Value-Based Care News

Do Accountable Care Organizations Save Claims Reimbursement?

Healthcare providers have one foot in fee-for-service and another in value-based reimbursement. The ACO demands examination as claims reimbursement declines.

By Jacqueline DiChiara

- Accountable care organizations (ACOs) are reportedly being penalized for high revenue cycle management performance. Healthcare providers looking to manage their claims reimbursement strategies remain focused on value-based care initiatives while shared savings payments dissipate. ACOs – far from being a one-size-fits-all concept – are apparently malleable. But when it comes to successfully hitting given revenue cycle targets, can they effectively keep up?

accountable care organizations claims reimbursement

“The argument from the ACO community is that if you start off doing a really good job, or you keep doing an extraordinarily good job year after year, you’re effectively being punished for that by the way the benchmarks are set up right now,” stated April Wortham-Collins, Senior Analyst at Decision Resources Group.

Wortham-Collins recently discussed this thought-provoking ACO concept, and many others, in a personal interview with RevCycleIntelligence.com. The following is the first of a two-part chat.

RevCycleIntelligence.com: Where will the ACO conversation lead in 2016?

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  • April Wortham-Collins: The conversation will lead to the idea of benchmarking and how the baseline for ACO Shared Savings is set, whether it's prospective or retrospective assignment of ACO beneficiary. And how to get past this unintended consequence with the Pioneer, and the early Medicare Shared Savings Program.

    The best ACOs were penalized for doing good work. As they improved their performance in year two, in year three of their contracts, their shared savings payments were getting smaller.

    CMS recognizes there's an issue there, and they're working to correct that. It's a very complicated and complex thing to sort out. It can be market-dependent, it can be ACO-dependent, on how you set those benchmarks.

    RevCycleIntelligence.com: How is declining reimbursement affecting the ACO landscape? How are rural hospitals pulling through?

    April Wortham-Collins of Decision Resources GroupAWC: We've got one foot in fee-for-service and one in value-based reimbursement, whether it be ACOs, bundled payments, or patient-centered medical homes with pay-for-performance components.

    That's kind of a painful place to be if you're a provider because you’re following all these quality metrics for different populations. With declining reimbursement, as a provider, if you want to continue to serve this population, you have to examine ACOs as a path.

    If you're a provider in Florida with a huge Medicare population, you may be more apt to investigate or invest in the ACO model than if you were in, say, Colorado. Of course, Colorado has been very progressive when it comes to accountable care.

    But just based on patient demographics, there's also this difference between serving a population that is primarily urban/suburban, versus a rural population. It's very difficult to track, manage, and coordinate care if you're assigned patients in North Dakota compared to Boston.

    RevCycleIntelligence.com: What one message about the accountable care future do you have as a key takeaway for healthcare providers, executives, and the like?

    AWC: My one message is with what we're seeing in terms of growth trends and the general future of ACOs combined with CMS announcements on MSSP ACOs and the Next Generation is recognition there's not a one-size-fits-all model for accountable care.

    We are going to have to learn, make some mistakes, experiment, and innovate to the point where we can figure out what works best for which populations in which markets.

    RevCycleIntelligence.com: Is there anything that particularly caught your eye regarding the recent CMS announcement of 121 new Medicare ACO participants?

    AWC: It’s noteworthy that with the initial cohort of 21 Next-Generation ACOs, most of them are existing ACOs that were in a Shared Savings arrangement and that by going into the Next Generation Model, they're moving into risk. That's really encouraging.

    It appears there are only two or three brand new ACOs in this group and that most are veterans that have either tried the Pioneer Program but it didn't work, or they were in the Medicare Shared Savings Program and are now moving into risk. This is exactly what CMS wanted to accomplish.

    We're going to see a lot of conversation about that going forward and it could be a big determinant on where ACOs go from here and whether or not they are successful.