2012 marked the launch of the health care reform law’s Medicare Shared Savings Program (MSSP), which offers health care providers financial incentives in the form of shared savings to work together at the local level to measurably improve Medicare patient outcomes and reduce delivery costs for specific patient populations through collaborative, or accountable care. The law and proposed regulations call for the establishment of Accountable Care Organizations (ACOs) to coordinate medical care for no less than 5,000 Medicare patients per provider organization, contract with providers (and possibly private payers), report on dozens of quality measures established by CMS, and show savings in order to reap financial gains from the program.
By the summer of 2012, there were 116 ACOs under the Medicare Shared Savings Program. But it’s really the private sector driving the coast-to-coast growth of coordinated care. There are now an estimated 150 commercial ACOs across the country, estimates the Brookings-Dartmouth ACO Network, whose members include the College. Unencumbered by regulatory constraints, these partnerships between private insurers and facilities are taking the lead in shaping how ACOs operate. This includes defining performance measures used by providers to demonstrate quality and cost savings.
The Pioneer Model
Of the 116 participating in the MSSP, there are currently 32 participating in the Pioneer Model. These entities are already providing coordinated care for patients, often in conjunction with private payers. In fact, this model is designed to work in coordination with private insurers to align provider incentives while improving health outcomes and achieving cost savings across the system. The payment model for Pioneer ACOs is flexible, allowing accommodation of specific organizational and market conditions. It also allows providers to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the MSSP.
Specifically, during the first two years of the Pioneer model features a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO. In year three of the program, those Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model. Population-based payment is a per-beneficiary per month payment amount intended to replace some or all of the ACO’s fee-for-service (FFS) payments with a prospective monthly payment.
Advanced Payment Initiative
When the CMS issued the proposed ACO rule in March 2011, many health care providers and stakeholders with limited financial resources were concerned about their ability to invest in the infrastructure and staff development necessary to participate in the MSSP.
In response, CMS introduced the Advanced Payment Model, which is focused on assisting smaller ACOs with less access to capital participate in the MSSP. Through this initiative, selected organizations will receive an advance on the shared savings they are expected to earn. Participating ACOs will receive three types of payments, according to CMS:
- An upfront, fixed payment: Each ACO will receive a fixed payment.
- An upfront, variable payment: Each ACO will receive a payment based on the number of its historically-assigned beneficiaries.
- A monthly payment of varying amount depending on the size of the ACO: Each ACO will receive a monthly payment based on the number of its historically-assigned beneficiaries.
Advance payments are structured in this manner to acknowledge that new ACOs will have both fixed and variable start-up costs.
CAP ACO/Coordinated Care Resource Center
The College has launched an online CAP ACO/Coordinated Care Resource Center to provide members access to the latest news and regulatory updates on coordinated care with a focus on how these developments impact pathology. The College also supports the CAP ACO Network. Launched in 2011, this Network is for CAP members currently participating—or who will participate—in collaborative or accountable care organizations in their communities. Join the CAP ACO Network today.
Interested in joining the CAP-ACO network? CAP members who work in a facility that is currently—or will be—part of an ACO are encouraged to join the network.
For more information—or if you have a question about ACOs—please email us.