Challenges, Successes of First-Year Shared Savings ACOs

September 23, 2016 - Participants in the Medicare Shared Savings Program (MSSP) already familiar with physician practice transformation were more likely to earn shared savings payments, which should lead the Centers for Medicare & Medicaid Services to focus on first-time accountable care organizations.

That's the suggestion from the authors of a recent report in the American Journal of Managed Care — former National Coordinator Farzad Mostashari, MD, ScM, and former CMS Regional Manager Travis Broome, MPH. Mostashari is the founder of Adelade, a company created to assist independent primary care physicians with setting up and operating physician-led ACOs, and the latter has been with the company since 2014.

The two provided a detailed look at the experience of first-time MSSP ACOs in 2015, concluding that the program positively impacts patients and taxpayers regardless of shared savings payments.

“We strongly believe that the benefits of the program to patients and the taxpayer are not limited to those ACOs that received shared savings distributions,” the report stated. “However, lack of recognition of these contributions may stifle continued innovation and physician engagement with alternative payment models.”

According to recent CMS data, the two Aledade MSSP participants, Aledade Primary Care ACO and Delaware ACO, were in the 98th and 88th percentile for quality scores in 2015, respectively, but one failed to reduce healthcare costs while the other increased spending by 2.5 percent.

Mostashari and Broome pinpointed the challenges and successes that first-time MSSP ACOs, especially those that are physician-led, experienced in 2015.

First-year MSSP ACOs challenges affect cost-cutting strategies

In the first year, ACOs experienced five major challenges involving specialty costs, ACO benchmarks, hospital coding, risk adjustment, and data sharing.

First, the authors noted that physician-led ACOs should be aware of “specialist practices that have been bought and reclassified as hospital outpatient settings with facility fees that can double the cost to Medicare (and patients) of procedures and visits to specialists.” The trend led to a 2.7 percent and 1.1 percent increase in total healthcare costs for the Aledade Primary Care ACO and Delaware ACO respectively in 2015. The rise in hospital outpatient costs offset gains made elsewhere in the ACO.

Second, the MSSP benchmarking methodology for healthcare costs made it more difficult for first-year ACOs in high-spending areas to realize shared savings. Since the program only adjusts for national, and not regional, trends, the methodology “provides an inaccurate assessment of true savings.”

Consequently, the program’s benchmarks are lower than the average Medicare expenditures for certain regions. For example, the Delaware ACO, which resided in a higher-than-average Medicare spending area, had to overcome a 4.5 percent swing because of the difference between a regionally and nationally adjusted benchmark.

“This misalignment of regional versus national benchmarks eventually goes away as an ACO transitions to the more accurate regional benchmarking in its second and third contract periods (years 4-9), but it lengthens the time horizon for some ACOs to see financial success,” observed Mostashari and Broome.

Third, the program did not account for local hospital coding practice trends that can skew healthcare costs. Since Medicare does not perform hospital coding utilization management like in Medicare Advantage or commercial health plans, hospitals can use specialized software to adjust codes toward diagnostic-related groups with higher reimbursement rates.

Without strategies to fix coding inconsistences, the Delaware ACO increased healthcare costs by two percent because of coding issues, such as pneumonia being coded as sepsis with no bloodstream organism identified. If coding had been more consistent, the Delaware ACO would have decreased costs by 3.7 percent.

Fourth, the authors contended that MSSP risk adjustments favor ACOs with lower proportions of newly enrolled patients. Aledade MSSP ACOs tried to treat more patients under the ACO model, but the strategy removed 1.4 percent of savings ($1.5 million) after the weighted risk score was calculated.

“The current CMS public use file does not permit examination of the impact of risk adjustment on projected benchmarks, but this policy is likely to cause a systematic bias toward lower benchmarks in the MSSP,” Mostashari and Broome acknowledged. “Newly enrolled and newly attributed patients are likely to have low risk scores (which are counted), but any trends toward higher risk in the continuously enrolled population (that would, naturally, tend to get sicker and more expensive over time) are not counted.”

Fifth, MSSP ACOs oftentimes cannot gain access to helpful healthcare information (e.g., EHR data), Medicare claims information, and hospital admission-discharge transfer event notifications, that can be used to identify high-risk patients and develop more effective care transitions. Some organizations struggled to acquire the data because EHR vendors were unable or unwilling to standardize information and some hospitals refused to share data with local health information exchanges.

 MSSP ACO successes led to quality improvements and increased primary care access

Aledade MSSP ACOs experienced four successes through the Medicare program, including better patient engagement, preventative services, unnecessary emergency department visit rates, and care transitions.

First, Aledade MSSP ACOs worked under the hypothesis that more access to intensive primary care would decrease expensive specialty care visits and hospitalizations. By increasing care availability and connecting with patients that had not received a recent wellness visit, the two ACOs increased primary care utilization by two percent and five percent respectively.

As a result, the organizations boosted the number of patients attributed to the MSSP ACO and they minimized patient turnover. Aledade Primary Care ACO and Delaware ACO experienced a five and 15 percent respective increase in patients aligned with the ACO in 2015 (versus a two percent average for all MSSP ACOs) and saw 87 percent and 88 percent retention rates respectively.

Second, the organizations set out to improve preventative services in 2015. Aledade MSSP ACOs focused on promoting consistent preventative services through EHRs and improving cardiovascular health. The organizations improved on several cardiovascular health areas, such as achieving an 87 percent rate of aspirin use among patients with ischemic vascular disease and a 90 percent rate of screening and follow-up for elevated blood pressure.

Third, the two MSSP organizations also worked to increase same-day scheduling for urgent visits, improve after-hours telephone triage, and teach patients about appropriate emergency department use. In 2015, Aledade Primary Care ACO and Delaware ACO decreased emergency department visits that led to hospitalizations by five and four percent respectively, whereas the hospitalizations increased by one percent in other MSSP ACOs.

Fourth, Mostashari and Broome touted that Aledade MSSP ACOs enhanced care transitions by using real-time hospital discharge notifications through health information exchanges, direct hospital Health Level Seven International (HL7) feeds, and optical character and natural language processing of fax notifications. The MSSP ACOs also established a cloud-based workflow tool and trained providers to follow-up with patients within 48 hours of a discharge.

The care transitions strategies helped Aledade Primary Care ACO and Delaware ACO reduce 30-day all-cause admissions by 13 percent and 15 percent respectively compared to national benchmarks. The interventions also led to a nine percent and two percent decrease in acute hospitalization utilization rates compared to the benchmarks set for the ACOs.

“So far, our physician-led ACOs have successfully increased primary care utilization (and revenue), and decreased ED and hospital utilization and readmissions,” added the report. “However, we failed to earn a return on our investment of practice time and Aledade resources in the first year of the MSSP program.”

Dig Deeper:

• Understanding the Value-Based Reimbursement Model Landscape

• What Are the Benefits of Accountable Care Organizations?