical system is difficult regardless of the payment model.
To be successful over the long haul, ACOs need a different approach to managing medical services, invest in new processes of care, have effective reporting and analytic systems, improve staff competencies and change the culture of care delivery.