Investing in ACO Capabilities

Christopher Cheney, May 9, 2017

Healthcare providers find that up-front investments are necessary to achieve success in accountable care contracting.

This article first appeared in the May 2017 issue of HealthLeaders magazine.

For organizations that have not participated in programs like the Medicare Shared Savings Program, the longer they wait and do not build up experience, the harder it gets to be successful in the more advanced risk-based programs,” says Elizabeth Johnson, MD, MS, president and CEO of MaineHealth Accountable Care Organization.

Laura Kaiser
Emily Brower

The Portland, Maine–based ACO joined the MSSP upside-risk-only Track 1 in July 2012. MaineHealth ACO was among the Top 10 shared-savings earners in calendar year 2013 —the first performance year of MSSP— serving 48,273 Medicare beneficiaries and receiving shared-savings payments totaling $9.4 million. The ACO features several hospitals including Maine Medical Center in Portland, rural health clinics, federally qualified health centers, and primary care and specialty care physician practices.

Newton, Massachusetts–based nonprofit Atrius Health has achieved shared-savings success in Medicare’s two-sided risk-model Pioneer ACO because the organization invested in ACO-related capabilities over many years. This limited the size of up-front investments, says Emily Brower, MBA, vice president of population health at Atrius Health, which has 30 medical practice sites, more than 50 specialties, and 875 physicians.

“A majority of our revenue is in full-risk, global-budget, outcomes-based contracts. So we had an existing structure on the commercial side to take in claims data and activate care management resources for our patients. We were also doing full risk in our Medicare Advantage partnership, so we had a lot of foundation that we could build on. We did add some capacity in our data warehouse and data analytics team, just because operating an ACO is like adding another big payer,” says Brower.

In Pioneer ACO’s 2015 performance year, Atrius earned $4.4 million in shared savings. In the 2014 performance year, Atrius earned $2.8 million in shared savings.

Unlike MaineHealth ACO, which Johnson describes as “an ACO that has everybody under the tent,” Atrius’ strategy for participating in the Pioneer ACO is focused on physician practices. Last year, more than 1,000 physicians in the Greater Boston area participated in Atrius’ Pioneer ACO.

Essential up-front investments

There are several essential administrative and clinical capabilities required to operate a successful Medicare ACO model, says Cassidy Tsay, MD, MBA, vice president of business development at Sacramento, California–based CAPG, a nonprofit association that represents physicians practicing capitated, coordinated care.

Over the past five years, the Centers for Medicare & Medicaid Services has launched a handful of ACO models. MSSP is the most popular model, with 433 healthcare provider organizations participating in the program last year.

“On the administrative side, someone has to take on the role of submitting information to CMS. You have to have some kind of data-collecting infrastructure, either through an existing EMR system or through a separate system,” she says.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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