Factors associated with hospital participation in Centers for Medicare and Medicaid Services' Accountable Care Organization programs.

The Potential of Medicare Accountable Care Organizations to Transform the American Health Care Marketplace: Rhetoric and Reality

ACO payment models and the path to accountability.

The Centers for Medicare and Medicaid Services (CMS) recently announced a Notice of Proposed Rulemaking (NPRM) for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs). The rulemaking contains several proposals that if enacted, would fundamentally change the underlying incentives for providers to participate in the program. These proposed reforms address issues such as data sharing, renewals of participation agreements, beneficiary attribution, incentives to move to two-sided risk, and lastly, reforms to the benchmark calculations against which ACOs compete to earn savings. The NPRM comes on the heels of a September 16, 2014 release of performance results for MSSP ACOs that began their performance years by 2013. Under the current program rules, ACOs that successfully reported quality performance data and whose savings exceeded their “minimum savings rate” were eligible to share in savings with Medicare. The MSSP program allows ACOs to choose either one-sided risk (Track 1, only upside potential to earn savings) or two-sided risk (Track 2, both upside and downside potential to earn savings/incur losses) with the final sharing amount based on achieving quality targets (up to 50 percent for Track 1 and 60 percent for Track 2). A vast majority of ACOs enrolled in Track 1, the one-sided risk option. Of the 220 ACOs in the program that participated in the first performance year, 53 earned shared savings, 52 saved money but not enough to meet the required “minimum savings rates,” and the other 115 did not accrue savings (spending on patients assigned to the ACO was greater than projected). In February 2014, the CMS asked stakeholders for input as to how to improve its ACO programs, feedback which they used to generate the NPRM. Many ACOs and other stakeholders argued that failures to achieve savings over and above minimum savings rates were a partial result of residing in low spending areas. In this post, we examine the merits of this contention and consider the policy implications of our results and their bearing on some of the modifications of the MSSP program that CMS has proposed. We also discuss other strategies for improving the program CMS did not mention in the NPRM.

Gastroenterology in a New Era of Accountability: Part 3. Accountable Care Organizations

In their article, Nyweide and colleagues1 present results from the first 2 years of the Pioneer accountable care organization (ACO) program. Like the Medicare Shared Savings ACO Program (MSSP), the Pioneer program rewards health care organizations that accept accountability for a population of beneficiaries and score well on measures of cost, quality, and patient experience.2 The Pioneer program gives ACOs the opportunity to gain a greater share of any cost savings they produce but also gives them more risk if costs for their population exceed targets. ACOs are one of the centerpieces of the Affordable Care Act, and understanding how they have performed is critical in the United States. Using a difference-in-differences approach, Nyweide et al compared the cost of care for Medicare beneficiaries for whom the 32 Pioneer ACOs were responsible with cost for other beneficiaries in their areas. The increase in cost per beneficiary was $36 per beneficiary per month less for Pioneer beneficiaries in 2012 and $11 less in 2013. Smaller increases in the cost of hospital inpatient care accounted for the largest share of the difference (nearly 50%), whereas physician services accounted for nearly 25%. Pioneer beneficiaries also had smaller increases in outpatient procedures, imaging, tests, and emergency department visits, although the differences between Pioneer beneficiaries and and those in the comparison group were small. Despite these decreases in utilization, Pioneer beneficiaries’ reported experience of care, including timeliness and ease of obtaining care, access to specialists, and clinician communication, was at least as high as for beneficiaries in the fee-for-service Medicare and Medicare Advantage programs. Nyweide et al provided fewdata relevant to the quality of care. They did show that the proportion of beneficiaries who saw a physicianwithin 7 days of hospital discharge increased significantly more for Pioneer than non-Pioneer beneficiaries. However, therewas no significant difference in readmission rates, which declined for both groups. Limited information available todate fromother studies suggests that Pioneer ACOsare improvingtheirperformanceonqualitymeasuresand perform at least as well as comparison groups.2-4 The relatively smaller increases in costs foundbyNyweide et al are compatible with, but larger than, an earlier Centers for Medicare &Medicaid Services (CMS) estimate2,4 and a recent estimate for the first year of the Pioneer program.3 The differences result frommultiple subtledifferences in themethodologies used in these studies, but Nyweide et al had access to the most accurate data (eg, the physicians and beneficiaries actually included in the Pioneer ACOs, rather than estimates of these physicians and patients) and conducted multiple sensitivityanalyses,whichsupported their estimates, and suggest these are the best data to date regarding cost savings associated with the Pioneer ACO program. Nyweide et al estimated that Pioneer ACOs achieved savings for CMSof $280million in their first year. This represents a savings of approximately 4%. This amountmay seemsmall, but if this rate of savings could be sustained, and achieved throughout a large part of the US health care system, it would be more than enough to “bend the cost curve” so that health care expenditures do not continue to increase as a percentage of the gross domestic product and the federal budget.5 Can this rate of savings be sustained? The Pioneer ACOs produced savings in year 2 that were one-third of year 1 savings. It is possible that during the first year these ACOs were able to“grasp the low-hanging fruit”—toaddress relativelyeasy ways to control costs—and that the savings they generatewill be much smaller, at best, in subsequent years. Alternatively, itmay be that it will take time for ACOs to develop better processes to improve the care of their patients and that they will be able continue to lower costs for years to come.6 Savings generated by ACOs will have little effect on US health care unless a large number of ACOs can do so. The 32 Pioneer ACOs were selected because they are sophisticated organizations thought to be capable of succeeding. But many organizations that have developed reputations for successful “population health management”—organizations like Kaiser and Geisinger—elected not to participate. Of the 32 original Pioneer ACOs, 13 have left the program. There are more than 400 ACOs in the MSSP program, but very few selected the higher potential reward/higher risk track available in MSSP.7 In theory, ACOs should be attractive to physicians. They provide an opportunity to proactively improve care for patients. They are an alternative to other methods of controlling costs, such as cuts in payment rates and extensive use of priorauthorization.8But forACOstobebroadlysuccessful, they will needstronger incentives, closerongoingconnectionswith patients, better logistical support fromMedicare, and regulatory relief. For ACOprograms to growandbe sustainable, physicians andhospitalsmust believe that theywill be at least aswell off financially if they become a high-functioning ACO as they wouldbe if they continuedwithbusiness asusual. Thismeans that theremust be substantial rewards for ACOs that perform Related article page 2152 Opinion

Determine the relationship between quality of an accountable care organization (ACO) and its long-term reduction in healthcare costs. We conducted a cost minimization analysis. Using Centers for Medicare and Medicaid cost and quality data, we calculated weighted composite quality scores for each ACO and organization-level cost savings. We used Markov modeling to compute the probability that an ACO transitioned between different quality levels in successive years. Considering a health-systems perspective with costs discounted at 3 percent, we conducted 10,000 Monte Carlo simulations to project long-term cost savings by quality level over a 10-year period. We compared the change in per-member expenditures of Pioneer (early-adopters) ACOs versus Medicare Shared Savings Program (MSSP) ACOs to assess the impact of coordination of care, the main mechanism for cost savings. Overall, Pioneer ACOs saved USD 641.24 per beneficiary and MSSP ACOs saved USD 535.59 per beneficiary. By quality level: (a) high quality organizations saved the most money (Pioneer: USD 459; MSSP: USD 816); (b) medium quality saved some money (Pioneer: USD 222; MSSP: USD 105); and (c) low quality suffered financial losses (Pioneer: USD -40; MSSP: USD -386). Within the existing fee-for-service healthcare model, ACOs are a mechanism for decreasing costs by improving quality of care. Higher quality organizations incorporate greater levels of coordination of care, which is associated with greater cost savings. Pioneer ACOs have the highest level of integration of services; hence, they save the most money.

The Medicare Shared Savings Program (MSSP), Medicare’s main program for accountable care organizations (ACOs), has grown rapidly since it began in 2012. It added 89 new provider organizations earlier this year, bringing the total to over 400 Medicare ACOs across the country. About one in six beneficiaries in the traditional Medicare program now receive care from physicians, hospitals, and other providers participating in Medicare ACOs. The program continues to receive a high level of public and policymaker attention because of expectations that it may enable these health care providers to get more support for delivering higher quality care at a lower overall cost. The Department of Health and Human Services recently affirmed ACOs will be a core part of its efforts to transition to value-based payments in the years ahead. In the initial years of the MSSP, however, the potential still mostly remains to be realized. As we noted in a recent post, early results show that the Medicare ACOs have achieved high quality in many areas, while only a quarter of the MSSP ACOs have been able to reduce spending enough to share in savings generated from their efforts so far. The Pioneer ACO Program has also experienced mixed results to-date, and as we describe below, may transition to a “next generation” ACO model. Given the high expectations and the many startup issues around Medicare ACOs, it is no surprise that the recent proposed rule for reforming the MSSP received a lot of attention. The proposal from the Centers for Medicare and Medicaid Services (CMS) described a broad range of changes in the ACO program (Exhibit 1), in what could amount to “Version 2.0” of Medicare ACOs. Along with about 300 other organizations, we submitted comments on the proposed rule. In this post, we review the major areas of proposed changes along with our views and some notable comments submitted by other groups. (We have also summarized many of these issues in a detailed chart.)

Medicare was an early innovator of accountable care organizations (ACOs), establishing the Medicare Shared Savings Program (MSSP) and Pioneer programs in 2012-2013. Existing research has documented that ACOs bring together an array of health providers with hospitals serving as important participants. Hospitals vary markedly in their service structure and organizational capabilities, and thus, one would expect hospital ACO participants to vary in these regards. Our research identifies hospital subgroups that share certain capabilities and competencies. Such research, in conjunction with existing ACO research, provides deeper understanding of the structure and operation of these organizations. Given that Medicare was an initiator of the ACO concept, our findings provide a baseline to track the evolution of ACO hospitals over time. Hierarchical clustering methods are used in separate analyses of MSSP and Pioneer ACO hospitals. Hospitals participating in ACOs with 2012-2013 start dates are identified through multiple sources. Study data come from the Centers for Medicare and Medicaid Services, American Hospital Association, and Health Information and Management Systems Society. Five-cluster solutions were developed separately for the MSSP and Pioneer hospital samples. Both the MSSP and Pioneer taxonomies had several clusters with high levels of health information technology capabilities. Also distinct clusters with strong physician linkages were present. We examined Pioneer ACO hospitals that subsequently left the program and found that they commonly had low levels of ambulatory care services or health information technology. Distinct subgroups of hospitals exist in both the MSSP and Pioneer programs, suggesting that individual hospitals serve different roles within an ACO. Health information technology and physician linkages appear to be particularly important features in ACO hospitals. ACOs need to consider not only geographic and service mix when selecting hospital participants but also their vertical integration features and management competencies.

Accountable Care Organization Pathways: Diverse but Ultimately Parallel

On December 23, 2014, the Centers for Medicare and Medicaid Services announced 123 new Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs). This represents the fourth round of MSSP participants, which, coupled with the Pioneer ACOs, brings the number of Medicare ACOs to 366. Some of these organizations were already known to be ACOs, including those that transferred from the Pioneer ACO program, but many were new to accountable care, bringing the total number of public and private ACOs to 606. With continued government support of ACOs and considerable growth in the number of organizations becoming ACOs, the prospect of ACOs becoming a dominant model in care delivery seems very real. In this post I will evaluate how the accountable care movement has grown and suggest what industry observers should look for in 2014. Overview of Accountable Care Organizations An accountable care organization, at its most basic level, is a group of health care providers that accept responsibility to care for the health needs of a defined population while meeting predetermined quality benchmarks. The specific goals of ACOs are to improve quality outcomes, improve the experience of care, and lower costs. Without conveying all the details of what that definition includes, it is important to recognize that the definition is relatively broad; it includes multiple types of organizations operating under many different payment arrangements. While the MSSP is the most publicized incarnation of ACOs, many other public and private models exist, with many different approaches to achieving the common goals.

Cardiovascular disease is the leading cause of death in the United States and accounts for ≈17% of national health expenditures and 30% of Medicare spending.1 Among physician groups and professional societies, cardiologists have been among those leading efforts to create evidence-based guidelines and to measure quality of care. In the post-health reform era, national efforts have expanded beyond quality to include innovative delivery models, such as the patient-centered medical home (PCMH), the medical neighborhood, and accountable care organizations (ACOs). This next generation of care models and the payment strategies that support them incentivize efficiency, patient-centeredness, and care coordination with an emphasis on primary care. We propose strategies for cardiologists to create collaborative opportunities within these new models drawing from examples from around the country within the context of a framework developed by the American College of Physicians.2 Pursuing these approaches or others along similar lines will enable cardiologists to lead and to be active participants in shaping delivery system transformation. These innovative delivery models share similar features. The PCMH is a model of care that emphasizes additional support for primary care providers within a patient-centered team, whereas a medical neighborhood represents a broader collection of primary care doctors, specialists such as cardiologists, hospitals, and other stakeholders within a region that seek to reduce fragmented care by sharing accountability.2,3 The ACO, too, is a broader care delivery arrangement, but in this case, groups of providers are accountable for the quality, cost, and overall care of a particular population, typically defined by the payer. In the Medicare Shared Savings Program (MSSP), an ACO model for Medicare beneficiaries, the ACO can capture shared savings if it reduces its healthcare expenditures and meets certain quality performance standards, nearly half of which are related to cardiovascular disease.4 Within the …

In 2012, 27 organizations will initiate participation in the Medicare Shared Savings Program as Accountable Care Organizations. This level of participation reflects the response of Centers for Medicare and Medicaid Services to criticism that the program as outlined in the proposed rule was overly burdensome, prescriptive, and too risky. Centers for Medicare and Medicaid Service made significant changes in the final rule, making the Accountable Care Organization program more attractive to these participants. However, none of these changes addressed the serious concerns raised by subspecialty societies-including the American Society of Nephrology-regarding care of patients with multiple chronic comorbidities and complex and end stage conditions. Virtually all of these concerns remain unaddressed, and consequently, Accountable Care Organizations will require guidance and partnership from the nephrology community to ensure that these patients are identified and receive the individualized care that they require. Although the final rule fell short of addressing the needs of patients with kidney disease, the Centers for Medicare and Medicaid Innovation presents an opportunity to test the potentially beneficial concepts of the Accountable Care Organization program within this patient population. The American Society of Nephrology Accountable Care Organization Task Force developed a set of principles that must be reflected in a possible pilot program or demonstration project of an integrated nephrology care delivery model. These principles include preserving a leadership role for nephrologists, encompassing care for patients with later-stage CKD and kidney transplants as well as ESRD, enabling the participation of a diversity of dialysis provider sizes and types, facilitating research, and establishing monitoring systems to identify and address preferential patient selection or changes in outcomes.

PD32-02 UNDERSTANDING PRE-ENROLLMENT FIRST YEAR COSTS OF UROLOGICAL CANCER CARE FOR HOSPITALS THAT WENT ON TO PARTICIPATE IN MEDICARE ACCOUNTABLE CARE ORGANIZATIONS

The Centers for Medicare & Medicaid Services (CMS) has facilitated the development of Medicare accountable care organizations (ACOs), mostly through the Medicare Shared Savings Program (MSSP). To inform the operation of the Center for Medicare & Medicaid Innovation's (CMMI) ACO programs, we assess the financial performance of rural ACOs based on different levels of rural presence. We used the 2014 performance data for Medicare ACOs to examine the financial performance of rural ACOs with different levels of rural presence: exclusively rural, mostly rural, and mixed rural/metropolitan. Of the ACOs reporting performance data, we identified 97 ACOs with a measurable rural presence. We found that successful rural ACO financial performance is associated with the ACO's organizational type (eg, physician-based) and that 8 of the 11 rural ACOs participating in the Advanced Payment Program (APP) garnered savings for Medicare. Unlike previous work, we did not find an association between ACO size or experience and rural ACO financial performance. Our findings suggest that rural ACO financial success is likely associated with factors unique to rural environments. Given the emphasis CMS has placed on rural ACO development, further research to identify these factors is warranted.

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